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HTM 2121 TOURISM AND HOSPITALITY MARKETING
GROUP PROEJCT Project Title :F & B Operation in Tsui Sha Tsui East
Names: LAM KA YEE, Iris, 11225906D LEE CHO YIN, Kristy, 11025186D LEE KA YU, Jason, 11370913D KWOK WING TUNG, Kylie, 11205003D
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Project flowSections
Executive summary
External environmental analysis and
opportunities & threats
Objectives
Target market
Marketing mix strategies and programs
Implementation milestone
Marketing budget
Marketing controls
Reference2
Name and Logo
GreenLife:Environment and life cannot be separated
Logo:Orange - cooperate with Fair TradeBrown (words) - coffeeGreen (leaf) - organic products
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Mission
High quality of Food & beverages & customer services
Promote organic and fair trade‘s concepts and products
Break-even
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External Environmentmacro-environment
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Demographic trends
Opportunities:•Healthy eating trend
Organic product attract customers
•Price sensitive customers
Generally not brand loyal when a discount is offered
Threats:•Growing trend of Cafe culture
Customers knowledge about coffee products↑
High quality products6
Economic trends
Opportunities:Fair Trade products ensure steady and reliable supply
Threats:Non Fair Trade farmers being exploited→ started to leave the industry
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Ecological trends
Opportunities:Fair Trade products
promote equity, sustainable development and organic farming etc.
Gaining environmentalist support
Promoting some values
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TECHNOLOGICAL TRENDS
• Opportunities Marketing planning and mixes more focused on
Internet Nowadays, global internet users >20 billion Global use of mobile devices to access internet ↑ accounted for total internet users : 4.3% in January 2011
8.5% in January 2012
Customers : obtain products and services information online,
shopping online
↑ Distribution channel ↑ Promotion channel 9
Suppliers and distributors : (1) provide online service (e.g. homepage which contains product and services’
categories with order and delivery services)
(2) ↑ focused on Internet promotion (e.g. Facebook page and Apps )
F&B operation computerized system : ( e.g. POS system and Management system run the
operation and keep records such as inventory.)
↑systematic , ↑effective ,↑efficiency
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POLITICAL-LEGAL
According to the Public Health and Municipal Services Ordinance (Cap. 132) and other relevant legislation
F&B operation : apply corresponding licenses match numbers of requirements
Two licenses for our operation(1)Restaurant licence (from FEHD) sell any kind of food for consumption on the premises
2) Liquor licence (from Liquor Licensing Board)
Sell any kinds of Liquor on the premises
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POLITICAL-LEGAL
Requirementsfire-fighting equipment (from HK Fire Services Department)ensure the health and hygiene conditions (form FEHD)ensure buildings safety (from Buildings Department)
Certified no unauthorized building + compliance with Government lease conditions (from The Land Registry)
Statutory Plan Restrictions (from Town Planning Board)
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THREATSCosts ↑ Application fee and annual fee of the licenses : Our store : 100-150 sq.m $3140 (annual fee ) maintenance costs match the reqirements
Time costs : obtain the licences from FEHD
provisional food business licence maintain these standards for 6 months full
licence
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Social cultural trends• Opportunities E-commerce Use of smartphone &WIFI-service↑(According to PayPal, more than 8,000 mobile payments were
processed on average per day in Hong Kong in 2011 & 106 million active PayPal users in 190 markets worldwide buy products from thousands of Hong Kong-based PayPal merchants)
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Social cultural trends• OpportunitiesCoffee and tea culture strong in Asia(According to the Synovate survey, among the 501 respondents, about one
third of residents now purchase ready-to-drink coffee from outside)
(coffee is imported from 50 different countries world while in China)
Tea culture customs of China
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Social cultural factorOpportunities Healthy eatingSales ↑ in the past few decades
The choice expands to over 2000 items(Park N’ Shop and Wellcome & CitySuper, and Jusco, have set up separate
organic food sections or allocated retail space to organic products)
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External Environmentmicro-environment
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COMPETITORS ANALYSIS
Current Competitors :Coffee shops and café in TST East
46 coffee shops : 13 large chain stores 33 non-chain stores
13 large chain stores : 9 Starbucks 3 Pacific Coffee 1 Mc Cafe
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MAJOR COMPETITOR
Starbucks Products : beverages (various kinds with hot and iced) Fresh food & Snacks (e.g. breakfast, lunch,
tea, salads and cakes)
Services: Computer with web cam Free Wi-fi services Sofas and chairs with magazines and
newspapers 19
SERVICE Relaxing environment with soft music
Official website and facebook page interact with customers
(obtain the latest information ,history of starbucks )
Online registration system member receive special promotion
Delivery services (a minimum of HK$300 per order ,except 12 noon -2pm) 20
COMPETITOR’S PRICE RANGE
Price range ( different categories) Breakfast $8-22 Lunch $19-38 Snacks and Salad $8-38
Beverages (3 different sizes in order) Tall $22 Grande $34 Venti $42 Overall price range :$8-42
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A STARBUCKS’ STORE IN TST EAST
Location Located at : Avenue of Stars ,Tsim Sha Tsui
Promenade ✔facing victoria habour ✔having trees and flowers nearby ✔footpaths in front of the shop no cars ✔sunlight and sea breeze
Environment : ✔ relaxing , peaceful and comfortable
✔ fresh air 22
STARBUCK’S PROMOTION
Promotion ✔ Press releases ✔ Internet : Official website ,Facebook,Email
Close to the market trends and nowadays’ technology
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SWOT ANALYSIS
StarbucksStrengthens & Opportunities world’s brand name company Highest percentage of share of mind High percentage of market share Positive Image : ✔ social responsibilities enormous amount of capital ↑products and
services’ quality high bargaining powers among suppliers and
customers ↑ selling price ↑revenue 24
SWOT ANALYSIS
Weaknesses & threats (1) Certain extent of over-expansion (9 stores in Tst East may weaken its
own turnovers)
(2)Only focus on western food (lack of variety)
People don’t like western food culture ✕ consume
E.g. many elder in HK will go tea restaurant rather than Starbucks 25
MAJOR COMPETITOR26
MC CafeProductsBeverage (Espresso, hot and iced drinks)Frappes and extras
ServicesFree WiFi serviceSofa and chairsOfficial website and facebook page interact with customers
MAJOR COMPETITOR27
MC CafePrice rangesThe overall price ranges are between $8 and $26.LocationMost of the stores are located at the ground floor convenient
PromotionCoupons or punch cardsSlogansAdvertisementsAppsNewspaper
SWOT ANALYSIS 28
MC CafeStrengths and opportunities:
A mid-range quality substituteMcDonald’s reputationA large amount of capital
SWOT analysis 29
MC CafeWeaknesses and threats
Products are lack of varietyThe place is smallAre not operate independently
Supplier
OpportunitiesCooperation with Fair Tradeprovide organic food (According to a recent statistics accounts for 1 to 2% of total food sales
worldwide)
Abundant suppliers of certain foods↑ chance to find out the lowest possible food
cost (420manufacturers supplying sauce and seasoning)
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Threats Some food fewer food suppliesMeat dominated by big supplier(Spaghetti only22and15 manufacturers in Hong Kong)
bargaining power ↓ relatively
Supplier
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Marketing intermediariesOpportunities:Newspaper and magazinese.g. Daily Economics, Times and Asia Finance Direct mail houseMail an advertisement to business firms in Tsim Sha Tsui East (by café’s staff)(match with the target group of customers)
Threats:•Increase costs 32
PublicsOpportunitiesSupport from citizen-action publics
Environmental groups may be attracted by our fair trade products
(For example, the Environmental Working Group which recommending consumers should look for organically produced products so as to lead a healthy life be attracted to our business)
Support from media groups
Environmental groups may be attracted by our concept of healthy eating habits
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Target market
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Target customers Business people
Tsim Sha Tsui is one of the Central Business District
Younger age groupsMajority of buyers in Hong Kong of Western foods tend to be females, who do more food shopping than males, with younger age groups
Middle class income groupDemand for high-value food and beverage is mainly among the 2.3 million middle class consumers
Behavior: Business customers are willing to pay in purchasingprice is not the main factor to decide purchasing
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Marketing mix strategies and programs
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Marketing Strategies
Products and services:customer-oriented, psychographic segmentation
Pricing: market skimming Cost-based pricing à breakeven pricing
Price-adjustment strategies : segment pricing, psychological pricing
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Four marketing mixes
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1. Products& Services
2. Price
3. Place
4. Promotion39
PRODUCTS & SERVICES
• Food• Beverages• Customer service
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PRODUCTS- FOOD
(1)Spaghetti and rice (main dishes) (Salmon, meat sauce, bacon & mushroom
and vegetable)
(2)Snacks chicken wings Sandwiches (egg, cheese, tuna, tomato for mix and
match) fruit salad (fresh organic vegetables and fruit)
(3)Cakes (blueberry cheesecake, chocolate cheese cake and cup
cakes) 41
EXPLANATION OF FOOD PRODUCTS
✔From light main dishes Not only for tea time ✔breakfast , lunch ,dinner (normal meal)
✔healthy and fresh ( use organic products) good refreshment for business people Tailor-made for business people
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PRODUCTS- BEVERAGES(1)CoffeeCappuccino, Mocha, Latte and Espresso(most of the coffee beans organic and fair trade products)
(2)Alcoholic drinks Red wine (e.g. Chateau des Leotins 2008 ) White wine (e.g. Trebbiano d'Abruzzo Badia Frasca,D.O.C. 1998 ) Champagne (e.g. (A.O.C.) Brut, Pascal Fleury )
(3) Non-alcoholic drinks Milk, chocolate, milk tea and lemon tea in terms of hot and iced.
Special drinks : Tea (both British tea and Chinese tea) Fresh fruit juice (apple ,orange & pineapple) Fruit punch
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EXPLANATION OF BEVERAGES PRODUCTS
✔ variety of beverages different people’s taste
Refresh help to think & brainstorm ideas ↑
Unique beverages among coffee shop and café
★ Alcoholic drinks Various kinds (red, white wine and
champagne) Red wine for meetings champagne for celebrations
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SERVICES
Customer service: provision of service to customer before,
during and after a purchase
(1) First stage (before purchasing) Customer can make reservation ( through
reservation system online or by phone call)
Research information (through company’s homepage ,Facebook page ,email , phone call & Fax) 45
SERVICE(2) Consumption phase Core product : Food and beverages
Facilitating products : customer services- taking order of food , handling guests’ requires
Augmented products : (atmosphere) (target customer’s needs)quiet and relaxing environment Tables, computers, projector, stationery, free wi-fiVIP room (private area)✔ conference table designated for meetings
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SERVICE
(3) Detachment phaseask for feedback satisfied or not
✔ service recovery chance create satisfaction to unsatisfied guestscreate a guests profile (visited ≧5 times)Records find out preference and spending patternsKeep paid bottle wine for next visit Quality of service ↑
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Price
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Pricing approach
Break-even pricing!!
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Reasons for choosing break-even pricing
1. Predicting the change of sales when price changes
1. Preventing losses
1. When the business starts generating a positive return
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Price listHere are the tables showing the fixed costs (Table 1) , variable costs (Table 2)and food costs(Table 3).
Items Cost(HKD)
2.Decoration 8333
4.Kitchen equipment 1666
6.Salaries 2500
Totals 96093 Table1
Table2
Items Cost(HKD)
1.Gas 2,000
2.Water 1,500
3.Electricity 3,000
4.Others 750
Totals 7,250
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Items Selling price (HKD)
Unit demand needed to break-even
Expected unit demand at a given price
Total revenue Total costs Profit
1.Cappuccino(hot:350ml, cold:500ml) 45 480 750 33,750 27,110 6,640
2.Expresso(hot:350ml, cold:500ml) 42 546 450 18,900 21,110 -2,210
3.Mocha(hot:350ml, cold:500ml) 45 480 460 20,700 21,310 -610
4.Latte(hot:350ml, cold:500ml) 45 480 485 21,825 21,810 15
5.Wine
a) BORDEAUX , A.O.C., Chateau des
Leotins 2008 (750 ml)
b) Cardeal Reserva, DAO,
D.O.C. 1983 ( 750 ml)
c)Trebbiano d'Abruzzo, Badia Frasca,
D.O.C. 1998(750 ml)
d) PETIT CHABLIS A.O.C. (Chardonnay),
Domaine Millet 2007 (750ml)\
e) CHAMPAGNE Brut, Charles Leprince,
Chateau Leprince (half-bottle), A.O.C.
f) CHAMPAGNE (A.O.C.) Brut, Pascal
Fleury
a)130
b)370
c)114
d)170
e)200
f)340
a)109
b)34
c)105
d)80
e)60
f)37
a)40
b)19
c)49
d)32
e)23
f)20
a)5,200
b)7,030
c)5,586
d)5,440
e)4,600
f)6,800
a)12,910
b)12,490
c)13,090
d)12,750
e)12,570
f)12,510
a)-7,710
b)-5,460
c)-7,504
d)-7,310
e)-7,971
f)-5,710
6.Non-alcoholic drinks(hot:250ml, cold:500ml)
35 800 810 28,350 28,310 40
Table3- Beverages
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7.Spaghetti/rice-Salmon
69 245 450 31,050 21,110 9,940
8.Sandwich 40 600 350 14,000 19,110 -5,110
9.Cake
a) blueberry cheese
cake and chocolate
cheese cake
b)Cup cake
a)35
b)38
a)800
b)672
a)980
b)510
a)34,300
b)19,380
a)31,710
b)22,310
a)2,590
b)-2,930
10.Fruit salad 45 484 540 24,300 22,910 1,390
11.ChickenWings(6 pieces)
40 600 700 28,000 26,110 1,890
Table3- food and snack
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Pricing strategy
Market skimmin
g!!!
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Pricing strategy-Market skimming
Reasons for choosing:1. Target customers are price insensitive towards
our products(According to Journal of Business Research, business customers are willing to
spend large amounts of money in their purchase of goods and services, while keeping loyal business customers can give greater revenue for a supplier or a service provider)
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Pricing strategy-Market skimming
Reasons for choosing:2. a high quality image of GreenLife can
be created by charging a higher initial price
first cafe selling organic products in TST East
high chancegrabbing the early adopters
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Place
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PlaceShop 44B, G/F, Harbour Crystal Center,
100 Granville Road, Tsim Sha Tsui East in Kowloon
Near to the Hung Hom and Tsim Sha Tsui MTR Station
Ground floor High accessibility and convenient
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Distribution channel : Internet
Create website and facebook Upload Coupon76.4% of all households in Hong Kong have
PC at home and able to access the Internet (according to Thematic Household Survey Report - Report No. 48)
Facebook is the most influential social networking site in Hong Kong
Hong Kong users have has grown to 3,700,320 users3,700,320 users
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Promotion
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PromotionPromotion policy and advertising
• Promotion cards on tables• Large poster on the window of café
Public relations and sales promotion• Products tasting event• Membership scheme• Different festivals promotions• Issue online coupon• Design an app• Giving sample
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Products tasting eventKnowing which products can be main or are
most popular productsHeld periodically3 to 5 new products or improved products
to be tested
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A membership schemeEstablish good relationship with
customers gain support and loyalty
Invite them to join eventsgiving them discount and sample, and using special
equipment in café without extra charge
A-one-year membershipspending $400 or above at once or spending $800
within 2 months
Permanent membermeet other standards to get the membership card
i.e. purchase the coupons or to spend more
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Different festivals promotionsChristmasNew Year (31st Dec – 1st Jan)Valentine’s Day
build relationships with customers
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Issuing online coupon• Cooperate with online restaurant guide websites
Open rice Facebook
Customers • Rate GreenLife
• Download the coupons of GreenLife issued
• always catch up with GreenLife
GreenLife • Easy to know the comments of GreenLife
• Improve our products and services
• Promote GreenLife
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Design an appTrend of using smart phonesDesign app for download
make reservationsbook the facilities (Projector)download the code of coupon and use it in
GreenLife, members can have a special chat room or corner
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Giving sampleLet others know GreenLife will be
launched soonHow good our products are or our
products do match with their taste
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Marketing budget
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Marketing budget- projected sales
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The time period of the sales projection is one year and the figures are presented in a monthly basis.
We need to have three hundred and thirty-nine thousand dollars in order to open a cafe in our chosen destination
After half year of operation, we can cover our cost.Months Expected
revenue
Expected cost
January 309,210 339,230
February 315,394 342,622
March 321,702 346,048
April 328,136 346,013
May 341,391 342,553
June 348,218 339,128
July 351,700 335,737
August 355,217 332,380
September 358,769 329,057
October 362,357 325,767
November 365,980 322,510
December 373,300 328,960
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Marketing budget- marketing expense
Including fixed costs, variable costs which include the promotional expense and food costs
Fixed costs$96,093 per month, Variable costs$7,225 per month which includes $9,000/12 = $900 average monthly promotional fees. Here is the list about the details of our promotional fees.
All food costs are $235,887 in the first month. As we have eight types of products and thus the food costs for each type product is $982 every day.
Name of promotional
programs
Date Budget
Pre-promotion Mid May – June $2500
Opening ceremony 1st June $3000
Member recruiting - $200
Product tasting event Mid Nov. $800
Printing cost - $500
Decoration fee Christmas, New Year
and Valentine’s date
$2000
Total - $9000
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Marketing control
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Program
name
Person
responsibl
e
Date Budg
et
Explanation Budget
1.Sales
evaluati
on
Accounta
nt and
Manager
s
Monthl
yN/A • Find out
whether the
actual
sales=the
expected sales
target
• Adjusting the
strategies to
↑the sales
revenue
Expected revenue:
Jan-June: ↑2% monthly
Jul-Nov: ↑1% per
month
Dec: ↑2%.
Expected cost:
Jan-Mar controlling
cost: ↑ 1% Apr-Nov
cutting cost by1%
Dec controlling
cost: ↑2%
Marketing control
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Marketing control
Progra
m name
Person
responsi
ble
Date Budg
et
Explanation Budget
2.Progr
ess
check
All Quarte
rlyN/A To evaluate how
the business
goes meet the
objectives
i.e. break even
and customer
retention the
price-adjustment
strategies
Expected Revenue:
1) First quarter : evaluate
whether the revenue and
cost of these 3
months=monthly target.
2) Second quarter: three
months revenue7%,
cost-2%
3) Third quarter: three
months, revenue4%,
cost-2%
Fourth quarter: three
months revenue3%,
cost6%
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Progra
m name
Person
responsi
ble
Dat
e
Budg
et
Explanation Budget
3.Annua
l
evaluati
on
All 31st
May
N/A To evaluate how
the business
goes meet the objectives
i.e. break even
and customer
retention the price-adjustment strategies
Expected revenue:
$4,131,374
Expected Cost:
$4,030,005
Earn $101,369 at
the end of a year
Marketing control
74
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