Doce Dieta M.plan - G14

MARKETING PLAN
MARKETING MANAGEMENT
November 19, 2010
Florbela Pinto 153010151 Jorge Oliveira 153010142 The Lisbon MBA Part Time 2010 - 2012
Marketing Management
Summary
1 Executive Summary..............................................................................................2 2 The Challenge........................................................................................................2 3 Situation Analysis.................................................................................................3 3.1 3.2 3.3 3.4 3.5 Company Analysis........................................................................................4 Customer Analysis.......................................................................................4 Competitor Analysis....................................................................................6 Collaborators..................................................................................................7 Climate.............................................................................................................8
3.5.1 Political Factors......................................................................................8 3.5.2 Economic Factors..................................................................................8 3.5.3 Social Factors.......................................................................................10 3.6 4.1 4.2 4.3 5 6 SWOT Analysis.............................................................................................11 Segment 1.....................................................................................................12 Segment 2.....................................................................................................12 Segment 3.....................................................................................................12 4 Market Segmentation.......................................................................................11
Alternative Marketing Strategies................................................................13 Selected Marketing Strategy........................................................................13 6.1 Product...........................................................................................................14 6.2 Price....................................................................................................................16 6.3 Place location..................................................................................................17 6.4 Promotion.........................................................................................................18
7 SHORT & LONG TERM PROJECTIONS...........................................................19 7.1 7.2 Fixed Costs...................................................................................................20 Break-even Analysis..................................................................................21
7.3 Sales Forecast................................................................................................22 7.4 Advertising Budget.......................................................................................24 7.5 Contingency Planning..................................................................................24 8. Conclusion............................................................................................................25
Florbela Pinto, 153010151
Jorge Oliveira, 153010142 |2
Lus Bentes 153010139
8. ConclusionAppendix i, ii, iii
1 Executive Summary
With the increasing emphasis on healthy life styles, well being and quality of life, people needs are changing. At the same time tastes for food are becoming more sophisticated as well as more heterogeneous. There is a growing concern with the quality and quantity of food people eat. This tendency is yet to be explored explicitly in the coffee shops market. Healthy food is still highly connoted with macrobiotic, vegetarian and not tasty; this is a great setback and will be Doce Dieta first barrier. Fortunately there has been a significant increase in alternative ingredients offer in the last few years. The whole project lies under the assumption that it is possible to provide better quality foods and nutrition without changing the basic core of the market. We also believe that the tasting experience we offer will be actually perceived. Some customers will try just for curiosity and will learn that our healthy concept is not antagonic with the eating and drinking pleasure they expect from a coffee shop. The core characteristics such as taste, flavor, senses and aromas will be present as they are one of our main concerns. The present plan discloses objective data for the implementation of the first coffee shop in the center of Lisbon.
The Challenge
Doce Dieta will be a startup aimed to a niche in the high quality coffee shops market, a place to socialize and spend time in a relaxed manner with family, friends or colleagues with the distinctive combination between healthy and tasty. Medium term goal is the creation of two more coffee shops in the city and the foundation of a recognized brand in the market. The next step is the expansion of our chain of healthy coffee shops to the rest of the country in
specific urban locals that fulfill the segment requirements identified. This will enable the company to achieve different procurement results and place it in a more competitive position regarding other existing chains. In the long run, the pioneer effect will present a clear edge when the competition decides to change their focus to healthy as we expect. Internationalization may be considered in the future; in this case market analysis must be object of thorough attention. The scope of this marketing plan is to outline the strategies, tactics, and programs that will make our sales goals a reality.
Situation Analysis
The first assumption we hope this plan will confirm is exactly that the market not only is seeking for our healthy offer, as demand will increase in the next few years. Actually we believe that the healthy behavior will be the established reality in the long term. Doce Dieta must build a brand around the whole concept. Products play a big role and are a distinctive factor. The service will be crucial to bond with the clients.
Fig. 1
Fig. 2
Although we havent considered the whole pastry market in our targeted area, there is a big offer of pastries in the city. Some of these offer a fairly good atmosphere and very good conventional pastry. There are some
renowned vintage places in very good locations. These places werent considered as competition since they serve different segments.
3.1 Company Analysis

This company is meant for a population that enjoy cultural events, reading, listening to music and that seek coffee for their relaxing moments between stressful activities. A strong emphasis will be put on the atmosphere. A sophisticated, calming, relaxed and stress free experience to our customers. People must associate our place to a timeless experience that enables them to forget their concerns and strains. Another of our goals is to become a life style brand around the concept of Tasty and Healthy. Focusing on office executives, college students and seniors that feel the need for a coffee and a relax moment during the day or after work. Each client will experience much more than the best coffee and healthy sweets. They will be received by a friendly team in a meeting place, comfortable welcoming atmosphere with great ambiance music. The shop will be designed to offer different environments to allow at the same time people that will stay for different periods and for different objectives. The kitchen will be in a visible position within glass walls faced to the interior. This way, customers will be provided with the opportunity to have close contact with the cooking process, enhancing both the learning process and trust. Our recipes will be developed by a professional nutritional team. Traditional recipes will be transformed to provide the nutritional balance and taste we propose. 3.2 Customer Analysis
In order to perceive customers needs and behaviors, we have conducted a questionnaire to assess the following:
existing offer consuming behaviors and preferences
understand if there is space for our product in the market
Specifically, with each question, we wanted to know: 1) If the respondent usually attends our competitors coffee-shops 2) If the respondent appreciate, and at what level, the already existing offer 3) If the respondent would appreciate, and at what level, the innovations we intend to introduce in the market. 4) What kind of sweets are most appreciated, to understand in what products we should engage more effort in production
5) What is the acceptability of the brand name we proposed.

6) Socio demographic data we think might be useful in the result stratification. The questionnaire was conducted bearing in mind the segments we had previously identified.
Office Executives, 220 questionnaires answered online in College Students amounted for 88 answers in a face to face Seniors totaling 17 questionnaires answered in a face to face
Google Docs Forms; survey at FCEE; survey conducted in our projected area.
Discussion of Results:
From the purposed features we were able to observe that most people value ambience music, comfort and decoration. From the ones we want to introduce, the higher score went to sweets baked at time and place and tasty but low-calorie sweets. Thus, these shall be the ones where we will enforce when implementing the concept. From this survey we were able to observe the following:
The most appreciated features by all the segments were comfort and decoration, the sweets baked at time and place and the tasty but
low-calorie sweets which points out a important concern with taste, health and comfort. The ambience music is not as much important to seniors as it is to university students and office executives. Only executives perceive wi-fi internet connection as an important issue which may be linked to the increasing internet mobile connections. Reading is not a main feature for university students. None of the respondents perceive the workshops as an added value.
See Appendix i
3.3 Competitor Analysis

Competitors identification in Doce Dieta case must comprise the two most significant characteristics we want to incorporate in our value proposition. As previously stated we want to establish has a niche of the higher quality coffee shops. To achieve that positioning, our products will be exclusively healthy. This is a clear distinction to the existing offer. Defining the boundary of our competition must account for these two key aspects which Doce Dieta will combine, the high quality coffee shop experience and the healthy emphasis. Although we can notice an increasing concern with the health aspects of their specialty coffee and other products, the existing coffee shop market has a marginal amount of healthy products presented only as an alternative, or not offered at all. The most significant coffee shops accounted for in this study are Starbucks, Magnolia Caff, Cup & Cino, Il Caff di Roma and Jeronymo. High quality coffee shops offer has increased mainly since the beginning of the new millennium. They are well thought; typically offer a wide spectrum of products, comfortable space, relaxed atmosphere and a personalized relation with their clients. Overall they are very well structured and their quality levels are very high.
Our positioning of Doce Dieta regarding the existing competition is visible in the following perceptual map.
Fig. 3 Perceptual Map Vertical axis: Health Horizontal Axis: Confort Circle Size: Prices
3.4 Collaborators
Building brand loyalty through programs focused on providing staff the corporate spirit. Staff must feel at home when working, happy people make customers happier. Management believes in our brand potential and that will get a great result in customer satisfaction. The first partnerships we will try to do are with local gymnasium, in order to spread our healthy concept. In the future when the number of stores increases and the brand reaches market recognition, interesting partnerships can be made with airline companies, train and long distance busses and book stores. There are online door to door distributors for our kind of products that we consider very interesting potential partners. An example is http://www.nomenuhomeservice.pt/.
3.5 Climate
3.5.1 Political Factors
The market has been experiencing a growing emphasis on product and service safety. The health authorities course of action has been central creating both public awareness and a natural purge in the market. People demand for higher standards in all the food supply chain, coffee shops and bakeries included. High end coffee shops had their breakthrough in the Portuguese market in the early 2000s. This tendency is aligned with the EU policies towards public health and safety. This is a worldwide trend mainly in the biggest economies.
3.5.2 Economic Factors

Portuguese economy has shown a weak growth rate in this last decade. The situation has worsened specially after the subprime event. There has been concern in the country that it may need help from the International Monetary Fund if it cannot restore the confidence of financial markets worried about its budget deficit. Portugal recently adopted an austerity budget aimed at cutting the deficit from 9.3 per cent of gross domestic product in 2009 to 4.6 per cent in 2011. There has been concern that the austerity measures may lead to economic stagnation in the next year. Tax burden to the population have been increased and the population purchasing power has been diminishing. Consequently, projected confidence levels are falling. The social classes most affected are the middle, upper middle and upper classes. This constitutes a major risk to the project because these are the classes where we identified our core market segments. However, market data show an increase in private consumption in the first terms of the current year.
Fig. 4
Fig. 5
Indicador de confiana dos consumidores INE, 28 de Outubro de 2010
Fig. 6
Indicador de clima econmico , Fonte: INE
Jorge Oliveira, 153010142 | 10
3.5.3 Social Factors
Western European consumers are quite sophisticated and also very demanding. It's not just about cutting out fats and reducing calorie intake but more about achieving a balance. The best opportunities lie in niche sectors where successful market penetration will require product specialization and uniqueness. Similarly in Europe, consumers of all ages tend to choose bakery products they view as healthy or nutritious, driven by government pressure to eat well and concern about body image, confirmed a Euromonitor report last March. Market researchers maintain that a focus on health trends such as fortified and gluten free foods combined with the development of value added items such as savory bakery products will be critical for maintaining sales momentum and profitability when the market picks up again. Source: www.foodanddrinkeurope.com
3.6 SWOT Analysis
Market Segmentation
The segmentation is significantly made through the store localization and through the price policy. Although Doce Dieta pricing policies place us bellow Starbucks which is the lead player in the market.
Present a description of the market segmentation as follows:

Market Segment and targeting, Doce Dieta approach to the market of the coffee houses is based on the concept of a comfortable meeting place, somewhere that anyone who loves coffee, pastry or bakery can sit down, listen to music, read a book or a newspaper and enjoy the atmosphere. The key difference relies on the added benefit that the products are carefully developed to be nutritionally balanced. Doce Dieta doesnt offer
this as an option, rather is the philosophy itself. Being a fairly recent and growing public concern, the concept will be further exploited and Doce Dieta will organize workshops and events to create more awareness, both to the healthy but still tasty theme has to the Doce Dieta brand itself. Doce Dieta is strongly committed to the events and the whole message of a relaxed and cozy atmosphere where people are offered the chance of learning how to cook healthy bakery and the ingredients available.
After conducting a brief market research of the existing coffee-shops, we realized that the following segments were our targets.
4.1 Segment 1
College Students Although most of them are not working at the moment, a quiet place where they can enjoy their free time with friends and/or studying is always appreciated.
4.2 Segment 2
Office Executives Living at a high rhythm of work, this population is looking at coffee-shop as a place do distress from work and daily problems. Looking for a quite involving atmosphere.
4.3 Segment 3
Seniors Offering a space where they can spend some joyful time in company of their most dears.
5 Alternative Marketing Strategies
Before selecting our previously scoped positioning we have considered several different issues concerning our possible marketing strategies.
Selected Marketing Strategy
While conducting surveys we asked a focused group to answer some specific questions regarding key characteristics in the existent market coffee shop offer. The results are in the following table and allowed us to better perceive our positioning within the market. We can notice that the
Broad Target
Health a imply qu consequ
health focus is yet to be presented in a clear differentiating manner. The next step was defining our punctuation by each characteristic. This was done by our team.
Althoug increase awarene momen to all pe
6.1 Product
Positioning within the food and beverage market, we will provide a variety of alimentary products that will include:
Drinks
Coffee drinks (espresso, latte, cappuccino, etc) Teas Water, natural juices
Foods
Low calories bakery (bread, sweets, croissants) Sandwiches salads
What will distinguish our products from competitors?

The recipes will be carefully studied by a nutritional team, in order to transform traditional recipes. We will gain in healthiness, reducing calories but keeping flavor. Some of the basic alimentary substitutions we propose are:
Soft drinks Natural Juices, water, or tea White bread Brown Bread Pasta Whole grain pasta Saturated fats Olive oil and Sunflower oil Sugar (sucrose) Fructose Fat dairy products (e.g. Milk, butter, cheese) Low-fat dairy products or soy products (e.g. skimmed milk, fresh cheese, soy milk).
We include here some specific proposed alterations, to better explain the concept and the associated benefits.
Muffins example: Most people enjoy warm muffins, especially for

breakfast on a wintry morning, although muffins are good any time of the day or any season of the year. Then again, although there are exceptions, many bakery or store-bought muffins are not especially nutritious, and they are often loaded with trans-fat and high in calories. For instance, a bakery muffin can contain 500 or even more calories. The heart-healthy muffin recipes we propose, though, are actually quite wholesome since they contain fruit antioxidants; plus, they are low in transfats as well as calories and high in fiber, which means that people who are health conscious and/or dieting can enjoy them without experiencing an ounce of guilt. As muffins were the most highly scores sweets in our questionnaire, we will provide with an example of how we could do a recipe transformation. See Appendix iii.
Marketing Objectives
Doce Dieta marketing objectives for the first three years of operation include: Grow total sales by 10% annually. Build customer loyalty through educational programs (e.g.
workshops)
Maintain a staff of enthusiastic employees excited to share their training acquired knowledge with Doce Dieta customers. Build the Doce Dieta brand to the point where it becomes a household word in the area. Open more coffee shops so that brand and sales can grow quicker in order to achieve a respectable market share.
In order to compute the market share we have used the sales per store values that we had access to, and the number of stores that the competition had in Lisbon. That lead us to our definition of market as the high quality coffee shops in Lisbon.
6.2 Price
In order to evaluate the competition pricing we have chosen 9 products and compared the prices. As we can see by looking at the table it is very difficult to say that one product is more expensive than the other. Since the products sold by them are very alike we chose to extract a Unit Price that corresponds to a mean of the 9 products. That way we can easily compare prices.
We can see that Starbucks is clearly the competitor with higher prices with a unit price of 2.19, while the rest of the competition has values between
1.59 and 1.49. This makes sense since Starbucks is the most valued brand. It was also possible to get the annual sales of three of those competitors (http://www.infoempresas.com.pt) and estimate the unit sales which will be a great help to define our goal.
Ma com in petitorsS les(2 0 ) a 09
SBUX Unit Price Sales MAGNOLIA Il Caffe di Roma
2,19 1,57 1,59 2.625.154,68 1.513.365,43 1.216.797,80 Number of stores 5 7 7 Sales per Store 525.030,94 216.195,06 173.828,26 Sales per Store per month 43.752,58 18.016,26 14.485,69 Unit Sales per Store 239255 137997 109402 Unit Sales per Store per Month 19938 11500 9117
Again Starbucks shows its strength with almost the double of sales per store of Magnolia and Il Caf di Roma. Not only has the higher unit price but also the higher number of sales.
6.3 Place location

Doce Dieta will locate the first coffee shop in the Chiado area this is high costly Lisbon zone. After some research we reached a price of 20/m 2 for a 300m2 space. This is a shopping and business area with a great transportation network. There are some college campuses nearby. It is also near a very busy nightlife, we expect people to gather often before leaving to nearby night clubs. Another concern was the purchasing power of the local inhabitants which we defined as above 100 index. As we can see in the next map, this is a high valuated area
6.4 Promotion
Website, A well optimized website can yield positive organic results and keep the company in the mind of coffee drinkers who look for their next coffee experience online; Facebook and Tweeter are widely used, there are some interesting; Search engines key words (coffee shop, pastry, healthy, etc);
The main objectives of our advertising are:
Initial brand advertising With this we present our product using

magazines/newspapers and brochures.
Customer contacts With this we will create and maintain a regular
client basis. In order to achieve it, our clients can sign up in our
internet site. Regularly information regarding our products, events and brand. This strategy will be highlighted in each of the
advertising strategies.
Continuous brand advertising. The replacement of the initial brand advertising with a less
aggressive and costly version as the project evolves and the
brand becomes known.
SHORT & LONG TERM PROJECTIONS
Unit Variable Costs

Doce Dieta is operating in an industry capable of supporting high gross margins. With the objective to define a realistic variable cost we decided to compare the price of some products bought in a normal supermarket with the price of our less expensive competitor. #6 Blueberry Muffin Ingredients:
cup skim milk cup vegetable oil 1 egg 0,09 1 and cup flour cup sugar 1,5 Total for 6 Blueberry Muffins Total cost for 1 Blueberry Muffin 0,32 Minimal Price of 1 Blueberry Muffin 1,2 Min Per-unit revenue Cost/Price
= 0,085 L = 0,06 = 0,0425 L = 0,06 = = 0,255 Kg = 0,15 = 0,125 Kg = = 1,93 = = = 0,88 = 27%
In order to simplify we considered the monthly energy, gas and other costs as fixed costs. So we can say that the variable costs in relationship to perunit revenues are low. Lets say that variable costs are equal to roughly 25% of per-units price of our less expensive competitor. In terms of the unit price that we are using as units, this represents an unit cost of 0,35. It is our hope that as we move into the future and continue to build relationships with our suppliers, this value will decrease further, approaching a value of 20% which represents an unit cost of 0,28.
7.1 Fixed Costs

Fixed costs for Doce Dieta include: rent costs, facility lease costs, wage costs, monthly costs (energy, gas, ) and other costs which Doce Dieta must maintain on a monthly basis. These costs are fixed and aren't impacted by an increase or a decrease in sales. In order to implement our coffee shop we need to be located in high costly Lisbon zone. After some research we reached a price of 20/m2, which means, for a 300m2 a monthly cost of 6.000,00. To implement our brand view and quality we will need to get a business lease for equipment and improvements. We defined that 300,000 would be more than enough and we got the following leasing simulation which represents a monthly cost of 3.590,40 with an initial payment of 45.000 and a residual value of 50.000: The cost related with employees can be very difficult to predict, but based on the 2009 Estudo Econmico Sector da Indstria de Panificao, Pastelaria e Similares the mean monthly wage for this industry is 650. Since we are in Lisbon and we are aware of the wage discrepancies to other regions of Portugal we decided to use 1,000 as the monthly wage which results in 1,166.67 when we account for the 14 annual wages. For 300m2,
we decided to use 8 employees, which is more than our competitors. This represents a monthly cost of 9,333.33.
Monthly costs we calculated:

Rent Leasing Wages Energy, gas, Total Monthly Costs 6.000,00 3.590,40 9.333,33 1.500,00 20.423,73
7.2 Break-even Analysis

In order to do the break-even analysis we decided to use the maximum, minimum and the mean value of our competitors and to try to position ourselves as less than Starbucks but higher than the rest of the competition as on the perception diagram.
Max Average Unit Price Expected Unit Sales Average Per-Unit Variable Cost Estimated Monthly Fixed Cost Break-Even (#Sales) 2,22 19.938 0,35 20.424 10.925
Min 1,39 9.117 0,35 20.424 19.607
Mean Doce Dieta 1,69 2,00 13.518 ? 0,35 0,35 20.424 20.424 15.261 12.357
As we can see by the break-even analysis compared with the expected unit sales of our competitors, a 2,00 unit price is good and realistic price position since the mean expected unit sales are 15261 while our 2 position gives a break-even of 12357 sales.
7.3 Sales Forecast

Revenues for the first year of operation are based on an almost 10% growth rate from month to month. This is an aggressive estimate, but we feel that our strong emphasis on marketing will have positive results.
Annually, beyond the first year of operations, we're predicting a growth rate of roughly 10%. We'll have a better idea of potential growth rate beyond year one as we make our way through our first year. The plan will be updated as we receive more information.
With this sales forecast we can also calculate the market share growth during 5 years.
7.4 Advertising Budget

The advertising budget will consistently equal approximately 20% of the total sales revenue with the exception of the first year where we will have a budget of 30.000 with the objective to create an initial brand advertising. One of our strongest strengths is our marketing and brand building capabilities, and the aggressive marketing budget is a reflection of the importance we attribute to our marketing activities. It is our hope to increase this budget should sales and efficiencies of scale allow us to do so.
Sales Direct Revenue Sales Revenue Brochures Cost (100,000) Site Cost Newspaper/Magazine Cost #months Advertising (20% ) Total Revenue
2011 2012 2013 2014 2015 299.379,97 329.317,97 362.249,77 398.474,74 438.322,22 247.404,28 272.144,71 299.359,18 329.295,10 362.224,61 -42.680,52 27.059,91 54.274,38 84.210,30 117.139,81 5.000,00 5.000,00 5.000,00 5.000,00 5.000,00 285,00 285,00 285,00 285,00 285,00 44.928,00 0,00 5.616,00 11.232,00 16.848,00 24 0 3 6 9 50.213,00 5.285,00 10.901,00 16.842,06 23.427,96 -92.893,52 21.774,91 43.373,38 67.368,24 93.711,85
7.5 Contingency Planning

This marketing plan is just that, a plan. Plans don't always work out and we have to be ready to deal with the likelihood that Doce Dieta won't make good on the projections outlined in this plan. We also have to prepare ourselves for overwhelming success. The following are some possible scenarios: Revenues exceed projections - A serious increase in revenues over projections will give us an opportunity to increase our marketing budget and possibly add an additional location increasing our market share. Revenues miss projections - We have to be prepared for this possibility. If we miss our projections, we need to attract more customers in order to achieve the forecast sales by doing price promotions and partnerships. The danger in this scenario is that the first reaction to missed projections is to decrease spending, particularly marketing expenses. We can't do that! We have to get our message out to the target market, and we can't do that if we stop spending on marketing. Additional capital infusions may become necessary and that possibility is detailed in the business plan.
8. Conclusion
Starbucks customers have been telling us that they want better tasting and healthier food options when they visit our stores said Sandra Stark, vice president, Food Category, Starbucks Coffee Company. Many people do not realize how many hidden calories can be in the average smoothie or restaurant salad. And no one wants to think theyre making a healthy choice just to realize theyve accidentally consumed half their days calories on a smoothie, said Katie Thomson, registered dietitian and senior nutritionist, Starbucks Coffee Company. People want food that tastes delicious, but the definition of healthy snacking is changing. People are asking what goes into their food, not just whether it is low-fat or low calorie, says Keith Ayoob, Ed. D., R.D. at Albert Einstein College of Medicine. We know that we can offer healthier food than any other competitor in our market and yet keep an emphases on taste and pleasure. Our study shows that our coffee shop concept is financially viable and profitable. Our conclusion is that this plan clearly motivates us to move forward to the next stage and that we can create this new brand and succeed!

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MARKETING PLAN

Florbela Pinto, 153010151

Jorge Oliveira, 153010142 |2

Lus Bentes 153010139

Florbela Pinto, 153010151

Jorge Oliveira, 153010142 |3

Lus Bentes 153010139

Florbela Pinto, 153010151

Jorge Oliveira, 153010142 |4

Lus Bentes 153010139

3.1 Company Analysis

existing offer consuming behaviors and preferences

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Jorge Oliveira, 153010142 |5

Lus Bentes 153010139

5) What is the acceptability of the brand name we proposed.

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Jorge Oliveira, 153010142 |6

Lus Bentes 153010139

3.3 Competitor Analysis

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3.5.2 Economic Factors

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Indicador de confiana dos consumidores INE, 28 de Outubro de 2010

Indicador de clima econmico , Fonte: INE

Florbela Pinto, 153010151

Jorge Oliveira, 153010142 | 10

Lus Bentes 153010139

3.6 SWOT Analysis

Present a description of the market segmentation as follows:

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Jorge Oliveira, 153010142 | 11

Lus Bentes 153010139

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Lus Bentes 153010139

Selected Marketing Strategy

Health a imply qu consequ

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Lus Bentes 153010139

Althoug increase awarene momen to all pe

What will distinguish our products from competitors?

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Muffins example: Most people enjoy warm muffins, especially for

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Lus Bentes 153010139

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6.3 Place location

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