Coffee Bar Marketing Plan

Colloquy Grog Shop

Executive Summary
Colloquy Grog Shop is a unique local bar/coffee/tapas house that provides a friendly,
effective place where singles can meet. Colloquy Grog Shop is not your typical bar where
people go to meet other singles. Colloquy Grog Shop has a unique service called the
structure conversation system that is quite effective for allowing singles to meet each other
and provide them with valuable insight into the other person through reflective
conversation.  The structured system provide an atmosphere that lowers inhibitions and
breeds confidence allowing singles to meet other singles and gain insight into their
personality by way of thoughtful discourse.

Meeting people is one of the largest hurdles 25-45 year old singles face.  Colloquy Grog
Shop provides this group with an effective solution to this problem. 

Situation Analysis
Colloquy Grog Shop has just begun business, and marketing is essential to its success and
future profitability.  The bar offers a place for people to meet in a comfortable, person-
meeting environment.  The basic market need is place where singles can meet new similar
people.  Colloquy Grog Shop uses a sophisticated conversation system to enhance and
facilitate singles meeting each other.

Market Summary
Colloquy Grog Shop possess good information about the market and knows a great deal
about the common attributes of the prized and loyal customers.  Colloquy Grog Shop will
leverage this information to better understand who is served, their specific needs, and how
the Grog Shop can better communicate with them.
 Market Analysis

Market Analysis

    2001 2002 2003 2004 2005  

Growt
Potential Customers           CAGR
h

Singles 9% 210,987 229,976 250,674 273,235 297,826 9.00%

Non-singles 7% 134,432 143,842 153,911 164,685 176,213 7.00%

Other 0% 0 0 0 0 0 0.00%

Total 8.23% 345,419 373,818 404,585 437,920 474,039 8.23%

Market Needs
Colloquy Grog Shop is a unique bar/coffee shop/tapas house that is organized to try to
facilitate new friendships.  The Grog Shop will offer a changing menu of tapas, microbrews,
and assorted coffee drinks in conjunction with a structured conversation system.  Colloquy
Grog Shop seeks to fulfill the following benefits that are important to their customers.

 Selection: a creative choice of food and drink and a well-constructed structured

conversation system.
 Accessibility: the patron will gain access to the Grog Shop with minimal waits and long
business hours.
 Customer service: the customer is ALWAYS right.
 Competitive pricing: all products will be competitively priced relative to the
competition.
Market Trends
The market trend is headed toward a more sophisticated customer.  The restaurant/bar
patron today is more sophisticated in a number of different ways:

 Food quality: the preference for higher-quality ingredients is being reinforced as

customers are being subjected to an increasing number of options.
 Quality conversation: patrons are recognizing intellectual conversations can be
had in bar settings and would prefer this over normal bar talk.
 Access to meeting people: people are tired of being single and are looking for
ways to meet like-minded individuals.
Create or edit
this chart

Market Growth
In 1999, the global bar/restaurant  market reached $24 billion dollars.  Alcohol sales are
estimated to grow by 9% for the next few years.  This growth can be attributed to several
factors.  The first factor is American's reliance on alcohol for socialization.  This factor is
intuitive as alcohol breaks down social inhibitions.

Another factor is the trend to eat and drink outside of the home.  This occurs as Americans
work longer and longer hours during the week.  Eating and drinking out is a convenience
that many are willing to pay for.  It also provides contact with more people.
 SWOT Analysis
The following SWOT analysis captures key strengths and weaknesses within the company
and describes the opportunities and threats facing the Grog Shop.

Strengths
 Strong relationships with third party vendors.
 Excellent staff who are highly trained and customer attentive.
 The structured conversation system.
Weaknesses
 The Grog Shop's limited brand equity.
 The struggle to continually have current and new conversation topics.
 A limited marketing budget to develop brand awareness.

Opportunities
 A growing market with a significant percentage of the of the target market still unaware of
the Grog Shop.
 Increasing sales opportunities as people become familiar with the advantages of the
structured conversation system.
 The ability to lower variable costs through efficiency gains.

Threats
 Competition from taverns.
 Competition from other sources of singles meeting events.
 A slump in the economy which will decrease discretionary spending.

Competition
The competition comes from several different sources.

Bars
There are many different types of bars or taverns.  Some are better than others for meeting
people, however, none of them have the business mission to bring together singles.

Coffee Shops
Coffee shops are typically an easy-going social setting that does lend itself for people to
meet others.  Conversations occur in part because of the historical underpinning of coffee
houses, in part by virtue of the fact that the background music is not blaring. Coffee shops
rarely have any type of organized activities to bring singles together.

Other Events/Activities Aimed at Bringing Together Singles.

One activity/phenomenon that has started in New York City and moved to a few other
larger cities (not including Portland) is an activity that has a long rectangular table that
always has one seat opposing the other.  People sit down with females on one side and
males on the other (this seating arrangement is for heterosexual gatherings) and will have
a limited number of minutes (usually 10) to chat. Typically, conversations can be about
anything, however you are not to reveal the job/profession that you are involved in,
beyond that, anything is fair game.  The table rotates and you end up speaking with a lot of
different people.  You then create a list of the top five that you would like to speak with
again and if the matching person also has you on their list, phone numbers are released to
the two people.  Another activity might be some sort of outdoor activity like hiking or
rafting and it is organized as a singles event.  There are also other type of singles events,
too numerous to mention.  Lastly, there are resources like personal sections in local papers
where people can post or respond to personal advertisements.

Every person has their own method of meeting people, some more useful than others. 
Colloquy Grog Shop predicts singles will abandon, or at least supplement, their current
method of meeting people with the Grog Shop's activities as they are thoughtfully designed
to achieve the goal of introducing like-minded individuals. 

Product Offering
Colloquy Grog Shop sells the following:

Eight Microbrews on Draft and Bottled

Alcohol, specifically beer, is served for two reasons.  One, alcohol reduces inhibition,
making it easier for people to meet and interact with new people.  Two, and more
importantly, beer, particularly draft beer generates wonderful profits.  Microbeers are
chosen because microbrews are of higher quality than large production beers and our
target segment prefers higher-quality beer.

Espresso, Cappuccino, Coffee, and other Coffee/Espresso drinks.

Coffee and coffee-related drinks are hugely popular, particularly in the Pacific Northwest. 
Northwesterners expect good coffee/espresso at most food/drink establishments and it is
often associated with good conversation.

An Assortment of Tapas
Tapas are chosen because they can be relatively easy to make, the offerings can be changed
frequently, and tapas are more community orientated, meaning they are designed for a
table/multiple people to share.  This reinforces Colloquy Grog Shop mission of bringing
new people together.

The service offerings are based on a system for singles to meet new people.  This is
accomplished through a structured conversation system.  The Grog Shop is divided into
two sections, one smaller section of tables that is for people meeting people that they
already know.  The other, larger section is the section of tables for singles to come and meet
new people.  This section is composed of 4-top tables (table seating for four) where a
 customer will come and sit down at the table among other people.  The table will be
marked with a topic of conversation in the center.  Throughout the evening as there is
turnover of the table or the conversation is exhausted, the server will introduce a new
topic. The topics of conversation are far reaching, some are recent news or sports, while
others are intellectual, and some are philosophical.  The bulk of the topics will be of the
latter varieties as people that are interested in meeting people through the conduit of
conversation will typically prefer heavier stuff to provide more insight into that person.

If you ask a majority of single 25-45 year olds, most will say they have difficulty meeting
new people.  Regular bars are not an ideal place to meet people because beyond their visual
image, it is quite difficult to learn anything material about the person to determine if there
are some commonalities. The typical bar has loud music and is not geared up for serious
conversation.  Bars are also less than ideal to meet people because of the uncertainty or
ambiguity when meeting new people at a bar.  Many people feel uncomfortable in
situations where they are not sure how to act. The ideal situation to meet someone is
during an activity that is mutually enjoyed, whether it is at an art museum or mountain
biking in the Cascade Range.

Colloquy Grog Shop creates a setting in a bar/coffee shop that encourages thoughtful
conversation, allowing patrons to gain insight into the other singles.  The key to the
conversation system is structure.  The rules are clearly established.  Singles sit down at
specific tables and discuss the assigned topic of conversation.  Everyone at these tables are
single and looking to meet new people.  The conversation is used to elicit insight into the
other person, their values and perspectives as well as implicit and sometimes explicit
insight to their background and past. 

The structured conversation system is successful because it reduces ambiguity or

uncertainty in the singles social scene allowing people to feel more comfortable in the
setting and open up more to new people.  Additionally, for intellectually minded people, it
allows them to find people with similar interests, whether the similarity is based in the
topic of conversation or more generally in conversation itself.

Keys to Success
 Attracting customers who find value in the Grog Shops offering and who will frequent the
Shop regularly in order to meet like-minded single people.
 Excellent customer service.
 Maintaining a cost of goods on foods at below 50%.

Critical Issues
The Grog Shop is still in the speculative stage as a retail operation.  Its critical issues are: to
continue to take a moderate fiscal approach to business operations and to build brand
awareness which will drive customers to the Grog Shop.
 Mission
Colloquy Grog Shop's mission is to provide a neighborhood bar/coffee shop where single
people can meet.  We exist to attract and maintain customers.  When we adhere to this
maxim, everything else will fall into place.  Our services will exceed the expectations of our
customers.  

Marketing Objectives
 Develop brand awareness through a steady, month to month increase of new customers.
 Develop an increase in sales while achieving a status quo state or  decrease in marketing
expenses.
 Develop awareness of the structured conversation system measured by customers coming
to the Grog Shop solely for meeting people.

Financial Objectives
 A double digit growth rate for each future year.
 Reduce the variable costs through efficiency gains.
 Reach profitability within the first year.

Target Markets
Colloquy Grog Shop's customers can be broken down into two groups, singles, and non-
singles.  The non-singles groups are smaller than the singles groups by virtue of the fact
that if you are meeting someone whom you already know, the two of you can come up with
the topic of conversation yourself, therefore, Grog Shop offers this group less value.  The
demographics for the non-singles is similar to the singles, to be listed below.  The larger
group then is the singles.  The demographics of the singles are:

 Single: self evident.
 Professional: this characteristic is intuitive since the underlying element of Colloquy
Grog Shop is thoughtful conversation, and most professionals appreciate thought-provoking
conversation.
 Income over $40,000: this to a large degree is correlated to the fact that they are
professional.
 Age 25-45: the largest group of singles looking for companions.
Positioning
The Colloquy Grog Shop will position itself as a reasonably priced tapas/bar/coffee house
that has an innovative, effective system for allowing single to meet each other.

The Colloquy Grog Shop's positioning will leverage their competitive edge:

 A unique approach to getting singles together called the structured conversation system. 
This system was detailed in the Product and Services section, please refer to that section for
more information. 
 This system is a competitive edge because most bars/taverns do not have a niche that they
are concentrating on.  While every bar or coffee shop has a certain "flavor" and that is why someone
will choose one bar or another, the flavor is only surface deep.  The business model of the
establishment is to sell alcohol and provide a social setting.  Beyond these two values, there is little
other genuine value that the establishments try to provide. 
 Colloquy Grog Shop is distinguished by the fact that their business model concentrates on
developing value for  customers beyond serving drinks.  The Grog Shop develops an effective, albeit
inherently structured, social setting that encourages meeting like-minded individuals.  Providing
the drinks is the source of income, an ancillary part of the business model.  Generating value for the
customers is the main focus, if the customers are happy then the revenue will follow (assuming of
course that proper marketing and financial controls are employed).  Concentrating on the client's
needs beyond serving alcohol is the distinguishing characteristic that will allow Colloquy Grog
Shop to rapidly gain market share.

Strategies
The single objective is to position the Colloquy Grog Shop as the premier place for young
professional singles to meet like-minded individuals.  The marketing strategy will seek to
first create customer awareness regarding their services offered, develop that customer
base, and work toward building customer loyalty and referrals.

The message Colloquy Grog Shop will seek to communicate is that The Grog Shop is THE
place to meet intelligent singles.  This message will be communicated through a variety of
methods.  The first method will be advertisements.  The bulk of the advertisements will be
in the Willamette Weekly, a weekly entertainment guide in Portland that has impressive
readership numbers for the desired target population.

Another method will be through establishing strategic relationships with companies that
have similar demographics such as the Multnomah Athletic Club.  Establishing a mutually
beneficial relationship will allow both organizations to develop visibility for each other.

The other form of advertising will be using "grassroots" methods where customers will be
given coupons for their friends to try Colloquy Grog Shop for the first time.  The coupon
will be an economic incentive for the newcomer to try Colloquy Grog Shop.  The coupon
also has the added force of a referral from a friend.

Marketing Mix
Colloquy Grog Shop's marketing mix is comprised of these following approaches to pricing,
distribution, advertising and promotion, and customer service.

 Pricing: the pricing scheme is based on standard industry practices.

 Distribution: all services and products will be distributed from Colloquy Grog Shop's
retail space.
 Advertising and promotion: the most successful advertising will be with
Willamette Weekly.  Additionally, strategic relationships will be developed with companies such as
Multnomah Athletic Club as well as use of a grassroots promotion system.
 Customer service: obsessive customer attention is the mantra.  The Grog Shop's
philosophy is to do whatever needs to be done to impress the customer.  While this could reduce
short-term profits, it will strengthen long-term profitability.
Marketing Research
During the initial phases of the marketing plan development, several focus groups were
held to gain insight into a variety of likely customers.  These focus groups provided useful
insight into the decision making process of these consumers.

An additional source of dynamic market research is a feedback system based on a

suggestion card system.  The suggestion card has several statements that patrons are asked
to rate in terms of a given scale.  There are also several open ended questions that allow the
customer to freely offer constructive criticism or praise.  The Grog Shop will work hard to
implement reasonable suggestions in order to improve their service offerings as well as
show their committment to the customer that their suggestions are valued.

The last source of market research will be competitive analysis.  This will be done by
regularly visiting competitors and analyzing their service offerings.

Break-even Analysis
The Break-even Analysis indicates that $30,237 will be needed in monthly revenue to reach
the break-even point.

Implementation
The following milestones identify key marketing programs.  It is important to accomplish
each one on time and on budget. 

Milestones

Create or edit this table

Milestones

           

Advertising Start Date End Date Budget Manager Department

Marketing plan completion 1/1/2001 2/1/2001 $0 Karen Department

Advertising 1/1/2001 1/1/2004 $9,600 Karen Department

Strategic relationships 1/1/2001 1/1/2004 $4,400 Karen Department

Grassroots promotion 1/1/2001 1/1/2004 $4,800 Karen Department

Name me 1/1/2003 1/15/2003 $0 ABC Department

Name me 1/1/2003 1/15/2003 $0 ABC Department

Name me 1/1/2003 1/15/2003 $0 ABC Department

Name me 1/1/2003 1/15/2003 $0 ABC Department

Name me 1/1/2003 1/15/2003 $0 ABC Department

Other 1/1/2003 1/15/2003 $0 ABC Department

Total Advertising Budget     $18,800    

PR Start Date End Date Budget Manager Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Other 1/1/2006 1/15/2006 $0 ABC Department

Total PR Budget     $0    

Direct Marketing Start Date End Date Budget Manager Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Other 1/1/2006 1/15/2006 $0 ABC Department

Total Direct Marketing Budget     $0    

Web Development Start Date End Date Budget Manager Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Other 1/1/2006 1/15/2006 $0 ABC Department

Total Web Development Budget     $0    

Other Start Date End Date Budget Manager Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Name me 1/1/2006 1/15/2006 $0 ABC Department

Other 1/1/2006 1/15/2006 $0 ABC Department

Total Other Budget     $0    

Totals     $18,800    

Contingency Planning
Difficulties and risks:
 Problems generating visibility and awareness of the Grog Shop.
 An entry into Portland of the "conversation roundtables" or other single meeting events.
 Lower than forecasted consumption of alcohol.
Worst case risks may include:

 Determining that the business cannot support itself on an ongoing basis.

 Having to liquidate equipment to cover liabilities.
Sales Forecast

Create or edit this table

Contribution Margin

Create or edit this table

Break-even Analysis

Create or edit this table

Break-even Analysis

   

Monthly Revenue Break-even $20,299

   

Assumptions:  

Average Percent Variable Cost 32%

Estimated Monthly Fixed Cost $19,654

Sales Forecast
The first two months will be used to set up the physical location, hire personnel, establish
vendor relationships and obtain an alcohol license.  The third month will be the grand
opening.  Business during the second month will be understandably slow as a steady
customer base takes time to build.  By month four it is forecasted that sales will steadily
grow. 

Create or edit
this chart

Sales Forecast

Create or edit this table

Sales Forecast

  2001 2002 2003

Sales      

Drinks $105,921 $271,254 $296,874

Food $69,908 $179,028 $195,937

Total Sales $175,829 $450,282 $492,811

       

Direct Cost of Sales 2001 2002 2003

Drinks $26,480 $67,814 $74,219

Food $29,361 $75,192 $82,293

Subtotal Direct Cost of Sales $55,842 $143,005 $156,512

Expense Forecast
Marketing expenses are budgeted to remain fairly steady throughout the year.  There will
be an initial ramp up of spending to generate visibility.  After this ramp up advertising will
be fairly consistent month to month.

Create or edit
this chart

Marketing Expense Budget

Create or edit this table

Marketing Expense Budget

  2001 2002 2003

Advertising $4,800 $2,400 $2,400

Strategic relationships $2,000 $1,200 $1,200

Other $2,400 $1,200 $1,200

  ------------ ------------ ------------

Total Sales and Marketing Expenses $9,200 $4,800 $4,800

Percent of Sales 5.23% 1.07% 0.97%