MKTG 1027 Section 2: Marketing Plan URBANO COFFEE CO.

Jason Yeoman Thursday April 8, 2010 Jack Michienzi

TABLE OF CONTENTS
1.0 2.0 3.0 4.0 5.0 Mission Statement Product/Service Description Geographic Area Organizational Objectives Environmental Landscape 5a. Social Trends 5b. Economic Trends 5c. Competition Trends 5d. Political/Legal Trends 6.0 Competitive Analysis 6.1 Competitive Analysis Summary Statement 7.0 8.0 SWOT Analysis Marketing Strategy 8.1 Customer Analysis 8a. Geographic Profile 8b. Demographic Profile 8c. Psychographic Profile 8d. Behavioral Profile 8.2 Marketing Mix

8.2a. Product 8.2b. Price 8.2c. Place 8.2d. Promotion

1.0 Mission Statement

Urbano Coffee Co. strives to provide the community with quality coffee and teas while maintaining our commitment to sustainability and social responsibility.

2.0 Product/Service Description

Urbano Coffee Co. is the first organic coffee shop in London, Ontario. Urbano provides high quality products and services that allow customers the option to enjoy a freshly prepared beverage or the tools to make our quality coffee and teas at home. Located in downtown London, Urbanos intimate and vibrant venue is the perfect spot to enjoy a quiet coffee and watch the world fly by.

3.0 Geographic Area

Urbano Coffee is located in downtown London and seeks to provide coffee products and services to consumers in the London-Middlesex area.

4.0 Organizational Objectives

4a. Secure financing and investment of $75,000 for location and equipment in the first year of operation. 4b. Achieve a net profit margin of 20% on total revenue of $500,000 by the end of our second year in business.

5.0 Environmental Landscape

5a. Social Trends: Consumers are beginning to embrace their role as global citizens and are constantly looking for products and services that are sustainable and environmentally friendly. Premium coffee companies and brands are looking to catch up to changing social trends and specifically to growing interest in organic and free trade coffee. By differentiating our business as the only provider of exclusively organic coffee and tea, Urbano is able to immediately separate itself from similar businesses in the area. 5b. Economic Trends: A deep recession has decreased the demand for luxury brands and status items such as premium coffee. While there are some detriments to opening in a recession, there are many opportunities for Urbano to seize upon such as government grants and tax credits. Furthermore, the current economic climate is an opportune time to negotiate a favorable rent agreement and distribution deals. 5c. Competition Trends: Many coffee companies are trying to expand their product lines to include more food and impulse purchases such as CDs and other media. Most of the other companies in the industry have several distribution channels and platforms. Instead of trying to diversify product lines to include items such as CDs and books, Urbano will pride itself on being a specialty store where people can be confident in the quality of the product and knowledge of the staff. By differentiating ourselves, it is unlikely the affects of the recession will be as painful in the short-term as specialty products are generally less affected by economic changes.

5d. Political/Legal Trends: The City of London has made a significant effort in
recent years to revitalize the downtown core. Several prominent developers have invested considerable capital to bring more commercial and retail space to the downtown area. With the announcement of Fanshawe Colleges intention to build a School for Applied and Performing Arts in the downtown core, it is a fantastic time to enter the neighborhood, as it appears to expect significant growth in the near future.

6.0 Competitive Analysis Urbano Coffee Co. Product

Organic coffee and teas, specialty products Beans: $14.50/one pound Beverages: $1.50 $8.00 - Local radio - Viral, word of mouth - Facebook ads - Interrobang and Gazette advertisements - Purchased and delivered by an exclusive area distributor of organic coffee. - Sold direct from retailer to consumer

Starbucks
Premium coffee beverages, snacks, specialty products and media Beans: $11.95+/one pound Beverages: $1.65 $6.00+ - National television and radio ads - Newspapers - Online

Williams Coffee Pub

Premium coffee beverages, meals, deserts, coffee beans Beans: $5.99/half pound Beverages: $1.50 $6.00 - Billboards - Online - Radio

Price

Promotion

Distribution

- Uses strategic channel alliances - Sells to the consumer through direct sales, online and through various channels. E.g. Walmart

- Distribution arranged through franchiser and sold directly to consumer.

6.1 Competitive Analysis Summary Statement

Urbano Coffee Co. is able to sustain a competitive advantage through utilizing its position as a specialty store to maintain a niche following of customers who are less concerned with cost than by the quality of the product itself. By establishing ourselves as the only organic coffee company in the London area, we can utilize a consumer market that is currently being underserved.

7.0 SWOT Analysis

Strengths - Urbano is serving a unique product that cant be purchased elsewhere in the city. - The business is located in a central area of London, is easily accessible via public transit and is a high-traffic location. - The business will be locally owned and operated which allows employees and employers to develop a unique and strong bond with the community.

Weaknesses
Organic coffees and teas are still a relatively new product available to the mass market. As it is a new brand instead of a franchise, there is no brand recognition, which will have to be developed through grassroots until a strong financial base can allow for an expensive advertising campaign. Urbano has not had an opportunity to develop a customer base. It can be difficult for a new company to introduce a relatively new product to coffee consumers.

Opportunities
As a result of the poor economy, the business can be developed with lower start-up costs. Social trends are affecting consumers to have more interest in environmentally friendly and organic products. There is a high concentration of target consumers in the area.

Threats
It can be difficult to sell luxury products, particularly unfamiliar luxury products in a poor economy when the market is already saturated with similar products. There are already many coffee shops downtown with a blend of independent and chain stores. Established coffee companies have a significant portion of the market share and have proven to be able to retain their customer base effectively.

8.0 Marketing Strategy 8.1 Customer Analysis

London, Ontario is an ideal location for Urbano Coffee Co. Based on 2008 projections, London will have a population of approximately 372, 850 with 62% of the population between the ages of 20-64 (BMA). It is integral for the growth of the Urbano Coffee brand to have a large population to develop a customer base as well as having a high percentage of its target demographic to initially market

itself to. Another advantage to the London market is a high population density. As of 2008, London was projected to have a population density of approximately 886 people per square kilometer, which makes it the 26th highest population density in Ontario (BMA). The population density of London is high enough to ensure plenty of transit throughout the city as well as lowering the overall tax burdens such as sewage and infrastructure. However, London still has a population density manageable enough that societal concerns that can damage urban centers and increase costs such as emergency services are not going to be an issue. London is also expecting a population growth high enough to ensure development and investment without disrupting the current societal climate of the city. While there is a varied market available in London, Ontario, Urbano Coffee Co. has positioned itself to focus on two main target markets: university and college students as well as urban professionals and residents of the downtown core. By focusing our efforts on these two essential markets, Urbano Coffee will be able to develop a strong customer base with two essential markets in the London area before expanding efforts to become a community leader, similar to the marketing efforts of The Little Red Roaster. 8a. Geographic Profile: Urbanos target markets are both located in dense urban areas, making Urbanos downtown location an easy target for both markets. Also, continued growth in commercial, office and residential development will see a continued growth and concentration of the consumers that Urbano Coffee Co. is looking to attract. 8b. Demographic Profile: the target groups for Urbano Coffee Co. are men and women between the ages of 20-64. The majority of caffeine consumers are in this age demographic and also have the most disposable income. While this is a broad range, many of the student customers that Urbano is targeting will be quickly transitioning into the workforce and becoming a part of the urban professional demographic that Urbano is also looking to influence. While Urbano can be considered a luxury brand due to its higher price point, income demographics are of a lesser concern. The student market that Urbano is trying to engage may have a lower income, but they are often more socially conscious than people in older income brackets and are willing to spend their discretionary income with companies who have similar values to their own. Also, the urban professional market that Urbano is also attracting as a luxury brand are more likely to make larger purchases as well as merchandise such as mugs and coffee presses that will be able to make up the difference of students whose purchases may have a lower price point. One of the similarities of both markets are that most have post-secondary education and are more informed on issues such as sustainable farming and organic foods that will help build awareness of the brand. The awareness of organic foods is essential to differentiating the Urbano brand from Starbucks or Coffee Culture. 8c. Psychographic Profile: The psychographic profile of the Urbano customer is the most crucial element in marketing to our target markets. Target customers are likely to be health conscious and socially conscious. Urbano customers are aware of the health, political and societal importance of organic foods and are likely well informed on a number of issues regarding sustainable farming and organics. Urbano Coffee Co. must maintain a strong awareness of the interests

and concerns of the customer regarding the issues of sustainability and organics. Also, the Urbano customer is likely to be an active person who may not have much free time. It is essential for the Urbano location to be accessible as well as maintaining an organized and efficient store to ensure patrons are able to locate and purchase items in a timely manner. 8d. Behavioral Profile: Urbano Coffee Co. customers are looking to make their coffee purchases while ensuring that they are being socially conscious and receiving a high quality product. Coffee customers often have a strong brand loyalty with high usage rates so it is essential for Urbano to position the brand with a unique benefit being health and socially conscious while still high quality, to convince consumers to try a different brand. Also, students and urban professionals often have little free time to shop or purchase gifts, so having a variety of different merchandise and take-out options is another important aspect to developing customer loyalty and increasing individual purchases.

8.2 Marketing Mix

8.2a. Product: The product can be categorized and positioned in two separate models: food and beverages as well as merchandise. The food and beverage element of the products gives Urbano Coffee Co. its distinction from other coffee companies in the area. All organic coffee and tea beverages that are purchased through fair trade practices are the unique factor that position Urbano as a socially conscious company. Another important aspect to Urbanos food service business is providing health conscious food options such as vegan baked products and fresh fruit and vegetable bowls. By utilizing local produce at the Covent Garden Market and varying the menu by purchasing produce in season, Urbano can separate itself by being a leader in offering healthy and high quality products while still maintaining high profit margins. Another important aspect to the companys brand will be merchandise such as coffee presses, coffee beans, mugs, and gift packages. It is pivotal to take advantage of the busy lifestyle of our consumers by offering quick ideas for gifts, dinner parties, or breakfast. It is also a necessary function to compete effectively with companies such as Starbucks and Williams who are already offering similar options. 8.2b. Price: One of the essential methods for making Urbano Coffee Co. profitable is the implementation of a premium pricing strategy. Since Urbano is the only coffee company in London providing all organic, free trade coffee and tea, it is able to charge a premium over similar businesses such as Starbucks or Coffee Culture. Due to the size of Urbanos competitors, it is unlikely that our competitive advantage will diminish, as it would be difficult for other businesses to change their buying methods enough to make the same distinction as selling all organic coffee. 8.2c. Place: Most of the channels of distribution of products and coffee will be indirect through wholesalers who will be able to keep ownership of the product until its ready for shipment. Due to the size of the business, it is unnecessary to maintain a large inventory. For food products, all purchases will be purchased from local markets and produced in house for consumers.

8.2d. Promotion: Until Urbano has had time to develop revenue, it will be necessary to develop viral marketing techniques and use targeted advertisements as well as take advantage of local public relations opportunities. One of Urbanos main consumer bases will be students and it is essential to develop marketing techniques on Fanshawe and Westerns campuses. Techniques such as using flash mobs, setting up free iced coffee booths during Orientation Week and advertising in the school newspapers and agendas will give Urbano exposure to 75,000 full and part-time students while keeping advertising costs reasonable. Also, by providing free coffee for charitable and local school events, it is a way to achieve great public relations while making many of our urban professional customers aware of our product.

WORKS CITED
BMA Management Consulting Inc. (2009). Municipal Study 2009. Hamiltion, ON: BMA Management Consulting.