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Jonathan Mullins
Kenneth Hudson
Passionate Telfair
Café De’ Sprocket Market Plan
At Café de Sprocket, we promise to provide outstanding customer service to our entire
community to ensure a welcoming and friendly environment, while offering quality products that
promote health and stability, at an economically friendly price. We also promise to offer durable
and ergonomically designed bikes as well as creating a comradery by being actively present in
the cycling community.
Marketing Objectives
Our marketing objectives are subject to a semi-annual schedule. At Café de Sprocket, we
strive for a customer service satisfaction level between 70% - 85% because in business you have
to be realistic and understand that all customers will not receive the same service anticipated. We
plan to measure these satisfaction levels by giving our customers the opportunity to fill out a
service survey that will give the business a sense of what customers perceive of their experience
in our establishment. We will also maintain and monitor social media reviews; we will use the
information from the internet to gauge how customers really feel about our business. This
information will give us insight on the target market and their interests so we can change any
processes that are ineffective to the consumer. Social Media can also help the business measure
the level of product awareness in the community. We hope to see a 25% increase in product
awareness; we want the community to be aware of the products and services we have to offer to
benefit them. We plan to measure this objective by the amount of reviews online and traffic in-
store. We assume that the amount of customers that come into our establishment will give us a
sense of awareness. Business awareness and customer service will interconnect because the
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
customers that participate in the service will base their reviews on the service received and
outstanding customer service will lead to positive reviews and more in-store traffic. On the basis
of our bicycle business, we strive to sale 120 bicycles per 6 months; measuring this objective
will be primarily from inventory and our income statement. In the entirety of Café de Sprocket,
we have set two objectives: experience a 5% increase semiannually in profitability and establish
70% of all customers to the Café Reward program.
Current Bicycle Industry Trends
All trends occurring at this time can only help the bike café concept instead of causing
the business to fail like most bicycle startups. One current trend in the bicycling industry
according to Tanya Mohn, an msnbc.com contributor, is the bike café concept. She states, “The
cafés are part of the emerging bicycle culture sweeping many U.S. cities, which has spawned
growing numbers of bike paths and lanes, public-private bike-sharing programs and better laws,
according to the League of American Bicyclists”. This continuing trend will be the biggest
benefit for the company since the concept is a bike café but extending to serving gourmet
sandwiches and other hot meals instead of only coffee. Another trend in the bicycling industry is
the new bike designs that cyclists desire to have. There are new bicycle designs being released at
a continuous pace and it can help boost the bicycle industry by attracting a more diverse market
than just cyclists.
When looking at how the Bike Café industry operates, it’s best that we break it down and
analyze both, bike shops and coffee houses separately.
How the Coffee Industry Operate
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
Researching the coffee industry, coffee shops have grown immensely popular over the
past several years. With the entrance of coffee houses such as Starbucks, the most recognizable
brand, the gourmet coffee craze has taken flight. The industry has soared over the past decade.
According to the National Coffee Association’s most recent annual report, coffee drinkers in the
U.S are gradually getting away from “non-gourmet” coffee and preferring more specialty and
espresso-based coffees (Brown). Statistics from 2014 shows an increase of people who prefer to
drink gourmet brews over a regular brew of coffee, from 13% to 18%.
How the Bicycle Industry Operate
The bicycle industry is a bit rocky according to statistics. Even though the major U.S
manufacturers like Trek and Redline are still very popular, most of the bikes sold in the states are
imported from China. In 2013, the sales dollar in the United States dropped nearly 300 million
dollars. This figure is a decline from the previous year of 5.8 billion dollars (“Statistics and
Facts about the U.S. Bicycle Industry”). Now, this number does include the sale of children’s
bike as well. The adult market for bicycles is owned by women, ages 17 to 28. This group owns
60% of the market for adult riders (Szczepanski). Even though the cycling industry is on a bit of
a decline, it appears that it is still a great industry to be a part of due to a diverse target market.
S.W.O.T. Analysis: Coffee Industry
The strengths and weaknesses of the coffee industry is a rather hard thing to navigate.
With the popularity of coffee and premium espresso-based drinks, there isn’t much of a
weakness to elaborate on. The only weakness could be the competitive market. With names like
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
Starbucks and Dunkin’ Donuts ruling the market, getting a hand in their pockets is going to be a
challenge. This does hinder the opportunities that could be open for someone trying to make
their way in the market. However, with the rise in the number of coffee and espresso drinkers
today, there is definitely plenty of wealth to be shared. The opportunity to edge your way into
this market certainly lies in the numbers of people drinking coffee today. But, the threat side of
this is our economy at this point and time. Many of the gourmet brands can be purchased at your
local grocery store, so with less disposable income, consumers are likely to buy their coffee or
espresso and brew it at home, rather than a coffee house.
S.W.O.T. Analysis: Bicycle Industry
The strengths and weaknesses of the cycling industry have a few different areas to cover.
The strengths of the industry seem to fall into children, but this is also a weakness for the type
company we are pursuing. Our prime customer is going to be adults that are part of a group or
community. As the numbers of bike sales, in adults, continues to fall each year, the decrease is
not enough to eliminate the concept of a bike café. Even though the adult numbers as a whole
have declined, the numbers for women seem to be climbing. So, with the idea of a coffee shop as
well, this could be strength for the target demographic we want to touch.
Bike Café Competitive Advantage
There is an abundance of data available that shows just how popular the coffee market is
in the United States today. Just in the United States, 54% of the population over the age of 18
drinks coffee every day ("Coffee by the Numbers."). 54% alone is impressive enough, but to add
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
to the top of it, those drinkers are drinking over three cups, at nine ounces each, per day ("Coffee
Drinking Statistics."). The average cup of coffee in the United States is $1.38, while the average
cup of espresso-based drink is $2.45. The significance of these prices is that, of the United
States population, 100 million people drink coffee, and 30 million drink a premium style
espresso. So when trying to decide if a coffee shop alone would be successful, data shows that
the probability of success is definitely high. A further look into how competitive the coffee
market is, we would need to look at who is buying coffee at what price. Do people prefer that
premium cup of espresso, or would they spend money on traditional coffee at a relatively
inexpensive fast-food store? Statistics show that only 29% of the people that drink coffee or
espresso go to the cheap outlet for their cup of brew ("Coffee Drinking Statistics."). Another
interesting fact to illustrate a competitive advantage of the coffee shop is health benefits. There
has been plenty of research done to show that there are numerous health benefits to drinking
coffee every day. According to a study, people who drank more than one cup over a four-year
period had a 11% lower risk for type 2 diabetes (Dwyer).
The competitive advantage in the cycling industry for this shop will fall in the addition of the
coffee shop. In this market, the bikes shops cater to the “tri-athlete” by selling other retail items
such as shoes and running gear. The advantage of our concept for this shop is going to be based
around a gathering spot for local riders, as well as touring riders. The plan to rent cycles, and
book tours will be far beyond anything that other cycle shops in the market are doing or even
planning at this point. The bike/coffee shop should be able to own a market of riders who come
to town wanting to tour the city. It should also have the market of riders that need or want a
place to stop and “hangout” as a group or member.
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
Coffee Drinking Statistics
Total percentage of Americans over the age of 18 that drink coffee
everyday
54%
Total percentage of coffee consumption that takes place during
breakfast hours
65%
Total amount of money spent by importing coffee to U.S. each
year
$4 billion
Total average of money spent on coffee each year by coffee
drinker
$164.71
Total number of U.S. daily coffee drinkers 100 million
Total number of U.S. daily coffee drinkers who drink specialty
beverages (lattes, cappuccinos, mochas, etc.)
30 million
Percent of coffee drinkers who go to premium places (Starbucks,
Coffee Bean) when they get coffee
34%
Percent of people who go to lower-price outlets (McDonalds,
Dunkin Donuts, etc.) when they get coffee
29%
Total percentage of coffee consumed between meals 30%
Total percentage of coffee drinkers who add cream and/or sugar 65%
Total amount of U.S. coffee drinkers who claimto need a cup of
coffee to start their day
60%
Total percentage of coffee drinkers who say coffee makes them
feel more like their self
54%
Total percentage of coffee drinkers who have a cup within the first
hour of waking up
68%
Total amount of yearly money spent on specialty coffee in the U.S. 18 billion
Table 1: Statistics on Coffee Drinkers
Social Forces
The social factors of the coffee industry are definitely a positive. Many coffee drinkers
like to meet up and socialize while enjoying a cup of brew at their favorite brew house. The
issue that a new coffee house usually has is pulling these people away from their favorite place;
however, this new concept is going to have an advantage not offered by the “normal” place they
go. So, how do we reach these people? What are we going to offer them in order to be top-of-
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
mind to them? The advantage our coffee shop will have is the fact that the bicycling community
is a close knit group of people and increasing by the years. Once we get in their eye, others will
likely follow. There are plenty of cyclists in our area, and they are probably looking for
aspirational groups to be a part of. Due to comradery that is amongst this social group, riders
tend to be more inviting to other riders. This will be an advantage of the bike café.
Demographics
In the bicycle and café industry, there are different target markets but at a certain point
they tend to overlap. In the café industry, according to statistics, 83% of adults aged 25-39 report
drinking coffee every day ("83% of U.S. Adults Drink Coffee"). Coffee consumption is expected
to increase 2.7% each year ("Coffee Shop 2012."). Daily gourmet coffee consumption was
highest among 25-29 year olds at 42%. The second highest was the 40-59 age bracket. It was
also the highest in consumption with Hispanic-Americans at 48% and second was Asian-
Americans at 42% and third was Caucasian-Americans at 32% (http://www.vendingtimes.com).
The 25-35 year old age bracket is the least likely to stock coffee at home which opens a market
because that means they will be going to either a fast food place, gas station or to a specialty
coffee shop to pick up their coffee every morning (http://www.experian.com/assets/simmons-
research...). Also, men and women each consume 1.6 cups per day which implies that when
customers participate in our café service they will be inclined to purchase the gourmet coffee and
sandwiches offered. Women indicated that coffee was a good way for them to relax, while men
indicated it helped them to get things done. The most coffee is sold during breakfast hours at
65% of the market; therefore the time that a coffee shop will make most of its money is during
the morning (http://www.e-importz.com/coffee-statistics.ph).
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
The bicycle industry statistics show that the average bicycle commuter is 39 years old, a male,
who is a professional with household income of more than $45,000 per year and rides 10.6
months per year. Cycling participants are 58% male and 42% female. Although males are the
prime customers for bicycle shops, women cyclists are starting to increase over time. 29% of
cyclists are ages 16-24, 21% are ages 25-34, 23% are ages 35-44, and 27% are ages 45 and up.
Among those ages, 53% of cyclists are married and 47% are unmarried. The household income
of $40,000-$79,000 makes up 40% of the market (http://www.peopleforbikes.org/). The adult
age group makes up 72% of the total industry at 28.5 million riders. From looking at just these
statistics and comparing them to the coffee drinkers, it shows that for a bicycle/coffee shop the
target age in the market are males and females between the ages of 25 and 45
(http//:brandongaille.com/ 49-bicycle-industry-statistics-and-trends/).
Economic Forces
The U.S. Economy as a whole is not doing as well as expected right now even though the
drop in gas prices has put more money in consumers’ pockets. In January it was reported that
the producer price index declined .8%, it was the third straight decline and the largest drop since
November 2009.The consumer price index declined .4% and consumer goods fell .3%. The
Producer Price index decline can be seen as a relation to the 2.1% decrease in the final demand
goods index (http://www.bls.gov/news.release/ppi.nr0.htm). Manufacturing rose by .2% which
can be good for the bicycle industry seeing that that increase is going toward producing materials
and products in that industry. The gasoline index declined 9.4%; the lowest gas prices in 5 years
can be the cause of these drops. Consumers spent $6.7 billion less at the pump in January than
they did the past two months; it seems that the extra money didn’t get spent anywhere else. It
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
looks like more people are using the unused cash to replenish their savings and to pay down
debts already accrued (http://abcnews.go.com/Business/). In the long run saving is good for
households and the economy because it allows for future spending. With this slowdown in
spending right now it looks like a 2.5% slow growth is forecasted between January and March
(http://www.nytimes.com/).
Even though there are a lot of declines in the economy right now it can look better for
downtown Montgomery with the building of loft apartments in the downtown Montgomery area,
the rejuvenation of the market district including the increasing amount of workers that commute
there every day, and the Oak Park and Centennial Hill plan as well. This shows a substantial
potential for increased revenue for all retailers that are located in the downtown area. The new
residents will most likely be in the target market that a bicycle/coffee shop will attract. A bicycle
shop would provide the services for people who prefer to ride their bikes for commuting to work
and performing everyday errands in the local economy. The fact that more residents will be
present in this area increases the traffic and visibility for such a shop. Residents will need repairs
for their bicycles as well as new bicycles to replace them. And the many workers and residents
in the area will enjoy a nice sandwich and cup of coffee for lunch and even a nice place to relax
after work. Right now there are approximately 21,868 office and non-office workers in
downtown Montgomery alone. These workers spend $28, 267, 000.00 in expenditures per year
all together and spend $15,671,300.00 of that on full and limited service restaurants and
$2,266,851.00 of that on drinking places (http://www.developmontgomery.com/). These people
are a great possible market for a bike café.
Political and Legal Forces
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
The political / legal forces other than the usual business license needed to operate in the
industry mostly relate to political instability in local and global markets. There have not been any
price controls in the global coffee trade since 1989, when the buffer-stock system broke down
(http://tutor2u.net/economics/...). This causes buyers to have power over the market which can
force the price that farmers receive for their product to decrease. This can create poverty and
damage the chance of sustainable development for countries and regions that are economically
dependent on coffee production. This could also damage the corporate social responsibility of
the company. There are also legal barriers of how the beans are certified organic according to the
California Organic Foods Act and the standards of the International Federation of Organic
Agriculture Movements. There is now a thing called fair trade coffee where the coffee is traded
by bypassing the trader and giving the producer and buyer higher profits. There are also
regulations put into place by the Food and Drug Administration and the Food Modernization
Act; for instance, food safety in the food portion of the business and that importers would be
accountable for verifying that their foreign suppliers are implementing modern, prevention-
oriented food safety practices, and achieving the same level of food safety as domestic growers
and processors. These rules are believed to help the FDA prevent potentially harmful food from
getting to U.S. consumers and improve the safety of the U.S. food supply. They also help to
increase efficiency by reducing redundant food safety audits (http://www.ncausa.org/...).
The political/legal environment in the bicycle industry can be viewed from the federal,
state, and local levels. The federal and state way is through MAP-21, which is a federal long
term program that gives money to states on a performance based system to improve
transportation projects and programs to help states meet the requirements of the Clean Air Act.
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
The program allows for a lump sum total instead of an individual authorization needed for each
program. A portion of the funds is set aside specifically for the state’s transportation
alternatives. These funds can be used to put in bike lanes, make other changes to roads and to
help boost the use of alternative transportation such as bicycles to improve air quality and to
reduce congestion (http://www.fhwa.dot.gov/map21/factsheets/cmaq.cfm). The City of
Montgomery has included bicycles in its planning in “The Plan for Oak Park and Centennial
Hill” plan adopted in December of 2011. The planning committee included a statement
concerning the necessity of providing for the safe operation of bicycles in these areas. They
propose safe motor vehicle speeds and reverse parking for vehicles to be able to see pedestrians
and bicyclists when they exit the parking places (http://www.montgomeryal.gov/...). The
Montgomery Metropolitan Organization has a publication called the 2012 Bicycle and Pedestrian
Plan that includes benefits of bicycling or walking instead of driving, and what it can bring to the
community as a whole. They set out many goals including to create a pedestrian and bicycle
network that will nurture economic growth and competitiveness in the River Region and to
ensure the mobility of all citizens. Another goal is to put together an initiative to educate citizens
on bicycle and pedestrian safety. They also want to address security issues that affect the bicycle
and pedestrian community and to develop a complete street policy. They also include ensuring
facilities for all modes of transportation in residential, retail and commercial development, and
redevelopment areas. The Montgomery Bicycle Club was a large contributor to the development
of this plan. Considering the available resources, the city of Montgomery is not likely to be
against a bicycle shop/establishment in the downtown area (http://www.montgomerympo.org/...).
The Business License will be a necessary expense but the city planners would probably welcome
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
any business that encourages commercial and residential traffic in the downtown area, especially
one that can help put a foot forward on their bicycle and pedestrian plan.
Competitive Forces
In the bicycling business alone, there is an “indirect competition consists of mass
retailers, such as Wal-Mart, K-Mart and ... All of these have significantly lower prices; however,
the quality of their bikes is much lower… None of these large retailers have service capabilities”
(Retail Bike). All major retailers that sell bicycles can marginally affect the customer flow for
the company. For the bike café concept in the River region, there are no competitive forces
affecting the company because the concept will be the only one available. Some bicycle shops
offer coffee but nothing to the degree of a fully equipped gourmet kitchen. The addition of a café
is the main reason why there would not be any threatening competition for the company.
Technological Forces
There are no technological forces that can affect the bike café company only if the
company decides to embrace the changes of technology and utilize them in the service process.
With the design of bikes becoming more technologically savvy, this new innovation can increase
the flow of customers, targeting the cyclist community and tourists the most, if the company
decides to offer the new products. If the company chooses not to carry the new innovative
products then the new bicycle technology could be a technological force that can affect the
company’s bicycle profits.
Service Concept
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
At Cafe de Sprocket, we will provide a people processing and possession process service.
We offer a cafe, bicycle shop, and repair service under the same roof. We would have a people
processing service from the cafe requiring customers to walk into our establishment and order
food as well as eat in with friends. The bicycle shop portion of the business is also considered
people processing because we offer the opportunity for customers to come in and buy a bicycle
as well as ordering the bike online and picking it up at the store. No matter how the customer
decides to actually buy the bicycle, they would still have to come to the establishment and obtain
the product which makes the bicycle shop a people processing service as well. On the other hand,
the repair shop would be possession processing because you can bring your bicycles to the store
and get it fixed or painting or even altered. This unique service can attract any customer that has
a bicycle whether it is for professional or leisure reasons.
The Pre-Purchase Stage
During the pre-purchase stage, our target customers will be inclined to research our
business and learn about all of our services offered first but after visiting the facilities, they will
not need to depend on our website for anything but purchasing a bicycle. When customers are
searching for a café and/or a bicycle shop, they will find that our business is a very unique
business that is not available in the vicinity. In the Montgomery, AL area, there are no bike
café’s which makes the possibility of alternatives none existent. This fact is the main reason why
our concept alone is our sustainable competitive advantage.
Due to our variety of services, Café de Sprocket has many search attributes experienced
by first-time customers. For the café service offered, it has a search, experience, and credence
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
attribute due to the fact that you can sample the food but you do not know ahead of time if you
will like the food or how sanitized the kitchen is. These many attributes could make the initial
search difficult to evaluate. However, receiving the list of items offered in the café could give the
potential customer the idea of what we serve and decide from the food items listed. This process
may seem hard to some but not to all because this process is the same as searching any new
restaurant that people look up before going from curiosity.
On the bicycle side of the business, the search attribute involved is the main evaluative
attribute. When customers are looking for a business to come to that offers bicycles, they know
the bikes they are looking for so the bicycle portion of the business would not be hard to evaluate
because the quality of the same bicycle will not differ among the competition. The café portion
of the business will be considered the determinant attribute of the business that will attract
customers to come in and purchase a bike and indulge in the delicious food being served in the
café.
Exposed Risk To Potential Customers
There are different risks accompanied with the each service offered at Café de Sprocket.
When customers are online researching our business for a bicycle, they will find that they can
pay for the bicycle online and pick it up in store. This online payment option can cause a
financial risk for the customer. Customer will have a concern that the business could steal their
information and identity and/or the system crashes and charges the customer more than assigned
or does not send in the order and risk of the business selling the specific item. This risk could
cause customers not to use our online payment services and depend on face to face contact. On
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
the other hand, the café has a sensory perceived risk. The question of concern from the customer
is “Will I enjoy their culinary services?” This risk is high for first-time consumers because many
people have a hard time trying out new establishments when they already have their favorites.
Offering specials and samples could help lower the sensory risk of the café. Between both the
café and the bicycle shop, they both obtain a functional risk of customer service. According to
customers, the pictures of the facilities service offerings may look nice but it does not guarantee
a spectacular customer experience. The first impression of the service is always crucial to the
customer so the assurance of great customer service by reviews, word-of-mouth, and evidence
management could help reduce the sensory risk of the service experience.
Adequate And Desired Service Offering
In our service, customers will establish adequate and desired service offerings.
Customers’ adequate service offering from our establishment would be in comparison to
McDonald’s. You arrive at the building and throughout the service encounter; you do not feel
comfortable to be there. You feel like another number that has come in for a coffee or bike. Our
target market will establish this level as their adequate service offering because they will expect
the highest level of service from Café de Sprocket. If they receive adequate service, they will
assume that the business is running slow that day and only accept the service only if it is on a
rare occasion because adequate service goes against our mission statement and culture. Our level
of service will mostly correspond with our customers desired service offering; this service
offering includes being welcomed into the business. The culture of the business will permeate
the air and release a positive vibe across the building and elate every customer; the delicate sweet
smell of coffee will entice the customers to gravitate towards the café. Even if you are there
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
initially for a bicycle, the smell and atmosphere of the business and café will cause them to leave
with a purchase from the café on their credit cards. The employees will treat each customers will
respect and belonging. We will acknowledge our regulars and build relationships with our new
customers. Overall, the desired service offering at Café de Sprocket is a positive family
atmosphere that never dies.
Customer’s Role during the Service Encounter Stage
During the service encounter stage, the customer will acknowledge the high contact
service provided. Every service that is offered in Café de Sprocket requires the customers and the
service provider to interact face to face. In order to eat at the café or even purchase and obtain
your bicycle, the customer has to be in the establishment. The customers’ role in the service
encounter is to arrive at the establishment safely, observe and select a café item or bicycle, pay
for the service, and enjoy their purchase. The role of our customers is simple but effective if
implemented correctly. The simplicity of the role is interconnected with the high standards of our
customer service experience. This high level puts majority of the role responsibility on the
business staff; they are responsible for informing the customers of the script which will then help
the customer understand their role and the importance of cooperation.
The Post-Encounter Stage
During the post-encounter stage, customers will compare their customer experience with
their desired service offering expectation. If the level experienced is lower than the customer will
have a negative disconfirmation for the business and will display their negative feelings online or
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Kenneth Hudson
Passionate Telfair
to other colleagues. This action can also occur when confirmation or positive conformation is
recognized and there are many methods that will allow the company to collect the information.
In order to select appropriate data collecting methods, we must acknowledge the increasing
usage of the internet and social media for reviews of businesses. So we can monitor the reviews
submitted to our website and social media to collect the overall experience of the customer and
use that knowledge to enhance our business to the level we have set in our mission statement.
We can also set up a schedule internet inspection of all search engines; this includes periodically
setting aside a time for the marketing team to go to every search engine possible and search our
business and locate every external site that has reviews of the company. We will also use this
data to better enhance the service of the organization. We strive to enhance our company when
there is a high demand of complaints on a specific issue because our company is customer-
oriented. We understand that the customer is the business since we are a business to consumer
establishment.
Market strategy and Service Innovation
Café de Sprocket utilizes the market focused strategy by focusing on the cycling
community. We initially offer bicycles and accessories needed for their riding experience, but we
also offer a café for customers to come and relax, eat a meal, and converse with fellow citizens
of the cycling community. With our narrow target market and unique features we enjoy the idea
of having a market focused strategy that will make us different from any possible competition. In
the service marketing field, our proposed concept would be considered a major service
innovation because we have added the sale of coffee and food items along with our offering and
repairing of bicycles. There are businesses in the northern part of the United States that have
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Kenneth Hudson
Passionate Telfair
applied the same concept but the market has not been defined in the southern area including
Montgomery, AL. This addition of service is also the determinant attribute of our company.
Product Characterization
The products in the café and in the bike shop are primarily for consumers. I would have
to place our café products in the convenience and specialty category because of the simplicity
and the ease of use of the sandwiches and beverages that we offer but recognize them as
specialty since they are not the run of the mill kind of sandwiches and beverages. I would place
the bike shop products in the specialty or unsought after category because the bikes that we are
selling are not as sought after by the region in which we are selling in. Many of our customers
will be repeat customers and that is who we will be selling to more often than the newcomer.
Product Fit In Product Mix
Our products of coffee and gourmet sandwiches will fit in nicely with our servicescape
and sense of calm and relaxation. Our bike offering will also fit in with our concept of wanting to
have a place for people to come and hang out and relax by offering bikes that encourage people
not only to be competitive in the bike world, but also to be a means for relaxation and adventure.
Core Service Offered
The core service offering in the café is gourmet sandwiches, coffees, and espressos.
Everything will be prepared in the kitchen, but everything past the register will be up to the
customer, such as seating and condiments, etc. The bike shops core service offerings will be full
service bike maintenance and bike sales.
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
Supplementary Services Offered
Supplementary services in the café should be offered, such as possible merchandise
sales, possibly the ability for customers to be able to control TV’s in the facility, also offerings
such as rewards systems should be offered but for the most part everything in the café will be
self-service. In the Bike shop some supplementary services will be bike sales and custom bike
ordering, along with a possible rewards system where customers can earn free sandwiches,
coffee, and merchandise according to the amount of money spent on service or bike purchases.
Also service packages would be offered to speed up the decision making of customers who
would like for their bikes to be overhauled or just regularly maintained just like at oil changing
places for cars or carwashes.
Service Concept
For the Café, the service should be somewhat immediate and if not immediate then is
should be delivered in a very timely fashion. In the bike shop the service of maintenance should
be delivered as quickly as possible preferably within an hour for routine maintenance services all
depending on supply of parts and other things of course. Also with the sales portion it should be
easy to just roll a bike out for a person who knows what they want by on the other hand ordering
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
specialty bikes for individuals could take some time but would like to keep it within the 1-2
week range when trying to get a bike in for a customer.
Table 2: Example of Cafe de Sprocket's Service Script/ Blueprint
Product Involvement
The product that we are offering will be both, a high and low level product. This is
mainly because we have two different products. The café will serve low involvement products
like sandwiches, coffees, sodas, and a few other foods and drinks. These are low involvement
items because of the urge they need to purchase. These aren’t huge items that a consumer will
have to debate over whether they should buy or not. The only debate would be if we can make
the customer choose our café over other restaurants and food establishments in the area. Once
we get in the mind of the customer, having them purchase “food” is the easy part. On the other
1. Customer enters
building
2. Employee greets
customer andasks
which service theyare
in needof today
3. Customer responds
to question
4. Employee walks
customer to the
correct business
5. Customer
approaches
counter/bicycle
showcase
6. Employee greets
customers andask if
theyneedhelp
7. Customer orders
cafe items/tests
bicycle/accessories
8. Employee confims
order/ tells custmer of
bicycle warrranties
9. Prep staff prepares
food/drinkitem
10. Employee informs
customer of price
11. Customer
purchasescafe/bicycle
items
12. Customer retrieves
purchase and exits the
establishmnet satisfied
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Kenneth Hudson
Passionate Telfair
hand, the bikes we are selling will be more involved. Even though we may have some lower-end
bike models in the store, most of what we will carry will be high-end bikes. It is not an impulse
purchase. Consumers will have to think, compare, debate, and research before spending $3,000
or $4,000 on a bicycle. Even though there is a huge market and consumers that are big into
cycling will not have as much reservation with this purchase, there will still be a considerable
amount of thought into the purchase.
View of Company against Competitors
I think our position in the minds of customers will have to be differentiated. We will not
be like any other cycle shop in the area. We will offer bicycles, equipment, and other cycling
accessories, but we are also a café. This is what will set us apart from the competition. Our
problem will be within the restaurant and food industry. We will have to differentiate our
sandwiches from all the other “food joints” around town. Our key to this will be the health
benefits our foods will offer. We will not be the typical fast-food place, nor will we be a sit-
down- and eat, full blown restaurant. Our niche will be that we offer a relaxing atmosphere
where customers can come in and enjoy a cup of coffee, and get a healthy sandwich, while
feeling like they are part of a group. Our bikes will have to be set apart from the rest as well.
Even though there are other bike shops in the area, we offer a lot more than that. We need to let
our service, and comradery be the “extra mile” that other shops cannot, or will not do.
I believe we should employ service level in order to see the proportion of customers that
are coming in. Our challenge is to bring two different groups together. We are offering services
to not only the cycling community, but also to those who do not bike, but enjoy a nice cup of
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java, and a healthy sandwich or snack. We need to figure out how many customers of each side
of our business are coming in, in order to make changes and accommodate both sides to the best
of our ability. Service levels will help us figure out the involvement of both markets.
Product Branding
When deciding how to brand our products, we feel we need to do both individual
branding and manufacturer branding. By using the big name manufacturers in cycling, we will
draw in the biking market. We are certainly going to have to use the names of our vendors in
order to make the cycling community aware that we are now a force in the retail market. By
carrying big name brands, we can gain exposure as a reputable cycle shop. Our café will have to
have its own identity. We do not want it to be branded like any other food establishment. Our
main objective is to offer healthy foods, and promote a healthy lifestyle. By branding ourselves
individually with the café, we have the ability to set our own identity and not have the bad
imaging of any other restaurant. Even though, some of the big name branding could prove to be
helpful in starting our concept, we really feel we will be fine in the long run by promoting our
own idea, and healthy style. We intend to bring a new idea to the area and make people feel as
though they belong to this group. Both cyclists and non-cyclists will be able to benefit from the
café-bike shop.
Factors That Affect Diffusion
There are many factors that will affect how our products are accepted in the community.
Obviously we have to be visible to the community. As a bike shop, we need to get out and
participate in various rides, even those that are not in the specific area that we are in. We have a
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vision to have cyclists from all over the state visit our shop, especially the café. The only way to
achieve this idea is to be visible in as many cycling communities as possible. We plan to use
these events to bring riders to the area, whether they are stopping in when passing through, or
they are visiting us to participate in one of our events. Another aspect of the bike shop visibility
will be tourism. In a long-term plan, we want to be able to rent bikes to cyclists, and take tours
of the River Region. With the help of the State of Alabama, we are hoping there will be laws
passed to accommodate cyclists in the area. If this is done, we will definitely hold a key to
inviting cyclists from all over to the River Region to participate in these various riding events
and tours. Another factor to diffusion in the market will be the products we carry. Corporate
promotions from the bikes we offer will play a big role in our acceptance in the community. As
we increase our inventory with reputable brands, we too will grow as a reputable retailer to
cyclists. On the café side, the products will have to stand out to be accepted. Our goal, as has
been stated, is to promote health. Our sandwiches are going to have to stand up to this
expectation. As we use these healthy sandwiches to gain market share, we have to make sure
they live up to the expectations we set. We will have to make sure the food is of the highest
quality available. If we can accomplish the healthy side that we set out to do, customers will
talk, and hopefully this will spread. Another very important factor of visibility to us will be with
the bike shop. As we have stated, we intend to be very active in the community. By putting on
riding events, and participating in events that are meaningful (i.e. charities, demonstrations, etc.),
we hope the visibility will affect our diffusion into the market tremendously.
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Service Complexity
We do not expect there to be a whole lot of complexity with our plan to enter the market.
Our biggest challenge, we feel, will be in the café. The idea we have is simple. We want to
offer a place for cyclists to come and purchase their bikes, accessories, equipment or parts. We
are going to offer service which we hope is second to none. We intend on doing this by going
the extra mile, whatever it may be for each sale or service. We are also offering these cyclists
somewhere to stop in, relax, and have a cup of coffee, or even grab a snack. We also plan to
bring another group of people together with these cyclists. By inviting non-cyclists to the café to
hang out, we hope to accomplish one thing; a healthy lifestyle. Along the way on this journey,
we would love to increase the number of cyclists by showing these non-cyclists the benefits and
comradery that the cycling can bring. If we convert just a small percentage of the non-cyclists to
become cyclists, we have accomplished one of our goals. The idea itself is simple. The task of
being successful in it will be a tough road, but one that we are certainly thinking will be very
beneficial.
Service Options and Relative Advantage
As we have said, this will be a tough road. Not only do we have to break into the market
as a cycle shop, we have to take over the food and restaurant segment of the market as well. The
cycle shop will not be as big of a challenge as the café shop. Yes, we will have to become a
visible retailer in a market that already has a couple of bike shops. However, we do not feel this
will be our toughest part of the journey. Becoming a factor in the food industry will be more
challenging. We do feel though that we have a product that, once it is noticed, will be much
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more acceptable than other food establishments. With the United States today being so health
conscious, now is the best time to promote a healthy option for those looking for something to
eat. Even though entering into the food market is almost impossible without a big name, we do
feel our product differentiation is our biggest asset to accomplish this feat. Entering into the
cycling retail market will be tough, we are not thinking this will be an easy road, but we just feel
using our brands as our flagship, we should be able to be a factor in the market. We intend on
being much more active in the River Region than the other shops have been in the past years, and
if we can pull that off, we will have a leg up in the race to get the business of consumers.
Our relative advantage ties directly into the previous paragraph. We are going to use our
café shop as the difference between us and the rest of the bike shops in the area. With the idea of
having a café for cyclists to stop in and relax during their trek, or simply just a place for average
people to come and hang out, we have something that the other shops simply cannot match.
Even though our bike shop will more than likely provide most of our market share when
opening, we hope the trend starts to flop as time goes by. At first, we anticipate that the bike
shop will bring people to the café. But, as we gain exposure, we anticipate that the café will
actually bring people to the world of cycling, and yes, the bike shop. As cycling is definitely a
healthy option for fitness, we plan on having the healthiest foods available in our café. We plan
to use this as our staple for bring the cycling and non-cycling communities together. If we can
draw attraction to the café, and use this to increase the number of cyclists in the market, the bike
shop will certainly be a success. By giving cyclists and non-cyclists a place to relax and
hangout, we are accommodating the chance to build networks, friendships and ultimately groups,
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that consumers and feel that they are a part of. We have the vision of that “country club” feeling,
just without the membership fees.
Overall Service Observability
The services that we are going to offer are fairly visible. The café will have food that
will either taste good, or it will not. It does not get much more visible than that. Hopefully, as
we intend, the food will be exceptional, and will catch on immediately. As we promote healthy
options, we plan to hold the integrity of the food at the highest level possible. Same goes with
the coffee that we offer. We plan on having coffee and drinks that will be a better option for
consumers. I would like to think that the bike shop has a fairly visible service as well. When a
consumer walks in to purchase a bike, we want to make sure they get the best option available.
We intend on fitting them to the bike that fits them perfectly. By providing the extra attention to
each client, in order to make sure they walk out happy, and with the bike they want and need, we
hope to use this as our visibility to the service. I would like to think our pricing would be
another service visibility factor. Even though we do have to set prices in order to make the
business profitable, we are going to do our best to make sure the customers get a great product at
a very, very fair price.
Service Consumer Consistency
We have to make sure the products are available for a trial in order to let customers see
exactly what our concept is. Even though there will likely be a large segment of the market that
would walk in an try our healthy options, the fact remains that a lot of the market will not give us
a second look without a name brand behind us. In order to gain these customers we are going to
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have to offer trials. There are many ways we could do this; we could post promotions for a free
sandwich on first visit, or something similar to this on a “grand opening day”. The problem with
the grand opening day would be getting the word out that we are having this event. We could
advertise the day through different medians, and would probably be fairly successful. However,
we need to figure out a way to get consumers in the door to try it that maybe did not make it to
the grand opening. Using social media is the thing of today, so we would likely try to blast a
post out with something that offered the free item in order to get a customer in the door. Yes, we
would probably have some consumers that would use a coupon or this opportunity more than
once, but we actually do not see that as a bad thing. Even though, yes, we would like for it to be
a one-time use only, obviously if a consumer goes through the trouble to use something like this
twice or so, they enjoyed the product. We have discussed the options of rewards, as well as
referral programs in order to get customers in the door.
One idea we have would be obviously a rewards program. Some of the popular options
are like “get your 5th sandwich free”, or something similar to this. As far as referrals, we have
kind of used the approach that Dish Network has used lately. In the past, a referral program was
only for the person that referred a new customer. We want to do this a little different. By
offering both the new customer and the referring customer a reward, we stand a better chance of
increasing the number of people that will visit our café for the first time. We could easily do
something like a free sandwich or drink for both of them when a referral comes through the door.
With food costs as low as they are, this is an inexpensive way to increase the market share, and
touch as many people as possible, without spending ourselves out of business. Another thing we
plan on doing is a demo, or, riding day. This would give cyclists the opportunity to come and try
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out a new bike, in hopes of them purchasing a new one from us. We would need to set this up
like golf companies do, as demo days. We would like to have one, or maybe two manufacturers
come out with a few different options, and let people simply try them out. Another option to the
demo day for bikes would be a rental option. We plan to set up a way for cyclists to rent a new
model bike, and take it on a ride to see how they like it. This is a great way to show people the
level of service that we plan on offering to the River Region.
Target Market Summary
As we looked at the make-up of our target market we were able to utilize several pieces
of information. In reference to our geographic market, we are looking at locating in central
Alabama. The most likely location for us will fall in the River Region, specifically Montgomery.
Montgomery has a population of 201,322, and when included with the entire River Region
(Elmore and Autauga Counties) we will increase our target population by another 136,148
people. The demographics in which we are trying to reach are a rather broad market. Almost
everyone will ride a bike at some point in their life, and we want them to buy from us. On top of
that, everyone is going to eat every day. If we can just get a fraction of the “eating” market to
visit and eat at our café, we will definitely make a name for ourselves.
As I stated almost everyone is going to have a bike at some point in their life. So using
this at our demo for the bike side of the business, we are really going to focus on male and
female person from age 6 to 65. We will take this market and segment it into smaller, more
identifiable groups. Of course we will have the avid cyclists and then we will have the average
cyclist that has children. Taking the avid cyclist in consideration, we are going to target both
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male and female persons from the age of 21 to 54 and having an average income of $60,000+.
For the families with children we will target a slightly lower income level since they more than
likely won’t be looking to purchase our higher end bicycle. We will target families making a
household income of $50,000+. These income levels will apply to both sides of our business.
Yes, we will definitely cater to the single income households in the café, and will look at much
lower incomes as our ideal target, but, we do not want to be the “next $1 menu place”. We will
hold our food and drinks to a high standard, and hopefully we will have a bit higher income
clientele.
In relation to the psychographics of our target market we will be focusing on several
things that will relate to our potential customers. The target we are looking for will be the ones
that make health and fitness a priority in their life. Typically these people will enjoy watching
sporting events. They are usually competitive people and even compete in various sporting
events. This target market enjoys recreational activities and overall enjoy being outdoors and
physically active. We may attempt to target our market based on their reading habits as well.
Most of our potential customers that do read, will likely read magazines like Sports Illustrated,
Mountain Biking Weekly, Serious Cycling, Biking for the Family, and others like these. These
psychographics apply to the café as well. The people that we are looking for to walk through our
doors are the health conscious crowd. They are the ones that like to know that the food they are
eating isn’t bad for them. We are not saying that less healthy conscious people are going to
avoid our café; they just simply are not our “ideal” target.
The behavior of the target market will be important to us as a business as well. For both
the bike shop and the café we are looking for the consumers that take pride in how they feel and
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look on a daily basis. They are the ones that enjoy looking good just because it makes them feel
better. They will work out a bit more than other people because they want to keep their body and
mind in shape. This market will also shop regularly at sporting goods stores and at grocery
stores that promise healthier and fresher food items. This market will often shop at high-end
retailers because they want quality merchandise, and not necessarily the least expensive that they
can find. They also are inclined to watch or listen to more sports and outdoors programs because
of their personal interests.
Potential Jaycustomers
The threat of jaycustomers exists within every business and every industry. I believe
Tour de Sprocket will have its fair share of jaycustomers as well. These jaycustomers could
really be anyone, but the biggest threats will probably be the “click” or followers of the other
bike stores in town. I do not believe they will really be irate or anything similar to that, but I do
see them bashing our business verbally and diverting customers away. I feel they will use
negativity about us in order to try and drive customers away from our place, and possibly into
theirs. I hear the first complaint being regarded towards our café; “they don’t know bikes, they
are making lattes”. This is the type of jaycustomer I believe we will have to deal with. I am sure
we will have an unhappy customer at some point, and this too will turn into some form of
jaycustomer. I just do not think you can simply please everyone when it comes to retail and
restaurant. The other jaycustomer we may see will come from maybe lack of a product or
accessory that they are looking for. I do not think this will be an obnoxious jaycustomer either,
but it will be one that we will have to deal with and do our best to please. I think the last
jaycustomer we will have to deal with will be in the café. Typically the people that go into
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coffee shops and delis aren’t going to be a real jaycustomer; when these customers have an issue,
they are going to be easy to deal with and please.
Target Market Information Processing
The target market of Café de Sprocket will use routine, limited, and extensive
information processing. Both the bike shop and the café will have a market that will initially use
limited processing. At first, they will want to do a little research to see what it is we do and
offer. As far at the café side goes, these customers are going to ask around and try to find out
information, and what other think about our sandwiches and coffees. After we reel these
customers in, they should turn into a routine processing market. We want them to not think
about other places that they could get a sandwich or a latte. We want to be their “top of mind”
decision.
On the bike shop side, these customers are going to use limited and extensive information
processing the most. For those customers that want an entry level bike, and do not want to spend
a ton of money, I expect them to be the limited group. The other group, that wants a high-end
bike, is going to do a lot more research to see what we offer. This target market is going to find
out which manufacturers offer which features. I also expect them to shop around and do price
comparisons after they figure out exactly what it is that they want.
Niche Market Strategy
Our company will use the niche strategy because we offer a good and service with
features that appeal to a particular minority market subgroup. Our unique concept will be easily
distinguished from other businesses, and it will also be produced and sold for specialized uses
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within its corresponding niche market. Our niche market is primarily cyclists in the community
but any residents or tourists are welcomed to enjoy our business along with the cyclists.
Although it may seem like a mass market, our concept will not approach the mass market. We
will only appeal to people who understand of our concept. Many people may look at the business
as abnormal which will deter a piece of the community but the cyclists will enjoy the concept.
The cycling community is a niche market in our target region due to lack of residents who desire
cycling and lack of proper road markers for cyclists in the community.
Primary Benefit and Determinant Attribute
The primary benefit and determinant attribute of our business are one in the same: the
café. If you look at the bicycle portion of the business being our core product, the café is a
secondary product that benefits the target market. In the bicycle sales industry, many businesses
do not offer a café in the same vicinity. In the downtown Montgomery Alabama area, there are
no businesses of this caliber which makes the additional café service a determinant attribute
when researching your options. We pride ourselves in the diversity of our business and
sustainability of the concept in the River region area. The café and extraordinary service are our
target markets primary benefits.
Pricing Strategies
Our pricing objective should be a combination of revenue and profit, as well as patronage
and user based. Using the revenue and profit as part of our pricing objective makes sense
because, as in any business, our objective is to make a profit. If a business is not making a profit,
there really is no point in the business being open, unless of course we opt to be a non-profit,
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which we are not. By seeking a profit, we are looking to make the largest possible profit that we
can. At the same time, we are not going to do this at the expense of our customer’s integrity.
Even though we want to make as much profit as we can, we will not “stick it to” our customers.
Covering our costs goes hand-in-hand with making a profit. As long as we cover every cost we
have, we will be able to keep the doors open. We really intend to cover every cost we incur, as
well as make a profit to make the business grow and be successful.
The pricing objective involving patronage and user-based relations is an essential part of
our business. As we said in our business plan, we plan on building a huge following of
customers and regulars. By doing this, we will increase the number of repeat customers that we
have. This is an important part of any business as well. Repeat customers are the ones that can
refer new customer and speak positively about Café de Sprocket. These repeat customers will
help us build the demand we want to see in both sides of our business. If we can successfully do
this, we will successfully build a great customer base at the same time. This is a huge asset to
the café side of the business. This is what we explained that we wanted to see in our business
plan. By having a customer base that comes into the café and hangs out or grabs a coffee, we
will build a spot where people can feel like they are part of a group.
This also goes along with the nonmonetary costs that customers will incur. Our hopes are
that they will spend time in our café, lots of time! As far as the bike side goes, we are hoping for
the same thing. As we have talked about, we want to participate in bike rides, and be a part of
some type of touring program. If we are going to be successful in this, it’s going to take the
commitment of our customers to participate in these rides. This too will take time out of their
day and/or weekend.
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Kenneth Hudson
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Promotional Mix and Advertising
The company should use a good mix of advertising, sales promotion and personal selling
to get the word out about the new business and to effectively promote the different
products/services that the company will be providing. The company should use institutional
advertising at first to basically get their name out and to inform the public about its advocacies
and participations in helping the community to be healthier and to provide an atmosphere for a
quick good sandwich or a delightful coffee. They should also in the long run use both, product
and institutional advertising, product advertising they can use to promote sales on specific
products or even just to get the brand of the café/bike shop out there as a unique experience in
and of itself.
Product Communication
Our company will inform and remind within ethical reasoning to get their target market
in the doors. Otherwise the market most likely will never hear about it and also, the more that is
known, then more business traffic will follow. Café de Sprocket will inform the target market,
meaning we will do everything we can to give out information on social, health, and other
benefits of the products and services that we can provide. Doing these things can develop initial
demand for the services and goods. We can also use information to pull in customers who might
just be curious or are looking for something new. Our company also needs to remind the target
market about the things they offer periodically, especially if they start seeing a decrease in
regulars and also to pull new customers in to the target market. I do not think that persuasion is
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needed yet since the market is so small already and there is not enough competitors close enough
to compete with our overall concept.
Product Intangibility
We can overcome product intangibility by creating a strong image and brand recognition;
this will reduce the potential level perceived by possible customers. This strong image and brand
recognition comes from informing and reminding the target market and jaycustomers about our
products and services. This also comes back to how important service delivery is; service
delivery can be the one thing that keeps people coming back for more. The better trained the
staff is, the better the service will be. To overcome intangibility we have to make sure that the
service provided by our employees to our customers is equally as good, if not better than the
food, coffee, or bike sales that we provide.
Promotion Communication
We need to communicate the benefits of bike riding, not just health benefits but also the social
and networking potential of the community. They also need to communicate how much of a
value the café offers and how it is a better and healthier option for lunch to the downtown and
surrounding communities. We will communicate this information through local advertising and
through many forms of electronic and physical advertising, Facebook, billboards, TV, word of
mouth. Aggressive advertising will bring the numbers out and the more people that hear about it
and enjoy it and realize the benefits and the enjoyment of the atmosphere then the more returning
customers they will have. They could also come up with promotions on coffee or test rides or
anything of the sort.
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Media Vehicles and Scheduling
The media schedule that is appropriate for Café de Sprocket is going to be classified as
“multiple”. In this day and age, I feel our first media vehicle will be through social media.
However, we are going to have to find a digital media company that specializes in impressions
and touching a specific target market. Social media such as Facebook, Twitter, and Instagram
are great, but there are many ways to touch our market in a more effective manner. I am not
saying we will not use these, but there are many other methods of digital media that we need to
utilize. I believe we need to also utilize outdoor, or billboards. The strategic way to use these is
at major intersections of the interstate. We will not use these a lot as we do not feel they are
“most” effective, but when used strategically, they are effective. We will also use radio in
certain situations in order to promote events or specials that we participate in. Radio is a great
median that can touch a great deal of people as well when used correctly. Television is another
media vehicle that we will use, however we will use it less than radio. Television has died out a
little due to the emergence of DVR systems. The only time we will use television will be during
sporting events, or other similar shows in which views will not want to watch at a later point.
The times that we will not use television will be during sitcoms, reality shows, and other shows
that views tend to DVR and watch at a later point, or use Netflix to watch the program.
The way in which we use these media vehicles will vary. Of course we will use a
seasonal schedule for the bike shop. We will advertise at various points throughout the year, but
there will be definitely an emphasis on the warmer riding weather. We do realize that many
cyclists ride during the entire year, but I do not feel there are enough to warrant a continuous
schedule. There will be points during the cold weather season that we will advertise, such as
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Christmas, but we just do not feel there is enough revenue during the non-peak times to justify
advertising. Along with seasonal advertising, we will use a pulsing method, during the peak
times of the year that we are advertising in. By using the pulsing method during these times, we
are able to continuously keep our name out there and have people hearing about us, but we will
definitely increase the frequency during certain times of the year. For the café side of the
business, we will most likely use the continuous schedule. With it focusing on the restaurant, we
need to push that to people all year. The café is not like the bike shop, people eat year round,
and they certainly drink coffee nearly every single day. There will be times that we run
promotions or specials in which we pulse the schedule, but as a whole we will be running the ads
continuously.
Loyalty Bonds
Since we pride ourselves on customer service, we know we have to have loyalty bond
methods in place to help customer retention. In the business’s entirety, we will implement a
social bond. We want to get to know our customers by name so they feel at home. Whenever a
customer comes in the door, we want to make them feel comfortable so knowing their name and
engaging in a conversation is important to developing a strong social bond. This method will
take time to achieve but we have faith that we will select employees that are receptive to our
customer service standards and make the process easy. Along with the social bonds, we will also
have financial rewards. In our marketing objectives, we made a goal to establish 70% of all
customers to the Café Reward program. In this reward program, we will offer our members
birthday promotions and general discounts. Customers will be able to use their reward cards like
Walgreens; every visit you will be asked for your card and so many visits will award with a
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reward that can be used as a financial value. This incentive will also encourage customers to join
the reward program which in turn will help us achieve our 70% membership goal. We will also
offer discounts to all customers that can be used through a selected timeframe which will give
the customer a financial reward and encourage them to buy more products. We know that
discounts gives customers the idea that they are saving money they have budgeted to spend so
they tend to either save the money or purchase more items. We believe that we can develop a
strong customer relationship through our outstanding customer service, social bonds, and
financial rewards.
Consumer Promotions and Guarantees
We will use consumer sales promotion to attract new customers and grow your customer
base. We know that in order for residents to come to our business we must have promotions that
will attract them and keep them. For instance, we will offer free samples and free trial; this
approach limits the risk to customers when giving your product a try. Other promotion strategies
that help promote the business are coupons, percent-off discounts, buy one get one free deals,
etc. We will use these methods to help generate cash flow and profits as well as establish a good
reputation among the community. To lower the risk of enduring the service, we will have
guarantees in place. We will offer a combined guarantee for the entire business. In accordance
with the book, we will guarantee to deliver the café items and bicycles at a reasonable time, to
high quality standards, and to the degree stated in our mission statement. Should we fail to
deliver according to this guarantee, or should you be dissatisfied with any aspect of the service
provided, the consumer can deduct any amount from the final payment which deemed as fair.
We decided to use this guarantee because it displays the confidence in the service and product
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
quality that we possess. We know that our products and service will not be dissatisfaction to a
number of consumers that could make the guarantee a costly method. We are sure that any
complaints made will not be over 5% of the foot traffic and online customers combined.
Jonathan Mullins
Kenneth Hudson
Passionate Telfair
Works Cited
"83% of U.S. Adults Drink Coffee." Foodproductdesign.com. Informa Exhibitions LLC, 1 Apr.
2013. Web. 19 Feb. 2015.
Brown, Nick. "2014 Coffee Consumer Trends Report: More Gourmet, Single Cups."
Dailycoffeenews.com. Roast Magazine, 09 May 2014. Web. 13 Feb. 2015.
"Coffee by the Numbers." Www.hsph.harvard.edu. The President and Fellows of Harvard
College, n.d. Web. 11 Feb. 2015.
"Coffee Drinking Statistics." StatisticBrain.com. Statistic Brain RSS, 12 July 2014. Web. 11 Feb.
2015.
"Coffee Shop 2012." Sbdcnet.org. SBDCNet SBDC Clearinghouse, n.d. Web. 19 Feb. 2015.
Dwyer, Marge. "Increasing Daily Coffee Consumption May Reduce Type 2 Diabetes Risk."
Hsph.harvard.edu. The President and Fellows of Harvard College, 24 Apr. 2014. Web. 15
Feb. 2015.
Mohn, Tanya. "Growing Number of Bike Cafes Gear up to Serve Cyclists."Msnbc.com.
NBCNews.com, 10 Mar. 2011. Web. 14 Feb. 2015.
"Retail Bike Shop Business Plan." MoreBusiness.com. Khera Communications, Inc, n.d. Web.
14 Feb. 2015.
"Statistics and Facts about the U.S. Bicycle Industry." www.statista.com. Statista, n.d. Web. 17
Feb. 2015.
Szczepanski, Carolyn. "5 Tips for the Bike Industry: Women Bike." Bikeleague.org. League of
American Wheelmen, Inc, 17 Sept. 2013. Web. 13 Feb. 2015.

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Cafe' De' Sprocket Marketing Plan

  • 1. Jonathan Mullins Kenneth Hudson Passionate Telfair Café De’ Sprocket Market Plan At Café de Sprocket, we promise to provide outstanding customer service to our entire community to ensure a welcoming and friendly environment, while offering quality products that promote health and stability, at an economically friendly price. We also promise to offer durable and ergonomically designed bikes as well as creating a comradery by being actively present in the cycling community. Marketing Objectives Our marketing objectives are subject to a semi-annual schedule. At Café de Sprocket, we strive for a customer service satisfaction level between 70% - 85% because in business you have to be realistic and understand that all customers will not receive the same service anticipated. We plan to measure these satisfaction levels by giving our customers the opportunity to fill out a service survey that will give the business a sense of what customers perceive of their experience in our establishment. We will also maintain and monitor social media reviews; we will use the information from the internet to gauge how customers really feel about our business. This information will give us insight on the target market and their interests so we can change any processes that are ineffective to the consumer. Social Media can also help the business measure the level of product awareness in the community. We hope to see a 25% increase in product awareness; we want the community to be aware of the products and services we have to offer to benefit them. We plan to measure this objective by the amount of reviews online and traffic in- store. We assume that the amount of customers that come into our establishment will give us a sense of awareness. Business awareness and customer service will interconnect because the
  • 2. Jonathan Mullins Kenneth Hudson Passionate Telfair customers that participate in the service will base their reviews on the service received and outstanding customer service will lead to positive reviews and more in-store traffic. On the basis of our bicycle business, we strive to sale 120 bicycles per 6 months; measuring this objective will be primarily from inventory and our income statement. In the entirety of Café de Sprocket, we have set two objectives: experience a 5% increase semiannually in profitability and establish 70% of all customers to the Café Reward program. Current Bicycle Industry Trends All trends occurring at this time can only help the bike café concept instead of causing the business to fail like most bicycle startups. One current trend in the bicycling industry according to Tanya Mohn, an msnbc.com contributor, is the bike café concept. She states, “The cafés are part of the emerging bicycle culture sweeping many U.S. cities, which has spawned growing numbers of bike paths and lanes, public-private bike-sharing programs and better laws, according to the League of American Bicyclists”. This continuing trend will be the biggest benefit for the company since the concept is a bike café but extending to serving gourmet sandwiches and other hot meals instead of only coffee. Another trend in the bicycling industry is the new bike designs that cyclists desire to have. There are new bicycle designs being released at a continuous pace and it can help boost the bicycle industry by attracting a more diverse market than just cyclists. When looking at how the Bike Café industry operates, it’s best that we break it down and analyze both, bike shops and coffee houses separately. How the Coffee Industry Operate
  • 3. Jonathan Mullins Kenneth Hudson Passionate Telfair Researching the coffee industry, coffee shops have grown immensely popular over the past several years. With the entrance of coffee houses such as Starbucks, the most recognizable brand, the gourmet coffee craze has taken flight. The industry has soared over the past decade. According to the National Coffee Association’s most recent annual report, coffee drinkers in the U.S are gradually getting away from “non-gourmet” coffee and preferring more specialty and espresso-based coffees (Brown). Statistics from 2014 shows an increase of people who prefer to drink gourmet brews over a regular brew of coffee, from 13% to 18%. How the Bicycle Industry Operate The bicycle industry is a bit rocky according to statistics. Even though the major U.S manufacturers like Trek and Redline are still very popular, most of the bikes sold in the states are imported from China. In 2013, the sales dollar in the United States dropped nearly 300 million dollars. This figure is a decline from the previous year of 5.8 billion dollars (“Statistics and Facts about the U.S. Bicycle Industry”). Now, this number does include the sale of children’s bike as well. The adult market for bicycles is owned by women, ages 17 to 28. This group owns 60% of the market for adult riders (Szczepanski). Even though the cycling industry is on a bit of a decline, it appears that it is still a great industry to be a part of due to a diverse target market. S.W.O.T. Analysis: Coffee Industry The strengths and weaknesses of the coffee industry is a rather hard thing to navigate. With the popularity of coffee and premium espresso-based drinks, there isn’t much of a weakness to elaborate on. The only weakness could be the competitive market. With names like
  • 4. Jonathan Mullins Kenneth Hudson Passionate Telfair Starbucks and Dunkin’ Donuts ruling the market, getting a hand in their pockets is going to be a challenge. This does hinder the opportunities that could be open for someone trying to make their way in the market. However, with the rise in the number of coffee and espresso drinkers today, there is definitely plenty of wealth to be shared. The opportunity to edge your way into this market certainly lies in the numbers of people drinking coffee today. But, the threat side of this is our economy at this point and time. Many of the gourmet brands can be purchased at your local grocery store, so with less disposable income, consumers are likely to buy their coffee or espresso and brew it at home, rather than a coffee house. S.W.O.T. Analysis: Bicycle Industry The strengths and weaknesses of the cycling industry have a few different areas to cover. The strengths of the industry seem to fall into children, but this is also a weakness for the type company we are pursuing. Our prime customer is going to be adults that are part of a group or community. As the numbers of bike sales, in adults, continues to fall each year, the decrease is not enough to eliminate the concept of a bike café. Even though the adult numbers as a whole have declined, the numbers for women seem to be climbing. So, with the idea of a coffee shop as well, this could be strength for the target demographic we want to touch. Bike Café Competitive Advantage There is an abundance of data available that shows just how popular the coffee market is in the United States today. Just in the United States, 54% of the population over the age of 18 drinks coffee every day ("Coffee by the Numbers."). 54% alone is impressive enough, but to add
  • 5. Jonathan Mullins Kenneth Hudson Passionate Telfair to the top of it, those drinkers are drinking over three cups, at nine ounces each, per day ("Coffee Drinking Statistics."). The average cup of coffee in the United States is $1.38, while the average cup of espresso-based drink is $2.45. The significance of these prices is that, of the United States population, 100 million people drink coffee, and 30 million drink a premium style espresso. So when trying to decide if a coffee shop alone would be successful, data shows that the probability of success is definitely high. A further look into how competitive the coffee market is, we would need to look at who is buying coffee at what price. Do people prefer that premium cup of espresso, or would they spend money on traditional coffee at a relatively inexpensive fast-food store? Statistics show that only 29% of the people that drink coffee or espresso go to the cheap outlet for their cup of brew ("Coffee Drinking Statistics."). Another interesting fact to illustrate a competitive advantage of the coffee shop is health benefits. There has been plenty of research done to show that there are numerous health benefits to drinking coffee every day. According to a study, people who drank more than one cup over a four-year period had a 11% lower risk for type 2 diabetes (Dwyer). The competitive advantage in the cycling industry for this shop will fall in the addition of the coffee shop. In this market, the bikes shops cater to the “tri-athlete” by selling other retail items such as shoes and running gear. The advantage of our concept for this shop is going to be based around a gathering spot for local riders, as well as touring riders. The plan to rent cycles, and book tours will be far beyond anything that other cycle shops in the market are doing or even planning at this point. The bike/coffee shop should be able to own a market of riders who come to town wanting to tour the city. It should also have the market of riders that need or want a place to stop and “hangout” as a group or member.
  • 6. Jonathan Mullins Kenneth Hudson Passionate Telfair Coffee Drinking Statistics Total percentage of Americans over the age of 18 that drink coffee everyday 54% Total percentage of coffee consumption that takes place during breakfast hours 65% Total amount of money spent by importing coffee to U.S. each year $4 billion Total average of money spent on coffee each year by coffee drinker $164.71 Total number of U.S. daily coffee drinkers 100 million Total number of U.S. daily coffee drinkers who drink specialty beverages (lattes, cappuccinos, mochas, etc.) 30 million Percent of coffee drinkers who go to premium places (Starbucks, Coffee Bean) when they get coffee 34% Percent of people who go to lower-price outlets (McDonalds, Dunkin Donuts, etc.) when they get coffee 29% Total percentage of coffee consumed between meals 30% Total percentage of coffee drinkers who add cream and/or sugar 65% Total amount of U.S. coffee drinkers who claimto need a cup of coffee to start their day 60% Total percentage of coffee drinkers who say coffee makes them feel more like their self 54% Total percentage of coffee drinkers who have a cup within the first hour of waking up 68% Total amount of yearly money spent on specialty coffee in the U.S. 18 billion Table 1: Statistics on Coffee Drinkers Social Forces The social factors of the coffee industry are definitely a positive. Many coffee drinkers like to meet up and socialize while enjoying a cup of brew at their favorite brew house. The issue that a new coffee house usually has is pulling these people away from their favorite place; however, this new concept is going to have an advantage not offered by the “normal” place they go. So, how do we reach these people? What are we going to offer them in order to be top-of-
  • 7. Jonathan Mullins Kenneth Hudson Passionate Telfair mind to them? The advantage our coffee shop will have is the fact that the bicycling community is a close knit group of people and increasing by the years. Once we get in their eye, others will likely follow. There are plenty of cyclists in our area, and they are probably looking for aspirational groups to be a part of. Due to comradery that is amongst this social group, riders tend to be more inviting to other riders. This will be an advantage of the bike café. Demographics In the bicycle and café industry, there are different target markets but at a certain point they tend to overlap. In the café industry, according to statistics, 83% of adults aged 25-39 report drinking coffee every day ("83% of U.S. Adults Drink Coffee"). Coffee consumption is expected to increase 2.7% each year ("Coffee Shop 2012."). Daily gourmet coffee consumption was highest among 25-29 year olds at 42%. The second highest was the 40-59 age bracket. It was also the highest in consumption with Hispanic-Americans at 48% and second was Asian- Americans at 42% and third was Caucasian-Americans at 32% (http://www.vendingtimes.com). The 25-35 year old age bracket is the least likely to stock coffee at home which opens a market because that means they will be going to either a fast food place, gas station or to a specialty coffee shop to pick up their coffee every morning (http://www.experian.com/assets/simmons- research...). Also, men and women each consume 1.6 cups per day which implies that when customers participate in our café service they will be inclined to purchase the gourmet coffee and sandwiches offered. Women indicated that coffee was a good way for them to relax, while men indicated it helped them to get things done. The most coffee is sold during breakfast hours at 65% of the market; therefore the time that a coffee shop will make most of its money is during the morning (http://www.e-importz.com/coffee-statistics.ph).
  • 8. Jonathan Mullins Kenneth Hudson Passionate Telfair The bicycle industry statistics show that the average bicycle commuter is 39 years old, a male, who is a professional with household income of more than $45,000 per year and rides 10.6 months per year. Cycling participants are 58% male and 42% female. Although males are the prime customers for bicycle shops, women cyclists are starting to increase over time. 29% of cyclists are ages 16-24, 21% are ages 25-34, 23% are ages 35-44, and 27% are ages 45 and up. Among those ages, 53% of cyclists are married and 47% are unmarried. The household income of $40,000-$79,000 makes up 40% of the market (http://www.peopleforbikes.org/). The adult age group makes up 72% of the total industry at 28.5 million riders. From looking at just these statistics and comparing them to the coffee drinkers, it shows that for a bicycle/coffee shop the target age in the market are males and females between the ages of 25 and 45 (http//:brandongaille.com/ 49-bicycle-industry-statistics-and-trends/). Economic Forces The U.S. Economy as a whole is not doing as well as expected right now even though the drop in gas prices has put more money in consumers’ pockets. In January it was reported that the producer price index declined .8%, it was the third straight decline and the largest drop since November 2009.The consumer price index declined .4% and consumer goods fell .3%. The Producer Price index decline can be seen as a relation to the 2.1% decrease in the final demand goods index (http://www.bls.gov/news.release/ppi.nr0.htm). Manufacturing rose by .2% which can be good for the bicycle industry seeing that that increase is going toward producing materials and products in that industry. The gasoline index declined 9.4%; the lowest gas prices in 5 years can be the cause of these drops. Consumers spent $6.7 billion less at the pump in January than they did the past two months; it seems that the extra money didn’t get spent anywhere else. It
  • 9. Jonathan Mullins Kenneth Hudson Passionate Telfair looks like more people are using the unused cash to replenish their savings and to pay down debts already accrued (http://abcnews.go.com/Business/). In the long run saving is good for households and the economy because it allows for future spending. With this slowdown in spending right now it looks like a 2.5% slow growth is forecasted between January and March (http://www.nytimes.com/). Even though there are a lot of declines in the economy right now it can look better for downtown Montgomery with the building of loft apartments in the downtown Montgomery area, the rejuvenation of the market district including the increasing amount of workers that commute there every day, and the Oak Park and Centennial Hill plan as well. This shows a substantial potential for increased revenue for all retailers that are located in the downtown area. The new residents will most likely be in the target market that a bicycle/coffee shop will attract. A bicycle shop would provide the services for people who prefer to ride their bikes for commuting to work and performing everyday errands in the local economy. The fact that more residents will be present in this area increases the traffic and visibility for such a shop. Residents will need repairs for their bicycles as well as new bicycles to replace them. And the many workers and residents in the area will enjoy a nice sandwich and cup of coffee for lunch and even a nice place to relax after work. Right now there are approximately 21,868 office and non-office workers in downtown Montgomery alone. These workers spend $28, 267, 000.00 in expenditures per year all together and spend $15,671,300.00 of that on full and limited service restaurants and $2,266,851.00 of that on drinking places (http://www.developmontgomery.com/). These people are a great possible market for a bike café. Political and Legal Forces
  • 10. Jonathan Mullins Kenneth Hudson Passionate Telfair The political / legal forces other than the usual business license needed to operate in the industry mostly relate to political instability in local and global markets. There have not been any price controls in the global coffee trade since 1989, when the buffer-stock system broke down (http://tutor2u.net/economics/...). This causes buyers to have power over the market which can force the price that farmers receive for their product to decrease. This can create poverty and damage the chance of sustainable development for countries and regions that are economically dependent on coffee production. This could also damage the corporate social responsibility of the company. There are also legal barriers of how the beans are certified organic according to the California Organic Foods Act and the standards of the International Federation of Organic Agriculture Movements. There is now a thing called fair trade coffee where the coffee is traded by bypassing the trader and giving the producer and buyer higher profits. There are also regulations put into place by the Food and Drug Administration and the Food Modernization Act; for instance, food safety in the food portion of the business and that importers would be accountable for verifying that their foreign suppliers are implementing modern, prevention- oriented food safety practices, and achieving the same level of food safety as domestic growers and processors. These rules are believed to help the FDA prevent potentially harmful food from getting to U.S. consumers and improve the safety of the U.S. food supply. They also help to increase efficiency by reducing redundant food safety audits (http://www.ncausa.org/...). The political/legal environment in the bicycle industry can be viewed from the federal, state, and local levels. The federal and state way is through MAP-21, which is a federal long term program that gives money to states on a performance based system to improve transportation projects and programs to help states meet the requirements of the Clean Air Act.
  • 11. Jonathan Mullins Kenneth Hudson Passionate Telfair The program allows for a lump sum total instead of an individual authorization needed for each program. A portion of the funds is set aside specifically for the state’s transportation alternatives. These funds can be used to put in bike lanes, make other changes to roads and to help boost the use of alternative transportation such as bicycles to improve air quality and to reduce congestion (http://www.fhwa.dot.gov/map21/factsheets/cmaq.cfm). The City of Montgomery has included bicycles in its planning in “The Plan for Oak Park and Centennial Hill” plan adopted in December of 2011. The planning committee included a statement concerning the necessity of providing for the safe operation of bicycles in these areas. They propose safe motor vehicle speeds and reverse parking for vehicles to be able to see pedestrians and bicyclists when they exit the parking places (http://www.montgomeryal.gov/...). The Montgomery Metropolitan Organization has a publication called the 2012 Bicycle and Pedestrian Plan that includes benefits of bicycling or walking instead of driving, and what it can bring to the community as a whole. They set out many goals including to create a pedestrian and bicycle network that will nurture economic growth and competitiveness in the River Region and to ensure the mobility of all citizens. Another goal is to put together an initiative to educate citizens on bicycle and pedestrian safety. They also want to address security issues that affect the bicycle and pedestrian community and to develop a complete street policy. They also include ensuring facilities for all modes of transportation in residential, retail and commercial development, and redevelopment areas. The Montgomery Bicycle Club was a large contributor to the development of this plan. Considering the available resources, the city of Montgomery is not likely to be against a bicycle shop/establishment in the downtown area (http://www.montgomerympo.org/...). The Business License will be a necessary expense but the city planners would probably welcome
  • 12. Jonathan Mullins Kenneth Hudson Passionate Telfair any business that encourages commercial and residential traffic in the downtown area, especially one that can help put a foot forward on their bicycle and pedestrian plan. Competitive Forces In the bicycling business alone, there is an “indirect competition consists of mass retailers, such as Wal-Mart, K-Mart and ... All of these have significantly lower prices; however, the quality of their bikes is much lower… None of these large retailers have service capabilities” (Retail Bike). All major retailers that sell bicycles can marginally affect the customer flow for the company. For the bike café concept in the River region, there are no competitive forces affecting the company because the concept will be the only one available. Some bicycle shops offer coffee but nothing to the degree of a fully equipped gourmet kitchen. The addition of a café is the main reason why there would not be any threatening competition for the company. Technological Forces There are no technological forces that can affect the bike café company only if the company decides to embrace the changes of technology and utilize them in the service process. With the design of bikes becoming more technologically savvy, this new innovation can increase the flow of customers, targeting the cyclist community and tourists the most, if the company decides to offer the new products. If the company chooses not to carry the new innovative products then the new bicycle technology could be a technological force that can affect the company’s bicycle profits. Service Concept
  • 13. Jonathan Mullins Kenneth Hudson Passionate Telfair At Cafe de Sprocket, we will provide a people processing and possession process service. We offer a cafe, bicycle shop, and repair service under the same roof. We would have a people processing service from the cafe requiring customers to walk into our establishment and order food as well as eat in with friends. The bicycle shop portion of the business is also considered people processing because we offer the opportunity for customers to come in and buy a bicycle as well as ordering the bike online and picking it up at the store. No matter how the customer decides to actually buy the bicycle, they would still have to come to the establishment and obtain the product which makes the bicycle shop a people processing service as well. On the other hand, the repair shop would be possession processing because you can bring your bicycles to the store and get it fixed or painting or even altered. This unique service can attract any customer that has a bicycle whether it is for professional or leisure reasons. The Pre-Purchase Stage During the pre-purchase stage, our target customers will be inclined to research our business and learn about all of our services offered first but after visiting the facilities, they will not need to depend on our website for anything but purchasing a bicycle. When customers are searching for a café and/or a bicycle shop, they will find that our business is a very unique business that is not available in the vicinity. In the Montgomery, AL area, there are no bike café’s which makes the possibility of alternatives none existent. This fact is the main reason why our concept alone is our sustainable competitive advantage. Due to our variety of services, Café de Sprocket has many search attributes experienced by first-time customers. For the café service offered, it has a search, experience, and credence
  • 14. Jonathan Mullins Kenneth Hudson Passionate Telfair attribute due to the fact that you can sample the food but you do not know ahead of time if you will like the food or how sanitized the kitchen is. These many attributes could make the initial search difficult to evaluate. However, receiving the list of items offered in the café could give the potential customer the idea of what we serve and decide from the food items listed. This process may seem hard to some but not to all because this process is the same as searching any new restaurant that people look up before going from curiosity. On the bicycle side of the business, the search attribute involved is the main evaluative attribute. When customers are looking for a business to come to that offers bicycles, they know the bikes they are looking for so the bicycle portion of the business would not be hard to evaluate because the quality of the same bicycle will not differ among the competition. The café portion of the business will be considered the determinant attribute of the business that will attract customers to come in and purchase a bike and indulge in the delicious food being served in the café. Exposed Risk To Potential Customers There are different risks accompanied with the each service offered at Café de Sprocket. When customers are online researching our business for a bicycle, they will find that they can pay for the bicycle online and pick it up in store. This online payment option can cause a financial risk for the customer. Customer will have a concern that the business could steal their information and identity and/or the system crashes and charges the customer more than assigned or does not send in the order and risk of the business selling the specific item. This risk could cause customers not to use our online payment services and depend on face to face contact. On
  • 15. Jonathan Mullins Kenneth Hudson Passionate Telfair the other hand, the café has a sensory perceived risk. The question of concern from the customer is “Will I enjoy their culinary services?” This risk is high for first-time consumers because many people have a hard time trying out new establishments when they already have their favorites. Offering specials and samples could help lower the sensory risk of the café. Between both the café and the bicycle shop, they both obtain a functional risk of customer service. According to customers, the pictures of the facilities service offerings may look nice but it does not guarantee a spectacular customer experience. The first impression of the service is always crucial to the customer so the assurance of great customer service by reviews, word-of-mouth, and evidence management could help reduce the sensory risk of the service experience. Adequate And Desired Service Offering In our service, customers will establish adequate and desired service offerings. Customers’ adequate service offering from our establishment would be in comparison to McDonald’s. You arrive at the building and throughout the service encounter; you do not feel comfortable to be there. You feel like another number that has come in for a coffee or bike. Our target market will establish this level as their adequate service offering because they will expect the highest level of service from Café de Sprocket. If they receive adequate service, they will assume that the business is running slow that day and only accept the service only if it is on a rare occasion because adequate service goes against our mission statement and culture. Our level of service will mostly correspond with our customers desired service offering; this service offering includes being welcomed into the business. The culture of the business will permeate the air and release a positive vibe across the building and elate every customer; the delicate sweet smell of coffee will entice the customers to gravitate towards the café. Even if you are there
  • 16. Jonathan Mullins Kenneth Hudson Passionate Telfair initially for a bicycle, the smell and atmosphere of the business and café will cause them to leave with a purchase from the café on their credit cards. The employees will treat each customers will respect and belonging. We will acknowledge our regulars and build relationships with our new customers. Overall, the desired service offering at Café de Sprocket is a positive family atmosphere that never dies. Customer’s Role during the Service Encounter Stage During the service encounter stage, the customer will acknowledge the high contact service provided. Every service that is offered in Café de Sprocket requires the customers and the service provider to interact face to face. In order to eat at the café or even purchase and obtain your bicycle, the customer has to be in the establishment. The customers’ role in the service encounter is to arrive at the establishment safely, observe and select a café item or bicycle, pay for the service, and enjoy their purchase. The role of our customers is simple but effective if implemented correctly. The simplicity of the role is interconnected with the high standards of our customer service experience. This high level puts majority of the role responsibility on the business staff; they are responsible for informing the customers of the script which will then help the customer understand their role and the importance of cooperation. The Post-Encounter Stage During the post-encounter stage, customers will compare their customer experience with their desired service offering expectation. If the level experienced is lower than the customer will have a negative disconfirmation for the business and will display their negative feelings online or
  • 17. Jonathan Mullins Kenneth Hudson Passionate Telfair to other colleagues. This action can also occur when confirmation or positive conformation is recognized and there are many methods that will allow the company to collect the information. In order to select appropriate data collecting methods, we must acknowledge the increasing usage of the internet and social media for reviews of businesses. So we can monitor the reviews submitted to our website and social media to collect the overall experience of the customer and use that knowledge to enhance our business to the level we have set in our mission statement. We can also set up a schedule internet inspection of all search engines; this includes periodically setting aside a time for the marketing team to go to every search engine possible and search our business and locate every external site that has reviews of the company. We will also use this data to better enhance the service of the organization. We strive to enhance our company when there is a high demand of complaints on a specific issue because our company is customer- oriented. We understand that the customer is the business since we are a business to consumer establishment. Market strategy and Service Innovation Café de Sprocket utilizes the market focused strategy by focusing on the cycling community. We initially offer bicycles and accessories needed for their riding experience, but we also offer a café for customers to come and relax, eat a meal, and converse with fellow citizens of the cycling community. With our narrow target market and unique features we enjoy the idea of having a market focused strategy that will make us different from any possible competition. In the service marketing field, our proposed concept would be considered a major service innovation because we have added the sale of coffee and food items along with our offering and repairing of bicycles. There are businesses in the northern part of the United States that have
  • 18. Jonathan Mullins Kenneth Hudson Passionate Telfair applied the same concept but the market has not been defined in the southern area including Montgomery, AL. This addition of service is also the determinant attribute of our company. Product Characterization The products in the café and in the bike shop are primarily for consumers. I would have to place our café products in the convenience and specialty category because of the simplicity and the ease of use of the sandwiches and beverages that we offer but recognize them as specialty since they are not the run of the mill kind of sandwiches and beverages. I would place the bike shop products in the specialty or unsought after category because the bikes that we are selling are not as sought after by the region in which we are selling in. Many of our customers will be repeat customers and that is who we will be selling to more often than the newcomer. Product Fit In Product Mix Our products of coffee and gourmet sandwiches will fit in nicely with our servicescape and sense of calm and relaxation. Our bike offering will also fit in with our concept of wanting to have a place for people to come and hang out and relax by offering bikes that encourage people not only to be competitive in the bike world, but also to be a means for relaxation and adventure. Core Service Offered The core service offering in the café is gourmet sandwiches, coffees, and espressos. Everything will be prepared in the kitchen, but everything past the register will be up to the customer, such as seating and condiments, etc. The bike shops core service offerings will be full service bike maintenance and bike sales.
  • 19. Jonathan Mullins Kenneth Hudson Passionate Telfair Supplementary Services Offered Supplementary services in the café should be offered, such as possible merchandise sales, possibly the ability for customers to be able to control TV’s in the facility, also offerings such as rewards systems should be offered but for the most part everything in the café will be self-service. In the Bike shop some supplementary services will be bike sales and custom bike ordering, along with a possible rewards system where customers can earn free sandwiches, coffee, and merchandise according to the amount of money spent on service or bike purchases. Also service packages would be offered to speed up the decision making of customers who would like for their bikes to be overhauled or just regularly maintained just like at oil changing places for cars or carwashes. Service Concept For the Café, the service should be somewhat immediate and if not immediate then is should be delivered in a very timely fashion. In the bike shop the service of maintenance should be delivered as quickly as possible preferably within an hour for routine maintenance services all depending on supply of parts and other things of course. Also with the sales portion it should be easy to just roll a bike out for a person who knows what they want by on the other hand ordering
  • 20. Jonathan Mullins Kenneth Hudson Passionate Telfair specialty bikes for individuals could take some time but would like to keep it within the 1-2 week range when trying to get a bike in for a customer. Table 2: Example of Cafe de Sprocket's Service Script/ Blueprint Product Involvement The product that we are offering will be both, a high and low level product. This is mainly because we have two different products. The café will serve low involvement products like sandwiches, coffees, sodas, and a few other foods and drinks. These are low involvement items because of the urge they need to purchase. These aren’t huge items that a consumer will have to debate over whether they should buy or not. The only debate would be if we can make the customer choose our café over other restaurants and food establishments in the area. Once we get in the mind of the customer, having them purchase “food” is the easy part. On the other 1. Customer enters building 2. Employee greets customer andasks which service theyare in needof today 3. Customer responds to question 4. Employee walks customer to the correct business 5. Customer approaches counter/bicycle showcase 6. Employee greets customers andask if theyneedhelp 7. Customer orders cafe items/tests bicycle/accessories 8. Employee confims order/ tells custmer of bicycle warrranties 9. Prep staff prepares food/drinkitem 10. Employee informs customer of price 11. Customer purchasescafe/bicycle items 12. Customer retrieves purchase and exits the establishmnet satisfied
  • 21. Jonathan Mullins Kenneth Hudson Passionate Telfair hand, the bikes we are selling will be more involved. Even though we may have some lower-end bike models in the store, most of what we will carry will be high-end bikes. It is not an impulse purchase. Consumers will have to think, compare, debate, and research before spending $3,000 or $4,000 on a bicycle. Even though there is a huge market and consumers that are big into cycling will not have as much reservation with this purchase, there will still be a considerable amount of thought into the purchase. View of Company against Competitors I think our position in the minds of customers will have to be differentiated. We will not be like any other cycle shop in the area. We will offer bicycles, equipment, and other cycling accessories, but we are also a café. This is what will set us apart from the competition. Our problem will be within the restaurant and food industry. We will have to differentiate our sandwiches from all the other “food joints” around town. Our key to this will be the health benefits our foods will offer. We will not be the typical fast-food place, nor will we be a sit- down- and eat, full blown restaurant. Our niche will be that we offer a relaxing atmosphere where customers can come in and enjoy a cup of coffee, and get a healthy sandwich, while feeling like they are part of a group. Our bikes will have to be set apart from the rest as well. Even though there are other bike shops in the area, we offer a lot more than that. We need to let our service, and comradery be the “extra mile” that other shops cannot, or will not do. I believe we should employ service level in order to see the proportion of customers that are coming in. Our challenge is to bring two different groups together. We are offering services to not only the cycling community, but also to those who do not bike, but enjoy a nice cup of
  • 22. Jonathan Mullins Kenneth Hudson Passionate Telfair java, and a healthy sandwich or snack. We need to figure out how many customers of each side of our business are coming in, in order to make changes and accommodate both sides to the best of our ability. Service levels will help us figure out the involvement of both markets. Product Branding When deciding how to brand our products, we feel we need to do both individual branding and manufacturer branding. By using the big name manufacturers in cycling, we will draw in the biking market. We are certainly going to have to use the names of our vendors in order to make the cycling community aware that we are now a force in the retail market. By carrying big name brands, we can gain exposure as a reputable cycle shop. Our café will have to have its own identity. We do not want it to be branded like any other food establishment. Our main objective is to offer healthy foods, and promote a healthy lifestyle. By branding ourselves individually with the café, we have the ability to set our own identity and not have the bad imaging of any other restaurant. Even though, some of the big name branding could prove to be helpful in starting our concept, we really feel we will be fine in the long run by promoting our own idea, and healthy style. We intend to bring a new idea to the area and make people feel as though they belong to this group. Both cyclists and non-cyclists will be able to benefit from the café-bike shop. Factors That Affect Diffusion There are many factors that will affect how our products are accepted in the community. Obviously we have to be visible to the community. As a bike shop, we need to get out and participate in various rides, even those that are not in the specific area that we are in. We have a
  • 23. Jonathan Mullins Kenneth Hudson Passionate Telfair vision to have cyclists from all over the state visit our shop, especially the café. The only way to achieve this idea is to be visible in as many cycling communities as possible. We plan to use these events to bring riders to the area, whether they are stopping in when passing through, or they are visiting us to participate in one of our events. Another aspect of the bike shop visibility will be tourism. In a long-term plan, we want to be able to rent bikes to cyclists, and take tours of the River Region. With the help of the State of Alabama, we are hoping there will be laws passed to accommodate cyclists in the area. If this is done, we will definitely hold a key to inviting cyclists from all over to the River Region to participate in these various riding events and tours. Another factor to diffusion in the market will be the products we carry. Corporate promotions from the bikes we offer will play a big role in our acceptance in the community. As we increase our inventory with reputable brands, we too will grow as a reputable retailer to cyclists. On the café side, the products will have to stand out to be accepted. Our goal, as has been stated, is to promote health. Our sandwiches are going to have to stand up to this expectation. As we use these healthy sandwiches to gain market share, we have to make sure they live up to the expectations we set. We will have to make sure the food is of the highest quality available. If we can accomplish the healthy side that we set out to do, customers will talk, and hopefully this will spread. Another very important factor of visibility to us will be with the bike shop. As we have stated, we intend to be very active in the community. By putting on riding events, and participating in events that are meaningful (i.e. charities, demonstrations, etc.), we hope the visibility will affect our diffusion into the market tremendously.
  • 24. Jonathan Mullins Kenneth Hudson Passionate Telfair Service Complexity We do not expect there to be a whole lot of complexity with our plan to enter the market. Our biggest challenge, we feel, will be in the café. The idea we have is simple. We want to offer a place for cyclists to come and purchase their bikes, accessories, equipment or parts. We are going to offer service which we hope is second to none. We intend on doing this by going the extra mile, whatever it may be for each sale or service. We are also offering these cyclists somewhere to stop in, relax, and have a cup of coffee, or even grab a snack. We also plan to bring another group of people together with these cyclists. By inviting non-cyclists to the café to hang out, we hope to accomplish one thing; a healthy lifestyle. Along the way on this journey, we would love to increase the number of cyclists by showing these non-cyclists the benefits and comradery that the cycling can bring. If we convert just a small percentage of the non-cyclists to become cyclists, we have accomplished one of our goals. The idea itself is simple. The task of being successful in it will be a tough road, but one that we are certainly thinking will be very beneficial. Service Options and Relative Advantage As we have said, this will be a tough road. Not only do we have to break into the market as a cycle shop, we have to take over the food and restaurant segment of the market as well. The cycle shop will not be as big of a challenge as the café shop. Yes, we will have to become a visible retailer in a market that already has a couple of bike shops. However, we do not feel this will be our toughest part of the journey. Becoming a factor in the food industry will be more challenging. We do feel though that we have a product that, once it is noticed, will be much
  • 25. Jonathan Mullins Kenneth Hudson Passionate Telfair more acceptable than other food establishments. With the United States today being so health conscious, now is the best time to promote a healthy option for those looking for something to eat. Even though entering into the food market is almost impossible without a big name, we do feel our product differentiation is our biggest asset to accomplish this feat. Entering into the cycling retail market will be tough, we are not thinking this will be an easy road, but we just feel using our brands as our flagship, we should be able to be a factor in the market. We intend on being much more active in the River Region than the other shops have been in the past years, and if we can pull that off, we will have a leg up in the race to get the business of consumers. Our relative advantage ties directly into the previous paragraph. We are going to use our café shop as the difference between us and the rest of the bike shops in the area. With the idea of having a café for cyclists to stop in and relax during their trek, or simply just a place for average people to come and hang out, we have something that the other shops simply cannot match. Even though our bike shop will more than likely provide most of our market share when opening, we hope the trend starts to flop as time goes by. At first, we anticipate that the bike shop will bring people to the café. But, as we gain exposure, we anticipate that the café will actually bring people to the world of cycling, and yes, the bike shop. As cycling is definitely a healthy option for fitness, we plan on having the healthiest foods available in our café. We plan to use this as our staple for bring the cycling and non-cycling communities together. If we can draw attraction to the café, and use this to increase the number of cyclists in the market, the bike shop will certainly be a success. By giving cyclists and non-cyclists a place to relax and hangout, we are accommodating the chance to build networks, friendships and ultimately groups,
  • 26. Jonathan Mullins Kenneth Hudson Passionate Telfair that consumers and feel that they are a part of. We have the vision of that “country club” feeling, just without the membership fees. Overall Service Observability The services that we are going to offer are fairly visible. The café will have food that will either taste good, or it will not. It does not get much more visible than that. Hopefully, as we intend, the food will be exceptional, and will catch on immediately. As we promote healthy options, we plan to hold the integrity of the food at the highest level possible. Same goes with the coffee that we offer. We plan on having coffee and drinks that will be a better option for consumers. I would like to think that the bike shop has a fairly visible service as well. When a consumer walks in to purchase a bike, we want to make sure they get the best option available. We intend on fitting them to the bike that fits them perfectly. By providing the extra attention to each client, in order to make sure they walk out happy, and with the bike they want and need, we hope to use this as our visibility to the service. I would like to think our pricing would be another service visibility factor. Even though we do have to set prices in order to make the business profitable, we are going to do our best to make sure the customers get a great product at a very, very fair price. Service Consumer Consistency We have to make sure the products are available for a trial in order to let customers see exactly what our concept is. Even though there will likely be a large segment of the market that would walk in an try our healthy options, the fact remains that a lot of the market will not give us a second look without a name brand behind us. In order to gain these customers we are going to
  • 27. Jonathan Mullins Kenneth Hudson Passionate Telfair have to offer trials. There are many ways we could do this; we could post promotions for a free sandwich on first visit, or something similar to this on a “grand opening day”. The problem with the grand opening day would be getting the word out that we are having this event. We could advertise the day through different medians, and would probably be fairly successful. However, we need to figure out a way to get consumers in the door to try it that maybe did not make it to the grand opening. Using social media is the thing of today, so we would likely try to blast a post out with something that offered the free item in order to get a customer in the door. Yes, we would probably have some consumers that would use a coupon or this opportunity more than once, but we actually do not see that as a bad thing. Even though, yes, we would like for it to be a one-time use only, obviously if a consumer goes through the trouble to use something like this twice or so, they enjoyed the product. We have discussed the options of rewards, as well as referral programs in order to get customers in the door. One idea we have would be obviously a rewards program. Some of the popular options are like “get your 5th sandwich free”, or something similar to this. As far as referrals, we have kind of used the approach that Dish Network has used lately. In the past, a referral program was only for the person that referred a new customer. We want to do this a little different. By offering both the new customer and the referring customer a reward, we stand a better chance of increasing the number of people that will visit our café for the first time. We could easily do something like a free sandwich or drink for both of them when a referral comes through the door. With food costs as low as they are, this is an inexpensive way to increase the market share, and touch as many people as possible, without spending ourselves out of business. Another thing we plan on doing is a demo, or, riding day. This would give cyclists the opportunity to come and try
  • 28. Jonathan Mullins Kenneth Hudson Passionate Telfair out a new bike, in hopes of them purchasing a new one from us. We would need to set this up like golf companies do, as demo days. We would like to have one, or maybe two manufacturers come out with a few different options, and let people simply try them out. Another option to the demo day for bikes would be a rental option. We plan to set up a way for cyclists to rent a new model bike, and take it on a ride to see how they like it. This is a great way to show people the level of service that we plan on offering to the River Region. Target Market Summary As we looked at the make-up of our target market we were able to utilize several pieces of information. In reference to our geographic market, we are looking at locating in central Alabama. The most likely location for us will fall in the River Region, specifically Montgomery. Montgomery has a population of 201,322, and when included with the entire River Region (Elmore and Autauga Counties) we will increase our target population by another 136,148 people. The demographics in which we are trying to reach are a rather broad market. Almost everyone will ride a bike at some point in their life, and we want them to buy from us. On top of that, everyone is going to eat every day. If we can just get a fraction of the “eating” market to visit and eat at our café, we will definitely make a name for ourselves. As I stated almost everyone is going to have a bike at some point in their life. So using this at our demo for the bike side of the business, we are really going to focus on male and female person from age 6 to 65. We will take this market and segment it into smaller, more identifiable groups. Of course we will have the avid cyclists and then we will have the average cyclist that has children. Taking the avid cyclist in consideration, we are going to target both
  • 29. Jonathan Mullins Kenneth Hudson Passionate Telfair male and female persons from the age of 21 to 54 and having an average income of $60,000+. For the families with children we will target a slightly lower income level since they more than likely won’t be looking to purchase our higher end bicycle. We will target families making a household income of $50,000+. These income levels will apply to both sides of our business. Yes, we will definitely cater to the single income households in the café, and will look at much lower incomes as our ideal target, but, we do not want to be the “next $1 menu place”. We will hold our food and drinks to a high standard, and hopefully we will have a bit higher income clientele. In relation to the psychographics of our target market we will be focusing on several things that will relate to our potential customers. The target we are looking for will be the ones that make health and fitness a priority in their life. Typically these people will enjoy watching sporting events. They are usually competitive people and even compete in various sporting events. This target market enjoys recreational activities and overall enjoy being outdoors and physically active. We may attempt to target our market based on their reading habits as well. Most of our potential customers that do read, will likely read magazines like Sports Illustrated, Mountain Biking Weekly, Serious Cycling, Biking for the Family, and others like these. These psychographics apply to the café as well. The people that we are looking for to walk through our doors are the health conscious crowd. They are the ones that like to know that the food they are eating isn’t bad for them. We are not saying that less healthy conscious people are going to avoid our café; they just simply are not our “ideal” target. The behavior of the target market will be important to us as a business as well. For both the bike shop and the café we are looking for the consumers that take pride in how they feel and
  • 30. Jonathan Mullins Kenneth Hudson Passionate Telfair look on a daily basis. They are the ones that enjoy looking good just because it makes them feel better. They will work out a bit more than other people because they want to keep their body and mind in shape. This market will also shop regularly at sporting goods stores and at grocery stores that promise healthier and fresher food items. This market will often shop at high-end retailers because they want quality merchandise, and not necessarily the least expensive that they can find. They also are inclined to watch or listen to more sports and outdoors programs because of their personal interests. Potential Jaycustomers The threat of jaycustomers exists within every business and every industry. I believe Tour de Sprocket will have its fair share of jaycustomers as well. These jaycustomers could really be anyone, but the biggest threats will probably be the “click” or followers of the other bike stores in town. I do not believe they will really be irate or anything similar to that, but I do see them bashing our business verbally and diverting customers away. I feel they will use negativity about us in order to try and drive customers away from our place, and possibly into theirs. I hear the first complaint being regarded towards our café; “they don’t know bikes, they are making lattes”. This is the type of jaycustomer I believe we will have to deal with. I am sure we will have an unhappy customer at some point, and this too will turn into some form of jaycustomer. I just do not think you can simply please everyone when it comes to retail and restaurant. The other jaycustomer we may see will come from maybe lack of a product or accessory that they are looking for. I do not think this will be an obnoxious jaycustomer either, but it will be one that we will have to deal with and do our best to please. I think the last jaycustomer we will have to deal with will be in the café. Typically the people that go into
  • 31. Jonathan Mullins Kenneth Hudson Passionate Telfair coffee shops and delis aren’t going to be a real jaycustomer; when these customers have an issue, they are going to be easy to deal with and please. Target Market Information Processing The target market of Café de Sprocket will use routine, limited, and extensive information processing. Both the bike shop and the café will have a market that will initially use limited processing. At first, they will want to do a little research to see what it is we do and offer. As far at the café side goes, these customers are going to ask around and try to find out information, and what other think about our sandwiches and coffees. After we reel these customers in, they should turn into a routine processing market. We want them to not think about other places that they could get a sandwich or a latte. We want to be their “top of mind” decision. On the bike shop side, these customers are going to use limited and extensive information processing the most. For those customers that want an entry level bike, and do not want to spend a ton of money, I expect them to be the limited group. The other group, that wants a high-end bike, is going to do a lot more research to see what we offer. This target market is going to find out which manufacturers offer which features. I also expect them to shop around and do price comparisons after they figure out exactly what it is that they want. Niche Market Strategy Our company will use the niche strategy because we offer a good and service with features that appeal to a particular minority market subgroup. Our unique concept will be easily distinguished from other businesses, and it will also be produced and sold for specialized uses
  • 32. Jonathan Mullins Kenneth Hudson Passionate Telfair within its corresponding niche market. Our niche market is primarily cyclists in the community but any residents or tourists are welcomed to enjoy our business along with the cyclists. Although it may seem like a mass market, our concept will not approach the mass market. We will only appeal to people who understand of our concept. Many people may look at the business as abnormal which will deter a piece of the community but the cyclists will enjoy the concept. The cycling community is a niche market in our target region due to lack of residents who desire cycling and lack of proper road markers for cyclists in the community. Primary Benefit and Determinant Attribute The primary benefit and determinant attribute of our business are one in the same: the café. If you look at the bicycle portion of the business being our core product, the café is a secondary product that benefits the target market. In the bicycle sales industry, many businesses do not offer a café in the same vicinity. In the downtown Montgomery Alabama area, there are no businesses of this caliber which makes the additional café service a determinant attribute when researching your options. We pride ourselves in the diversity of our business and sustainability of the concept in the River region area. The café and extraordinary service are our target markets primary benefits. Pricing Strategies Our pricing objective should be a combination of revenue and profit, as well as patronage and user based. Using the revenue and profit as part of our pricing objective makes sense because, as in any business, our objective is to make a profit. If a business is not making a profit, there really is no point in the business being open, unless of course we opt to be a non-profit,
  • 33. Jonathan Mullins Kenneth Hudson Passionate Telfair which we are not. By seeking a profit, we are looking to make the largest possible profit that we can. At the same time, we are not going to do this at the expense of our customer’s integrity. Even though we want to make as much profit as we can, we will not “stick it to” our customers. Covering our costs goes hand-in-hand with making a profit. As long as we cover every cost we have, we will be able to keep the doors open. We really intend to cover every cost we incur, as well as make a profit to make the business grow and be successful. The pricing objective involving patronage and user-based relations is an essential part of our business. As we said in our business plan, we plan on building a huge following of customers and regulars. By doing this, we will increase the number of repeat customers that we have. This is an important part of any business as well. Repeat customers are the ones that can refer new customer and speak positively about Café de Sprocket. These repeat customers will help us build the demand we want to see in both sides of our business. If we can successfully do this, we will successfully build a great customer base at the same time. This is a huge asset to the café side of the business. This is what we explained that we wanted to see in our business plan. By having a customer base that comes into the café and hangs out or grabs a coffee, we will build a spot where people can feel like they are part of a group. This also goes along with the nonmonetary costs that customers will incur. Our hopes are that they will spend time in our café, lots of time! As far as the bike side goes, we are hoping for the same thing. As we have talked about, we want to participate in bike rides, and be a part of some type of touring program. If we are going to be successful in this, it’s going to take the commitment of our customers to participate in these rides. This too will take time out of their day and/or weekend.
  • 34. Jonathan Mullins Kenneth Hudson Passionate Telfair Promotional Mix and Advertising The company should use a good mix of advertising, sales promotion and personal selling to get the word out about the new business and to effectively promote the different products/services that the company will be providing. The company should use institutional advertising at first to basically get their name out and to inform the public about its advocacies and participations in helping the community to be healthier and to provide an atmosphere for a quick good sandwich or a delightful coffee. They should also in the long run use both, product and institutional advertising, product advertising they can use to promote sales on specific products or even just to get the brand of the café/bike shop out there as a unique experience in and of itself. Product Communication Our company will inform and remind within ethical reasoning to get their target market in the doors. Otherwise the market most likely will never hear about it and also, the more that is known, then more business traffic will follow. Café de Sprocket will inform the target market, meaning we will do everything we can to give out information on social, health, and other benefits of the products and services that we can provide. Doing these things can develop initial demand for the services and goods. We can also use information to pull in customers who might just be curious or are looking for something new. Our company also needs to remind the target market about the things they offer periodically, especially if they start seeing a decrease in regulars and also to pull new customers in to the target market. I do not think that persuasion is
  • 35. Jonathan Mullins Kenneth Hudson Passionate Telfair needed yet since the market is so small already and there is not enough competitors close enough to compete with our overall concept. Product Intangibility We can overcome product intangibility by creating a strong image and brand recognition; this will reduce the potential level perceived by possible customers. This strong image and brand recognition comes from informing and reminding the target market and jaycustomers about our products and services. This also comes back to how important service delivery is; service delivery can be the one thing that keeps people coming back for more. The better trained the staff is, the better the service will be. To overcome intangibility we have to make sure that the service provided by our employees to our customers is equally as good, if not better than the food, coffee, or bike sales that we provide. Promotion Communication We need to communicate the benefits of bike riding, not just health benefits but also the social and networking potential of the community. They also need to communicate how much of a value the café offers and how it is a better and healthier option for lunch to the downtown and surrounding communities. We will communicate this information through local advertising and through many forms of electronic and physical advertising, Facebook, billboards, TV, word of mouth. Aggressive advertising will bring the numbers out and the more people that hear about it and enjoy it and realize the benefits and the enjoyment of the atmosphere then the more returning customers they will have. They could also come up with promotions on coffee or test rides or anything of the sort.
  • 36. Jonathan Mullins Kenneth Hudson Passionate Telfair Media Vehicles and Scheduling The media schedule that is appropriate for Café de Sprocket is going to be classified as “multiple”. In this day and age, I feel our first media vehicle will be through social media. However, we are going to have to find a digital media company that specializes in impressions and touching a specific target market. Social media such as Facebook, Twitter, and Instagram are great, but there are many ways to touch our market in a more effective manner. I am not saying we will not use these, but there are many other methods of digital media that we need to utilize. I believe we need to also utilize outdoor, or billboards. The strategic way to use these is at major intersections of the interstate. We will not use these a lot as we do not feel they are “most” effective, but when used strategically, they are effective. We will also use radio in certain situations in order to promote events or specials that we participate in. Radio is a great median that can touch a great deal of people as well when used correctly. Television is another media vehicle that we will use, however we will use it less than radio. Television has died out a little due to the emergence of DVR systems. The only time we will use television will be during sporting events, or other similar shows in which views will not want to watch at a later point. The times that we will not use television will be during sitcoms, reality shows, and other shows that views tend to DVR and watch at a later point, or use Netflix to watch the program. The way in which we use these media vehicles will vary. Of course we will use a seasonal schedule for the bike shop. We will advertise at various points throughout the year, but there will be definitely an emphasis on the warmer riding weather. We do realize that many cyclists ride during the entire year, but I do not feel there are enough to warrant a continuous schedule. There will be points during the cold weather season that we will advertise, such as
  • 37. Jonathan Mullins Kenneth Hudson Passionate Telfair Christmas, but we just do not feel there is enough revenue during the non-peak times to justify advertising. Along with seasonal advertising, we will use a pulsing method, during the peak times of the year that we are advertising in. By using the pulsing method during these times, we are able to continuously keep our name out there and have people hearing about us, but we will definitely increase the frequency during certain times of the year. For the café side of the business, we will most likely use the continuous schedule. With it focusing on the restaurant, we need to push that to people all year. The café is not like the bike shop, people eat year round, and they certainly drink coffee nearly every single day. There will be times that we run promotions or specials in which we pulse the schedule, but as a whole we will be running the ads continuously. Loyalty Bonds Since we pride ourselves on customer service, we know we have to have loyalty bond methods in place to help customer retention. In the business’s entirety, we will implement a social bond. We want to get to know our customers by name so they feel at home. Whenever a customer comes in the door, we want to make them feel comfortable so knowing their name and engaging in a conversation is important to developing a strong social bond. This method will take time to achieve but we have faith that we will select employees that are receptive to our customer service standards and make the process easy. Along with the social bonds, we will also have financial rewards. In our marketing objectives, we made a goal to establish 70% of all customers to the Café Reward program. In this reward program, we will offer our members birthday promotions and general discounts. Customers will be able to use their reward cards like Walgreens; every visit you will be asked for your card and so many visits will award with a
  • 38. Jonathan Mullins Kenneth Hudson Passionate Telfair reward that can be used as a financial value. This incentive will also encourage customers to join the reward program which in turn will help us achieve our 70% membership goal. We will also offer discounts to all customers that can be used through a selected timeframe which will give the customer a financial reward and encourage them to buy more products. We know that discounts gives customers the idea that they are saving money they have budgeted to spend so they tend to either save the money or purchase more items. We believe that we can develop a strong customer relationship through our outstanding customer service, social bonds, and financial rewards. Consumer Promotions and Guarantees We will use consumer sales promotion to attract new customers and grow your customer base. We know that in order for residents to come to our business we must have promotions that will attract them and keep them. For instance, we will offer free samples and free trial; this approach limits the risk to customers when giving your product a try. Other promotion strategies that help promote the business are coupons, percent-off discounts, buy one get one free deals, etc. We will use these methods to help generate cash flow and profits as well as establish a good reputation among the community. To lower the risk of enduring the service, we will have guarantees in place. We will offer a combined guarantee for the entire business. In accordance with the book, we will guarantee to deliver the café items and bicycles at a reasonable time, to high quality standards, and to the degree stated in our mission statement. Should we fail to deliver according to this guarantee, or should you be dissatisfied with any aspect of the service provided, the consumer can deduct any amount from the final payment which deemed as fair. We decided to use this guarantee because it displays the confidence in the service and product
  • 39. Jonathan Mullins Kenneth Hudson Passionate Telfair quality that we possess. We know that our products and service will not be dissatisfaction to a number of consumers that could make the guarantee a costly method. We are sure that any complaints made will not be over 5% of the foot traffic and online customers combined.
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