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“CHOCOLATE LOUNGE”

Marketing 210 project


Presented to : Micheal Kfoury
On January 8, 2007

By : Patricia Bakalian
Rami Chahine
Marc Maalouf
Hiba Razzouk

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Table of contents :
I.Executive summary

II.Current marketing situation :


1)market description & market segmentation
3)concerning sales volume

III.Product review:
1)introduction to our product
2)mission statement
3)Environmental mission statement
4)positioning of our product in the market

IV.Review of competition:

V.Distribution Channels
1) Supplier to company
2)Company to customer

VI.Threats and opportunities: SWOT analysis

VII.Objectives and issues :


How to become effective market leaders

VIII.Marketing strategy : Produce an effective marketing mix


1)Product
2)Place
3)Promotion
4)Price

IX.Action programs :

X.Budgets :

XI.Controls

XII.Final thought :

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I. Executive summary:

In Lebanon, the service industry is highly saturated with restaurants, cafes, pubs, and

nightclubs. In order to enter such a market, you need to introduce a new idea. With

“Chocolate Lounge”, it is exactly what we intend to do. “Chocolate lounge” brings with a

new concept and idea, in which it’s general idea is CHOCOLATE and mainly all its products

are chocolate based. Our lounge will have a transforming nature between the day and the

night. In the day it is mainly a café and a restaurant, where our customers would have

breakfast or lunch, and also study or conduct business meeting in a calm atmosphere.

However, during the night, our lounge radically transforms into one of the hippest pubs in

town, where the best music is played and the most exquisite drinks are served. What we serve

and our general idea is mainly enjoyed by people seeking a place to study or a classy and

lively pub; such people are mainly categorized as students and working adults in their 20s

30s and 40s. With our “more for more” strategy, we limit our atmosphere to high class. We

offer “more” products, better quality, and an innovative, new idea, for prices maximally

getting to an expensive 50,000 L.L a couple, yet fully compensated for with our services. We

recognize our competitors fully, and understand their strengths and the threats they pose on

us, and consequently we developed a well understood SWOT analysis that helps us in turn

recognize our own strengths, weaknesses, opportunities and threats.

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II. Current marketing situation:
1) market description & market segmentation

The Lebanese services market that we are entering is characterized by high qualities

standards of life, highly educated labor force and high saturation. This dense market is full of

local restaurants and cafes that shape the Lebanese social culture, as well as of the international

investors that find in the Lebanese market an appealing atmosphere. However, “chocolate

lounge” is unique in its various aspects of specializations, a new idea and concept. Our target

market consists of various age groups ranging from students to young professionals. But with our

lounge’s changing nature, our customers also change between the day and night. During the day,

our lounge welcomes mainly students and customers who are seeking a place to just relax and

have an exquisite and exceptional chocolate snack in a soothing setting. During the night, with

the lounge turning into a high profile pub, our customers are adults (above 21 years old ) who are

seeking a place to enjoy good music with distinctive drinks in an “à la mode” ambiance. Their

social class ranges from middle class to upper class. Our customers will be discovering a new

and unique experience amongst the traditional concepts that exist on the Lebanese soil.

Customer needs are the core of our philosophy in which every employee makes sure that they are

taken care of. We ensure that every customer, regardless of their spending power, is satisfied with

their choice that is highly considered. Our main goal is to achieve a healthy relationship with the

customers. The political situation in Lebanon is likely to affect our sales for we already are

suffering from the economic dilemma in the country. We conduct business according to a very

specific mission statement that consists of 5 commandments and also respect our environmental

mission statement that consists of 4 commandments.

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Our product is not just an ordinary one but rather an inimitable one which positions chocolate

lounge as a niche in the market.

Our lounge can serve 150 seated comfortably customer , so we are estimating to receive every

day around 300 customers during our first year of our operations. Our target customers are quite

numerous , there are thousands of university students in Hamra , as well as working adults ( in

their 30’s and 40’s ) in the same area.

2) Concerning Sales volume :

Because we are entering a market with fierce competition, we shouldn’t be expecting big

profits during the first year because “Chocolate Lounge” needs time to build his loyal customer

base . With time its sales will increase if all principles will be met. We are expecting sales of

2000$ /day during the first year . Some might think that 2000$ of sales /day are quite large , well

not really , after conducting market research and asking professionals in this field , we found that

this is a really reasonable number to expect if the product is high in quality.

The next year of operations will surely be more flourishing for “chocolate lounge”, sales are

expected to increase to 4000$/day , it’s in this year that profits start to appear in the books of

“chocolate lounge”. This is of course only an estimate.

III. Product review:

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1) Introduction to the product :

Throughout history, chocolate has always had the connotation of being joyful,

comforting and special as a symbol of diverse human emotions and has always been a part of

our lives .Chocolate is prestigious, romantic, nostalgic, sexy, and an object of fantasy and

addiction for children and grownup “children”. Nowadays the sale of chocolate is being made in

a way that contradicts its warm, joyful and sensual character. Today we are going to unleash

chocolate from its cage. We introduced a new chocolate culture concept and a chocolate bar

experience in the Lebanese market that incorporates each aspect of chocolate in our everyday

hectic life. “Chocolate lounge” is a lounge that turns into a pub during the night allowing

customers to enjoy a unique experience of exquisite chocolate gourmet products. Our lounge

exposes people to a wide range of chocolate products: hot drinks , alcoholic drinks, desserts ,

sandwiches and bites.

During the day “chocolate lounge” is a place to turn free time into quality time ,during the

night a pub that creates a comforting and chilling ambiance.

2) Mission statement :

“Chocolate lounge” mission statement : “Establish “chocolate lounge” as the premier purveyor

of the finest chocolate to customers ,the best store and lounge in Lebanon and ensure a

continuous strive towards perfection and precision in excellent quality .”

1- Create exclusive chocolate based products that each one will eventually become a

representation, a symbol in people’s minds of our company .

2- Our purpose is to integrate chocolate in our customers’ everyday life

3- Establish an addictive product that would make our customers always come back for more of

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our exclusive atmosphere and product.

4- Be known for our unique customer relationships and make them our priority in our work.

5- Ensure an appropriate atmosphere for each specific time of day (a chill-out café during the

day, and a hip pub during the night)

3)Environmental mission statement:

“ “Chocolate lounge” is committed to an environmental role in all facets of our operations”

This mission will be fulfilled by accomplishing these steps:

1- Guarantee a clean and healthy environment at the workplace following the highest level

of hygiene.

2- Try to use in our operations environmental friendly products (recyclable papers , cups …)

3- Encourage partners to participate in environmental activities, share our mission

4- Ensure to maintain good social and environmental responsibility.

4) Positioning in the market:

Positioning is how the company is seen through the eyes of its consumers by emphasizing

on our beneficial differences in our customers minds. The position of the product is the set of

impressions, feelings, and perceptions that customers have for the product.

Through a new concept, we offer “more” benefits with a price exceeding our competitors’

because the products we will be offering will be unique in the market.

We are adopting “more for the more “strategy so we can attack our competitors’ position, and

attract highly classed Lebanese customers who like similar highly priced pubs/restaurants . Our

aim is to give our served customers the greatest value for an appropriate price.

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Our positioning statement: To college students, working people, groups of friends,

“Chocolate Lounge” is the lounge and pub where you can turn your free time into quality time

while enjoying your favorite and finest chocolate products. “Chocolate Lounge” is the first of

its kind in Lebanon, a shop during the day and a pub in the night; it is the place to be all day

long.

IV. Review of competition:

Because the market is saturated with likes of our café we find ourselves facing many

competitors that also bring a special concept into the market. Our competitors are all cafés ,

pubs and lounges in the area surrounding our store : Tamaris , Dunkin Donuts , Starbucks ,

Lina’s sandwiches , toffee coffee , Casper & Gambini’s … in the cafés and restaurants business ,

and many other pubs that are located in Beirut (Gemmayze , Monot street … ) in the nightlife

business .

Starbucks

Starbucks is an American coffee shop that went worldwide .Its success is due to what

they call as the Starbucks experience. They have more than five branches in Lebanon. Three that

may affect our business: Hamra, ABC Achrafieh and Rawcheh.

Starbucks is known for his coffee blends its wide variety of beverages (hot and cold: cappuccino,

frappuccino, espresso…). As for its prices, Starbucks offer high quality products at high prices

( Hot Chocolate with whipped cream at 6000L.L ). Starbucks is known worldwide and its name

consists a main attraction for customers, so as for promoting their products and stores in

Lebanon, not much work is locally required because its international fame.

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Dunkin donuts:

Dunkin Donuts is a worldwide chain offering beverages, donuts and other baked goods.

Dunkin Donuts has many branches in Lebanon; Bliss’s branch is our main threat, in which it

attracts most of AUB’s students who form an important part of our target customers. Dunkin

Donuts uses a “less for the same strategy”. It offers a good quality of coffee for cheap prices. As

for promoting itself, Dunkin Donuts relies on significant advertising; in addition to its

advertising campaigns that Dunkin Donuts launches each year, it also sets professional

competitions allowing customers to contribute to Dunkin Donuts image, as well as its healthy

environment.

Toffee Coffee:

Toffee coffee is a coffee shop that serves university students (mainly LAU). It is located

in Koraytem, about 300 meters from the lower campus gate of LAU. Students may have their

coffee and donuts in the morning before or between classes .They also serve bites and

sandwiches ( baguette sandwiches ) and a wide variety of beverages (warm and cold ) .In

addition toffee coffee provides students a quite and relaxing place appropriate to study. Their

prices are considered average for university students (hot chocolate with marshmallows at 4750

L.L. ). As for promotion, Toffee coffee mainly depends on word of mouth inside the university

and distribution of flyers at the gates.

Casper & Gambini’s :

Casper and Gambini’s’ is one of the leading restaurants in Lebanon , they are serious

competitors of “Chocolate lounge” because they target high profile customers , serve delicious

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sandwiches and have entered significantly lately the coffee industry by being an award winning

coffeehouse . Its Branches in ABC Achrafieh and Down Town pose a threat to our lounge

because of their near location .Prices are considered high, parallel to high profile customers, they

position C&G as a high class restaurant (Hot Chocolate is priced at 5000L.L). Their products

consist of diversity of sandwiches and multiplicity of beverages. Regarding promotion, C&G

sponsors many events and rely on Public relations to promote itself.

Club Social :

Club Social is a pub/lounge that opens its doors around 6 pm every night, people can go

hangout, listen to good music, have a fine drink and eat a byte.

Club social is the closest pubs that constitute a threat to our lounge, because we will be providing

at night a similar ambience, but quite different products, our variety of drinks will contain

chocolate-based products, a service that not any competitor offers in Lebanon. Club social is

located in Gemmayze, and targets a large part of our night customers. Regarding promotion, club

social organizes events such as live bands playing and movie projections. It’s prices range from

10000 L.L. to 25000 L.L for the drink , which is considered average , typical , in the nightlife

industry in Lebanon.

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V. Distribution channels:

1) Supplier to company:

1-We decided to choose Max Brenner as our Chocolate supplier . Max Brenner ‘s chocolate are

famous for their finesse and good taste

2-Drinks will be prepared by our own barmen, ingredients will be bought from suppliers such as:

FATTAL & Fils who supplies drinks like Absolute and Dewars.

3-Our sandwiches will be homemade by our Chef , who will make sure that sandwiches will be

of high quality .Ingredients will be provided by local markets but will be controlled by a quality

control supervisor.

2) Company to customer:

Like every bar/coffee shop our services will be provided in house, no home delivery system will

be implemented. In order for people to enjoy our services they can call on our number to make

reservations .They can also come directly to the place and they will be seated on the free table of

their choice, or sit on the bar for a quiet drink. For any additional information, customers can call

on the info/reservation line, no website is needed for us right now to launch our business, a

website will be created later on in the upcoming years. “Chocolate lounge” will create its own

database of customers, occasionally, we will ask customers for their numbers in order to update

our phone number database, this will continuously allow us to update our loyal customers on the

latest happening events and promotions in the “Chocolate Lounge”.

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VI. SWOT ANALYSIS:

STRENGTHS WEAKNESSES
• A new idea introduced to the market • A new concept, people might not easily

grasp it.

• Similar lounges have had successful We are facing too many competitors

experiences in other countries


• The changing nature of the place will • Targets a single social class

attract a high diversity of customers,

therefore a higher attendance

• High quality products for a reasonable • Lack of experience in this specific

price concept. Although it is successful in

other countries, there is a possibility of

failure in Lebanon.

• Can attract people looking for a place High number of employees to be able to cover
day and night shifts , this will cost us extra
to study in, and people looking for fun costs.

at the same time

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OPPORTUNITIES THREATS:

• The expansion of the chocolate culture • The bad economical situation in the

worldwide country

• The active Lebanese night life • The explosive political situation

• The rarity of daytime hangout places in • The high influence of word of mouth in

Lebanon Lebanon, a bad first impression might

cost us a lot.

• The enthusiasm of the Lebanese people • Increasing taxes will increase our start

to go out after spending their summer at up costs

home because of the July war

• The growing entertainment market • Competitors copying on the idea

VII. Objectives and issues:

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How to become effective market leaders ?

To become effective market leaders we are required to supply unique and exceptional

services of high quality and that provide the greatest value to our customers, this will create for

us a competitive advantage over our competitors.

The industry we are entering is highly saturated; we face many competitors, each in one of the

products we serve. But by being pioneers in Lebanon to offer a variety of chocolate based

products, which is an innovative service, we will establish ourselves as market leaders.

We should continuously come up with new ideas and new products , maybe try to let our

customers participate in creating them : by organizing competitions where applicants have to

create new chocolate based drinks , and the winner’s drink , or mix , will be introduced on our

menu and might carry his name . We should also make sure that our customers’ needs and

requirements are met, attained, because customer relationships are the most important to start

and to maintain a successful business. When we promise to provide a adequate place to study, the

perfect place and atmosphere should be supplied.

Being market leaders and successful doesn’t depend only on customers, internal functions

are essential to the success of any organization. Management should stay aware and control all

internal tasks. Complete coordination of all departments is crucial, so is continuous employee

training and cautious employee recruitment.

Finally, we should also work hard on sticking to our mission’s statement principles to maintain

this market leader figure.

VIII. Marketing Mix:

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1) Product:

“Chocolate lounge”, a high profile restaurant and pub, offers a wide variety of chocolate

products as well as hot and cold dishes for breakfast, lunch and dinnertime. “Chocolate lounge”

has an exquisite selection of hot and cold chocolate drinks, which also includes a wide section

for alcoholic drinks, in other words all you can think or imagine of chocolate-based products. In

addition to what we are offering on our menu, we also ensure a good “chill-out” atmosphere for

our students’ customers who are looking for a place to study or read, or for business men who are

looking for a place to conduct business meetings. However, that is all at daytime. During the

night, our lounge goes into a radical transformation, the relaxing music becomes the hippest

music in town, and our customers become adults (above 21) who seek to enjoy a good drink

along with some good music. Our lounge will be turning into an elegant pub. The variety of

products that we will be offering, the selection of beverages and cakes, is listed in the menu

attached with this project .With our lounge transforming from day to night, what remains is our

good service and our exclusive quality.

Our lounge’s character will be innovative, elegant and fascinating .During the day the lighting

will be bright creating a spacey place, right for relaxing, eating, reading newspapers and

studying.

2) Price:

“Chocolate lounge” seeks to attract customers who can afford to pay for our high quality.

Our target customers are mainly middle to high class people, who are looking for a new and

innovative place to spend their free times without the hassle of trying to find somewhere to just

have fun. Our lounge being exclusive by its chocolate emphasis, and unique with its changing

nature, can become synonymous for a good time and comforting atmosphere. And because the

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products we are offering are new to the market ,we can afford to increase prices , thus increase

revenues on one hand , and on the second hand target those highly classed people in the

Lebanese society that are intrigued by new restaurants and pubs that are quite expensive. Our

prices will range from 5,000 L.L to 25,000 L.L for drinks, and to a maximum of 50,000 L.L for a

meal that would include a drink, a sandwich and a dessert from our exquisite selection. On

average our lounge’s will cost a couple of people around 50,000 L.L if they intend to have lunch

or dinner, and would cost them according to how many drinks they order if they are just around

to chill out.

The menu attached with this project gives us an insight on the prices of our products

3) Place:

We intend to open our first branch in Hamra, as it is in the heart of Beirut, Lebanese city

of students, with university students roaming the area. The location will be between LAU and

AUB, on Hamra main street, as well as near the stores and banks .We chose Hamra as our

location to open our first branch because Hamra is full of hotels, many tourists wander its streets,

contains three important universities in Lebanon (AUB, LAU and Haigazian) and is considered

one of the busiest streets in Lebanon. Our strategic location will allow us to be comfortable

exposing our products to our target customers who are actually looking for a place in this area

like ours and are willing to pay this amount of money for this new and unique idea.

We are planning to rent a store that is around 250m2, which make up two stories allowing

customers a comfortable stay .The lounge will be furnished by big and comfortable couches, and

will also be divided in sections, each section containing its couches and table that allow a

maximum of 6-8 people seated.

Basically the first floor of our lounge will contain the reception bar, where orders are

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taken, and tables that make up the dining area. The upper floor holds the actual lounge with a

larger number of tables, couches and sofas. It will also include the bar that will serve the various

alcoholic and non-alcoholic drinks. This upper area will be the place where those who want to

study and enjoy a calm atmosphere during the day will dine. It is also the center of the lounge, in

which at night those who hit our bar will be served upstairs near the DJ and his set. Bathrooms

will be located in one of these two floors, preferably the upper one because the first floor will be

where the kitchen will be situated. Basically our lounge will host around 150 comfortably served

customers.

4) Promotion:

We intend to promote ourselves initially by “word of mouth” and by our huge and

appealing sign and decorations that should attract our customers. However, as business booms

and we position our selves accordingly in the market, we intend to broaden our marketing

strategy by launching an advertising campaign. We will post advertisements in various

magazines that aim towards students and working adults’ .By targeting at first our target

customers, we would keep our advertising costs low. Then later on we would try to expand our

customer base, we could then consider advertising on a larger scope, and target more diversified

customers on other branches. the magazines that are read by students are OUTLOOK,

MAINGATE, WHATS UP LEBANON ; the costs of advertising in these magazines are quite low

.And to get to our other customers who are those working adults we will reach them through

magazines such EXCLUSIVE, LEBANON OPPURTUNITIES, THE GUIDE, EL BALLAD…

Some competitions will also be held to enhance our lounge’s liveliness. These competitions

would include bartender contests in which various bartenders would enter to perform some

stunts, create new drinks and the winner would have a drink named after her/him. This would

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increase our lounge’s popularity and attractiveness, and vivacity.

IX. Action programs:

I In order for our project to be in full operating scale, a number of steps are in need to be

taken. Assuming work must be started in the next month, that is if our project was approved

today, we should start in the first month by :

• We need to choose a proper location for our business, the right place to rent, compatible

with our budget and our needs.

2nd month :

• Hire an interior designer and contractor to make the proper arrangements and repairs in

the chosen location.

• In the mean time we need to arrange a furniture supplier (local or foreign) and make the

necessary price negotiations and try to minimize our costs before signing the contract and

making the purchase, but certainly without forgetting our principles that is to maintain the

high profile character of our lounge .

3rd month :

• Make all the necessary installments : phone line ,electricity ,computers ,sound system ,DJ

equipment ,plumbing ,computers ,kitchen supplies

and buy our plates, forks ,knives ,glasses ,spoons etc… in order to complete our kitchen

• Make all the required arrangements with suppliers of ingredients and alcoholic beverages.

4th month :

• Recruitment of employees starts , arrange interviews , meet potential chefs and DJ’s to

insure customer satisfaction and high quality .we should recruit good employees , and

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preferably choose experienced ones.

• Hire and train employees to make sure their capable of working under all circumstances

(the pressures of a Saturday night for example) so they won’t be any problems during

first days of operations. As well as the remaining necessary staff: valet parking ,cleaning

staff, accountants…

• Start preparations for the opening of our lounge: announce the opening of the lounge

weeks before so that people can participate, ensure media coverage. The announcement

to customers will be made through students and nightlife magazines.

5th month

• Organize every employee’s schedule between day shift and nightshift, as well as number

of work days per week.

• Make sure the opening night goes as smoothly as possible, first impressions are gold in

this business.

• Create our phone database to keep people updated on our future events.

• Perform necessary auditing and maintenance to make sure all operations will go

smoothly.

X. Budgets :

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Budget for 2007/2008
nature costs
rent/year 500$/m2 * 250 = 200000
salaries 15employees *500 = 7500
salary of general manager 2000/month*12 = 24000
salary of a gourmet chef 2000/month*12 = 24000
cost of computers+ system 2000
cost of casher : casio 500
cost of redecoration + interior designer 10000
furniture 5000
Kitchen supplies 10000
Music installation+ equipment 10000
advertising ( flyers + ads in magazines ) 10000
inputs ( ingredients ) 30000$/month*12 = 360000
electricity + water + phone bills 700$/month*12= 8400
team training 2000
interest expense 40000
Miscellaneous expenses

10000
Employees uniform 3000

Total 726400
In our first year of operations , our total expenses will be 726400 $ . As stated earlier that

on average our amount of sales / day during the first year will be 2000 $ , so on average our total

revenues will be :2000 * 350 = 700000 $ . So during our first year we will only be suffering a

loss of 26400$ . This loss is mainly due to the high fixed costs of opening ,decorating the lounge

and for the interest expense .

Budget for 2008/2009


nature costs

rent/year 500$/m2 * 250 = 200000


salaries 15employees *500 = 7500
salary of general manager 2000/month*12 = 24000
salary of a gourmet chef 2000/month*12 = 24000
maintenance of computers+ system 2000
advertising ( flyers + ads in magazines ) 20000
inputs ( ingredients ) 40000$/month*12 = 480000

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electricity + water + phone bills 800$/month*12= 9600
Interest expense 40000
Pay back the loan 400000

Total 1207100

In the upcoming year, sales will increase to 4000$/day , therefore our revenues will be

1,400,000$ . The second year will yield for us a profit of 200,000$ . We notice that the total

expenses have increases although fixed costs of the opening have been paid last year , but this

year we had to pay back our loan and to increase our advertising activities , without forgetting

the increased amount of inputs to match the increased demand of our products thus increased

sales .

XI. Controls

Our aim is to make sure that we are taking corrective action and achieving our objectives

and goals. That is why a process of evaluation is needed from time to time. A valid comparison

between our goal and performance should be our main concern.

To evaluate and to maintain our company’s high performance, we have to implement inventory

audit checking and examine our quality of products and services. This is why MIS (management

information system) should be installed in our company, to make sure a professional control

system is on hand.

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The following tables summarize the control process that our company is going to pursue:

What should be By which activity How often

controlled

Customer Suggestions and surveys Monthly

approval and

satisfaction
Sales analysis Financial data Monthly

Sales data
Marketing and Observation and response 2 months

advertising ‘s from the customers

response
competitors Investigation and 3 months

observation
Employees Training 3 months

Performance and Market research 3 months

progress

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XIII.Final thought ( conclusion ) :

“Chocolate lounge” being a combination of a café, restaurant and a pub brings a new idea to

the business offering generally chocolate based products. We introduced a new chocolate culture

concept and a chocolate bar experience in the Lebanese market that incorporates each aspect of

chocolate in our everyday hectic life. Our target customers are mainly middle to upper class

university students, as well as young professionals in their 30s and 40s. Our target customers are

of a high profile because in our lounge we implement a “more for more strategy”. We also took

into consideration the threats that our competitors pose on us. With our marketing mix being

intact and well developed, we also came up with an action program that details our work in the

up coming months. We also developed our budgets for the years 2007/2008 and 2008/2009

considering all our expenses.

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