Marketing Plan for INTERNET CAF ” ES IN Indictable Of Contents 1 Executive Summary 22 Situation Analysis 32. 1 Market Summary 42. 1. 1 Market Demographics 52. 1. 2 Market Needs 62.
1. 3 Market Trends 72. 1. 4 Market Growth 92. 2 SWOT Analysis 102. 3 Competition 142.
4 Services 142. 5 Keys to Success 162. 6 Critical Issues 162. 7 Macro Environment 173. 0 Marketing Strategy 173. 1 Mission 183.
2 Marketing Objectives 193. 3 Financial Objectives 203. 4 Target Marketing 203. 5 Positioning 223.
6 Strategy Pyramids 223. 7 Marketing Mix 243. 7. 1 Services and Service Marketing 243. 7. 2 Pricing 243.
7. 3 Promotion 253. 7. 4 Service 263. 8 Marketing Research 274. 0 Financials, Budgets, and Forecasts 274.
1 Break-even Analysis 284. 2 Sales Forecast 294. 3 Expense Forecast 304. 4 Linking Sales and Expenses to Strategy 324. 5 Contribution Margin 335. 0 Controls 345.
1 Implementation Milestones 355. 2 Marketing Organization 365. 3 Contingency Planning 37 Executive Summary The goal of this marketing plan is to outline the strategies, tactics, and programs that will make the sales goals outlined in this Internet Cafe business plan a reality in the year 2003 in few states in India. This plan is for Indian Markets only. Internet Cafe, unlike a typical cafe, provides a unique forum for communication and entertainment through the medium of the Internet.
Internet Cafe is the answer to an increasing demand. The public wants: (1) access to the methods of communication and volumes of information now available on the Internet, and (2) a place to socialize and share these experiences with friends and colleagues. Marketing will play a vital role in the success of Internet Cafe. Internet Cafe must build a brand around the services it offers by heavily promoting itself through local television, radio, and print advertising. Marketing efforts are just beginning by the time a potential customer enters Internet Cafe for the first time.
The Business plan on Internet cafe
... kind of business. The owners or managers of internet cafes should never run out of marketing strategies in mind to keep customers coming. The ... Internet cafe owners are also keeping up with the market trend. If these cafes were previously known as just internet shops being just providers of internet services, ...
A strong emphasis will be put on keeping customers and building brand loyalty through programs focused on staffing, experience, and customer satisfaction. Target markets include: o Students from nearby housing centers. o Business people from the downtown business centers and professional buildings. o Seniors from nearby retirement facilities.
o Family members – People who have relatives abroad. This group is very large in few states in India especially states like Kerala where minimum one member from each family living abroad. Situation Analysis Internet Cafe opened its doors for business a little over a year ago. Business is good, and customers have been impressed with our offerings, but we need to focus our efforts on implementing the strategies, programs, and tactics outlined in the original business plan. Differentiating ourselves from other more traditional cafes has given us the ability to effectively compete on the beverage and pastry side of the business with the already entrenched competition. Sales are brisk and in-line with projections.
The Internet services side of the business is rapidly being accepted by the local community. Memberships are meeting the projections outlined in the business plan, and sales of Internet services are meeting the goals forecast. Students love to gather for late-night sessions, nearby seniors are getting a glimpse of what the Internet offers and local business people love to stop by for a quick bite and an email check. Market Summary Internet Cafe is faced with the exciting opportunity of being the first-mover in the local cyder-cafe market. The consistent popularity of coffee / tea , combined with the growing interest in the Internet, has been proven to be a winning concept in other markets and will produce the same results here. All three target markets for the Internet Cafe service are growing at a relatively fast pace.
The Business plan on Internet cafe 3
All the hardware or devices need to be connected each other to the Local Area Networking (LAN), to enable them share one internet line to get connected to the Internet. This is a basic idea on how to connect all your hardware to the LAN. Connecting the Computers All PCs have to connect to the switch/hub, which are merge as a LAN. A local area network (LAN) is a group of computers and associated ...
We ” re faced with a large number of potential customers, and we ” re offering a needed service. Target Market Growth: o University students continue to grow at a steady pace, at nearly 7-10% o Office workers in the downtown area and nearby professional buildings continue to add value, growing at 8% o Seniors are becoming an important part of downtown business, growing at almost 7% o Teens continue to play a major role in downtown foot-traffic, growing at 2%o The number of people going abroad is growing at 4%Office workers – I have clubbed both workers group with people who have family members abroad. University Students – School / university students. Most of the states in India provide almost free education Market Demographics Internet Cafe’s customers can be divided into two groups. The first group is familiar with the Internet and desires a progressive and inviting atmosphere where they can get out of their offices or homes to enjoy a great cup of coffee / tea and Internet access.
This group is made up of students from the University of Oregon and business people from nearby downtown offices and professional centers. The second group is not as familiar with the Internet. Seniors represent a growing segment of Internet users. They use the Internet to communicate with friends and family and they will be regular users of the Internet Cafe service. Looking into the facts like 1) More family members are going abroad 2) Owning a computer is very expensive, more family members will get attracted to Internet cafes. Market Needs Factors, such as addiction, and historical sales data ensure that the high demand for coffee / tea will remain constant over the next five years.
The rapid growth of the Internet and online services that has been witnessed worldwide is only the beginning of a long-lived trend towards an economy built on the infrastructure of the Internet. The potential growth of the Internet is enormous, to the point where one day, a computer terminal with an online connection will be as common and necessary as a telephone or toilet. This may be 5 or 10 years down the road, but for the next five years, the online service provider market is sure to experience tremendous growth. Establishing itself as the first cyder-cafe in the area, Internet Cafe will enjoy the first-mover advantages of name recognition and customer loyalty.
The Business plan on Carribean Internet Cafe
Caribbean Intern Cafe Date: November 14, 2012 1. There are many issues that Mr. Grant should consider before proceeding with the CIC. There are several things that Mr. Grant should examine before even looking at the projections given to him. Total capital is $2,250,000, $1,000,000 in investments and $1,250,000 in the form of a long-term loan. $1,573,000 is immediately spent leaving $677,000. If he ...
Initially, Internet Cafe will hold a 100 percent share of the cyder-cafe market locally. In the next five years, competitors will enter the market. Internet Cafe has set a goal to consistently maintain a market share of greater than fifty percent. Market Trends The Internet has become a point of conversation in almost all social groups.
People are talking about sites they visited, business people are talking about Internet-based businesses, and kids are talking about the latest Internet clubs and chat rooms. People like to communicate their Internet experiences with their friends, colleagues, and family. However, it can be difficult to do it in front of a computer terminal at the office or in the family study. A comfortable place to gather and share these experiences is becoming a real need. Internet Cafe will provide: o A meeting place for business people interested in sharing their Internet-based business ideas. o A social hub for students and young people interested in sharing a beverage and their Internet experiences with friends.
o A place for nearby seniors to gather and learn about the powers of the Internet and better communication methods. o A stopping point for travelers in need of an Internet connection. o Meeting (email, chat or conference) place for family members. A market survey was conducted in 2001.
Key questions were asked of fifty potential customers. Some key findings include: o 35 subjects said they would be willing to pay for access to the Internet. o $1. 50 an hour was the most popular hourly Internet fee. o 24 subjects use the Internet to communicate with others on a regular basis.
Office workers – I have clubbed both workers group with people who have family members abroad. University Students – School / university students. Most of the states in India provide almost free education Market Growth The market for the services Internet Cafe will offer is growing rapidly. The cyder-cafe hasn’t come to many of the areas yet, but similar services are growing rapidly on a global scale. Large cities that cater to large numbers of traveling business people and tourists have been saturated with businesses offering the services Internet Cafe will offer.
Business people use the Internet services to catch up on email and communications with their family, and tourists do the same. Our area supports a population that has many of the same needs and interests of this larger group. Most of the states in India offer free education right from school level to graduation level. Students tend to have money and an interest in up-scale social centers. Internet Cafe will advertise with radio and TV spots on local stations. SWOT Analysis The SWOT analysis provides us with an opportunity to examine the internal strengths and weaknesses Internet Cafe must address.
The Essay on Internet Cafe or Cyber Cafe
... of this, demand for internet service has grown tremendously. TECHNICHAL ASPECT : Gaddy’s internet cafe is a place where ... An internet cafe or cybercafe is a place which provides internet access to the public, ... CHAPTER 2 CHAPTER 3 METHODOLOGY : MARKET ASPECT : The Internet-services side of the business is rapidly ... the proposed business will provide benefits to people as well as to the government. ...
It also allows us to examine the opportunities presented to Internet Cafe as well as potential threats. Internet Cafe has a valuable inventory of strengths that will help it succeed. These strengths include: a knowledgeable and friendly staff, state-of-the-art computer hardware, and a clear vision of the market need. Strengths are valuable, but it is also important to realize the weaknesses Internet Cafe must address. These weaknesses include: a dependence on quickly changing technology, and the cost factor associated with keeping state-of-the art computer hardware. Internet Cafe’s strengths will help it capitalize on emerging opportunities.
These opportunities include, but are not limited to, a growing population of daily Internet users, and the growing social bonds fostered by the new Internet communities. Threats that Internet Cafe should be aware of include, the rapidly falling cost of Internet access, and emerging local competitors. Strengths 1. Knowledgeable and friendly staff. We ” ve gone to great lengths at Internet Cafe to find people with a passion for teaching and sharing their Internet experiences. Our staff (male & female) is both knowledgeable and eager to please.
2. State-of-the art equipment. Part of the Internet Cafe experience includes access to state-of-the-art computer equipment. Our customers enjoy beautiful flat-screen displays, fast machines, camera, speakers, mike and high-quality printers. 3. Up-scale ambiance.
When you walk into Internet Cafe, you ” ll feel the technology. High backed mahogany booths with flat-screen monitors inset into the walls provide a cozy hideaway for meetings and small friendly gatherings. Large round tables with displays viewable from above provide a forum for larger gatherings and friendly ‘how-to’ classes on the Internet. Aluminum track lighting and art from local artists sets the mood. Last, but not least, quality cappuccino / tea machines and a glass pastry / snacks display case provide enticing refreshments. 4.
The Essay on Sustainability of Internet Cafe
... down to smallest detail. Internet Cafe, often called Cyber Cafe, is a place that offers customers hi-speed internet access, other computer services and variety of PC ... not just daily. You can connect with literally hundreds of people on social networking sites like MySpace, Facebook or twitter. Email, ...
Clear vision of the market need. Internet Cafe knows what it takes to build an upscale cyder cafe. We know the customers, we know the technology, and we know how to build the service that will bring the two together. Weaknesses 1. A dependence on quickly changing technology. Internet Cafe is a place for people to experience the technology of the Internet.
The technology that is the Internet changes rapidly. Product life cycles are measured in weeks, not months. Internet Cafe needs to keep up with the technology because a lot of the Internet Cafe experience is technology. 2. Cost factor associated with keeping state-of-the-art hardware.
Keeping up with the technology of the Internet is an expensive undertaking. Internet Cafe needs to balance technology needs with the other needs of the business. One aspect of the business can’t be sacrificed for the other. Opportunities 1. Growing population of daily Internet users.
The importance of the Internet almost equals that of the telephone. As the population of daily Internet users increases, so will the need for the services Internet Cafe offers. In India telephone calls to abroad are very expensive. So using internet to chat, mail or speak (using IP telephony) will be much cheaper.
2. Social bonds fostered by the new Internet communities. The Internet is bringing people from across the world together unlike any other communication medium. Internet Cafe will capitalize on this social trend by providing a place for smaller and local Internet communities to meet in person. Internet Cafe will grow some of these communities on its own by establishing chat areas and community programs. These programs will be designed to build customer loyalty.
Threats 1. Rapidly falling cost of Computer/Internet access. The cost of access to the Internet for home users is dropping rapidly. Internet access may become so cheap and affordable that nobody will be willing to pay for access to it. Internet Cafe is aware of this threat and will closely monitor pricing. Also the hardware cost also dropping rapidly because better capacity machines are getting introduced to the market almost everyday.
The Business plan on Customer Service Essay
Excellence in customer service is the objective of all organisations wishing to be successful. However, there is often a gap between customer expectations and management perceptions of customer expectations. Organisations often fail to get close to their customers and correctly read their expectations. Customers expect certain things when they walk into a business, and those with the highest level ...
This will inspire people to buy less costly machines just for internet access. 2. Emerging local competitors. Currently, Internet Cafe is enjoying a first-mover advantage in the local cyder-cafe market. However, additional competitors are on the horizon, and we need to be prepared for their entry into the market.
Many of our programs will be designed to build customer loyalty, and it is our hope that our quality service and up-scale ambiance won’t be easily duplicated. Competition The dual product / service nature of Internet Cafe’s business faces competition on two levels. Internet Cafe competes not only with coffee / tea retailers, but also with Internet service providers. The good news is that Internet Cafe does not currently face any direct competition from other cyder cafes in most of the rural and some part of the urban market. Heavy competition between coffee / tea retailers creates an industry where all firms face the same costs. There is a positive relationship between price and quality of coffee / tea .
Some coffees / tea retail at $6/kg, while other more exotic beans may sell for as high as $10/kg. Wholesalers sell beans to retailers at an average of a 50% discount. And as in most industries, price decreases as volume increases. Services Internet Cafe will provide its customers with full access to the Internet and common computer programs and equipment. Some of the Internet and computing services available to Internet Cafe customers are listed below: o Access to external POP 3 email accounts. o Customers can sign up for a Internet Cafe email account.
This account will be managed by Internet Cafe servers and accessible from computer systems outside the Internet Cafe network. o FTP, Telnet, Gopher, and other popular Internet utilities will be available. o Access to Netscape or Internet Explorer browsers. o Access to laser and color printing.
o Access to popular software applications, like Adobe Photoshop and Microsoft Word. Internet Cafe will also provide its customers with access to introductory Internet and email classes. These classes will be held in the morning and late in the evening. By providing these classes, Internet Cafe will build a client base familiar with its services.
The computers, Internet access, and classes wouldn’t mean half as much if taken out of the environment Internet Cafe will provide. Good coffee, specialty drinks, bakery goods, and a comfortable environment will provide Internet Cafe customers with a home away from home; a place to enjoy the benefits of computing in a comfortable and well kept environment. Keys to Success The keys to the success for Internet Cafe are: o The creation of a unique, innovative, upscale atmosphere that will differentiate Internet Cafe from other local coffee shops and future Internet cafes. o The establishment of Internet Cafe as a community hub for socialization and entertainment.
o The creation of an environment that won’t intimidate the novice user. Internet Cafe will position itself as an educational resource for individuals wishing to learn about the benefits the Internet has to offer. o Great coffee / tea and bakery / snacks items. Critical Issues The risks involved for Internet Cafe are: o Will there be a continuing demand for the services offered by Internet Cafe? o Will the popularity of the Internet continue to grow, or is the Internet a fad? o Will individuals be willing to pay for the services Internet Cafe offers? o Will the cost of accessing the Internet from home drop so significantly that there will not be a market for Internet Cafes such as Internet Cafe? Macro Environment The retail coffee / tea industry in India experienced rapid growth. On average an Indian drinks 3-4 coffees / teas a day. The popularity of the Internet is growing exponentially.
Those who are familiar with the information superhighway are well aware of how fun and addicting surfing the Internet can be. Those who have not yet experienced the Internet need a convenient, relaxed atmosphere where they can feel comfortable learning about and utilizing the current technologies. Internet Cafe seeks to provide its customers with affordable Internet access in an innovative and supportive environment. Marketing Strategy Internet Cafe has three main strategies.
The first strategy focuses on attracting novice Internet users and people whose family members are living abroad. By providing a novice-friendly environment, Internet Cafe hopes to educate and train a loyal customer base. The second and most important strategy focuses on pulling in power Internet users. Power Internet users are extremely familiar with the Internet and its offerings. This group of customers serves an important function at Internet Cafe. Power users have knowledge and web-browsing experience that novice Internet users find attractive and exciting.
The third strategy focuses on building a social environment for Internet Cafe customers. A social environment that provides entertainment will serve to attract customers that wouldn’t normally think about using the Internet. Once on location at Internet Cafe, these customers that came for the more standard entertainment offerings, will realize the potential entertainment value the Internet can provide. Mission Internet Cafe has one purpose. Internet Cafe provides communities with the ability to access the Internet, enjoy a cup of coffee / tea , and share Internet experiences in a comfortable environment.
Internet Cafe’s marketing will consistently build on this mission. Everything we do, from the pricing structure for our services to the ambiance we create, must be done with this mission in mind. We cater to: workers, people who have family members living abroad, traveling business people, school / university students, and seniors. Our ambiance and our services are designed for this clientele and our marketing efforts are focused on capturing this market.
Marketing Objectives Internet Cafe’s marketing objectives for the first three years of operation include: o Grow total sales by 10% annually. o Diversify the service offering to insulate the business against fluctuations in any one component of the revenue stream. o Build customer loyalty through educational programs. o Maintain a staff of enthusiastic employees excited to share their Internet knowledge with Internet Cafe customers. o Build the Internet Cafe brand to the point where it becomes a household word in the area.
Financial Objectives The goal of this marketing plan is to outline the marketing strategies, tactics, and programs that will make the vision outlined in the Internet Cafe business plan a reality in the year 2003. The vision outlined in the business plan includes sales of roughly $275, 000 in the first year with that figure increasing 10% annually. Target Marketing Internet Cafe intends to cater both to people who want a guided tour of the Internet and to experienced users eager to indulge their passion for computers in a social setting. Furthermore, Internet Cafe will be a magnet for local and traveling professionals who desire to work or check their email messages in a friendly atmosphere.
These professionals will either use Internet Cafe’s PCs, or plug their own notebook computers into Internet connections. Internet Cafe’s target market covers a wide range of ages: from members of ‘Generation X,’ who grew up surrounded by computers, seniors, females, kids to illiterate people (Kerala state in India has 100% literacy – may be the only state in the world. ) Our primary target markets include: o Students. The large student population will become an important part of the Internet Cafe customer base. The student population continues to grow. Evening entertainment, access to the Internet, and the up-scale ambiance will attract this demographic.
o People who have family members abroad. Most of the people in India are keen to get employment abroad. Especially states like Kerala, Tamil Nadu, Karnataka and Andra Pradesh. Statistics shows that almost one member from each house is abroad in Kerala.
Population is very high here. Literacy is very high on these states. o Business people. The business community is growing rapidly with the addition of a new Compu-tech building and a flurry of new professional centers. Internet Cafe will provide a perfect setting for business meetings.
It will also give traveling business people an opportunity to plug their laptops into the Internet Cafe network to check email communications. o Seniors. Represent a growing population of Internet users. Internet Cafe will target the seniors by offering ‘ Introduction to the Internet’ classes.
The Internet Cafe staff will hold brief classes in the off hours to educate seniors on how to use the Internet to communicate with friends and family. This will build a regular base of customers that wouldn’t typically use the services offered by Internet Cafe. Positioning Internet Cafe will position itself as an upscale coffee house and Internet service provider. Business people of all types will use Internet Cafe as a place to hold meetings and catch-up on email communications.
Students from nearby housing centers will use Internet Cafe as a place to socialize and discuss the latest Internet sites. Seniors will experience the Internet for the first time at Internet Cafe. Programs designed to teach newcomers about the power of the Internet will help build customer loyalty and spread the word about the services Internet Cafe offers. Strategy Pyramids The following are the three key strategies Internet Cafe will focus on: Internet Cafe’s first strategy focuses on attracting novice Internet users.
Internet Cafe plans on attracting these customers by: o Providing a novice-friendly environment. Internet Cafe will be staffed by knowledgeable employees focused on serving the customer’s needs. o A Customer Service desk will always be staffed. If a customer has any type of question or concern, a Internet Cafe employee will always be available to assist. o Internet Cafe will offer introductory classes on the Internet and email. These classes will be designed to help novice users familiarize themselves with these key tools and the Internet Cafe computer systems.
Internet Cafe’s second strategy will be focused on attracting power Internet users who will provide an important function at Internet Cafe. Internet Cafe plans on attracting this type of customer by: o Providing the latest in computing technology. o Providing scanning and printing services. o Providing access to powerful software applications.
The third strategy focuses on building a social environment for Internet Cafe customers. A social environment that provides entertainment will serve to attract customers that wouldn’t normally think about using the Internet. Once on location at Internet Cafe, these customers that came for the more standard entertainment offerings will realize the potential entertainment value the Internet can provide. Marketing Mix Internet Cafe’s marketing efforts will focus on building a loyal base of customers that will use the services provided on an almost daily basis. Services and Service Marketing As the popularity of the Internet continues to grow at an exponential rate, easy and affordable access to the information superhighway is quickly becoming a necessity of life. Internet Cafe provides the local community with the ability to access the Internet, enjoy a cup of coffee, and share Internet experiences in a comfortable environment.
People of all ages and backgrounds will come to enjoy the unique, upscale, educational, and innovative environment that Internet Cafe provides. Pricing Internet Cafe bases its prices for coffee / tea and specialty drinks on the ‘Retail Profit Analysis’ provided by our supplier, Nestle or Lipton. These companies are in the coffee business for many decades and has developed a solid pricing strategy. Determining a fair market, hourly price for online use is more difficult because there is no direct competition from another cyder-cafe in that area. Therefore, Internet Cafe considered three sources to determine the hourly charge rate.
First, we considered the cost to use other Internet servers, whether it is a local networking firm or a provider such as VSNL, Satyam etc. Internet access providers use different pricing schemes. Some charge a monthly fee, while others charge an hourly fee. In addition, some providers use a strategy with a combination of both pricing schemes. Thus, it can quickly become a high monthly cost for the individual. Second, Internet Cafe looked at how cyder-cafes in other markets went about pricing Internet access.
Third, Internet Cafe used the market survey conducted in 2001. Evaluating these three factors resulted in Internet Cafe’s hourly price of $2. 50. Promotion Internet Cafe will spend almost fifty thousand dollars in its first year of operations to build a brand and a loyal customer base. Marketing efforts will be focused on the local market, and the campaign will run the entirety of 2003, increasing roughly 10% per year to match increased sales revenue. The marketing budget will consistently equal almost 20% of sales.
A Few Specific Marketing Efforts: o Local TV spots o Print Materials o Local Newspapers o Local Radio Spots o Internet Cafe Events Service This topic is a critical reminder of the fact that Internet Cafe is a service business. The success of our business depends upon the quality of the service we offer and delivering that service consistently. Internet Cafe is dedicated to delivering this quality service. Dedicated to Quality Service Programs: o We ” ve gone to great lengths at Internet Cafe to find people with a passion for teaching and sharing their Internet experiences. Our staff is both knowledgeable and eager to please. An excess of staff members will consistently be on hand to provide service to Internet Cafe customers.
Performance will be frequently evaluated both internally and through customer surveys. o A highly valued member of the Internet Cafe staff will be the ‘Customer Happiness Representative.’ This individual will be available forty hours a week to monitor the level of happiness amongst Internet Cafe customers. This individual will be responsible for: developing customer satisfaction programs, monitoring happiness levels, responding to customer concerns, and the general well being of every Internet Cafe customer. Marketing Research In 2001, a market survey was conducted to help evaluate the business viability prior to its inception. The survey was a valuable resource for establishing pricing and market needs.
We will continue to conduct a survey of our customers and potential customers on an annual basis. Survey results will be used to create new marketing programs and monitor the performance of current marketing programs. Financials, Budgets, and Forecasts The marketing plan is built on these truths: 1. The marketing budget is based on a percentage of sales value. Currently, that value is set at 20%. 2.
Building a strong brand and brand loyalty is critical to the success of Internet Cafe. 3. Marketing is a critical component of the Internet Cafe business plan. 4. The relationship between marketing dollars spent and revenues generated is positive only to a certain point.
We don’t feel that a marketing budget based on 20% of sales is close to that point where additional marketing dollars spent won’t create additional revenue. If we can manage, we plan to spend more than 20% of sales on marketing in future years. However, we want to keep this relationship in mind as we consider spending more on marketing efforts. 5. Our understanding of the need for strong branding and emphasis on marketing gives us a competitive edge over other cafes in my area and potential competitors. Break-even Analysis Internet Cafe is operating in an industry capable of supporting high gross margins.
Variable costs in relationship to per-unit revenues are low. Variable costs are equal to roughly 25% of per-units revenues. 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%. Fixed costs for Internet Cafe equal almost $7, 500.
Fixed costs include: payment of debt, facility lease costs, hardware costs, and other costs Internet Cafe must maintain on a monthly basis. These costs are fixed and aren’t impacted by an increase or a decrease in sales. Currently, Internet Cafe will break even at a monthly sales point of $10, 000. 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. Expense Forecast The marketing budget will consistently equal approximately 20% of sales. 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. Currently, the marketing budget beyond year one remains set at 20% of sales.
It is our hope to increase this budget should sales and efficiencies of scale allow us to do so. Explanation of Major Marketing Expenses: o Local TV spots… In our first year of operations, we will spend $23, 000 on TV spots. TV spots allow us to reach a large audience and effectively target our market. o Print Materials…
Print materials always require a significant budget. They include: fly ers, literature distributed internally, novelties for customers, coupons, and anything else we can squeeze into this budget. o Local Newspapers… An important part of our marketing efforts. Newspapers ads will give us a vehicle for consistently getting our message / brand in front of a large number of potential customers. We believe this vehicle will get our message to seniors, which make up a large portion of our target market.
In addition, the business section will provide us with a means for communicating with our business customers. o Local Radio Spots… These are an inexpensive way to secure a large number of daily impressions. o Internet Cafe Events… This will include local radio and TV events where radio and TV stations broadcast from the Internet Cafe site offering freebies to first-time customers for stopping by. Internet Cafe will also run educational programs and community events throughout the year.
o Customer Happiness Representative… This employee will monitor the level of happiness amongst Internet Cafe customers. They will be responsible for: developing customer satisfaction programs, monitoring happiness levels, responding to customer concerns, and the general well being of every Internet Cafe customer. Linking Sales and Expenses to Strategy Our marketing expenses are tied directly to our sales revenue. As sales increase, the marketing expenses will increase.
Currently our marketing expenses equal roughly 20% of sales, and we hope to increase that value in the future. Our programs will be monitored for efficiency and return on investment. Most notably, we want to pay close attention to the value of the ‘Customer Happiness Representative.’ This component of our marketing budget is expensive, and we want to track the value of the program to make sure we ” re optimizing our budget. Periodically, we will survey our customers to determine the effectiveness of our programs, and we ” ll adjust the marketing mix appropriately based on our findings. Contribution Margin The Contribution Margin chart and table presents a strong outlook for Internet Cafe’s first year of operations. 1.
Sales increase an average of 10% per month in the first year. 2. Contribution margin runs at roughly 50%. 3. The marketing budget is consistently based on 20% of total revenue. 4.
A strong focus on local TV and radio is apparent in the expense breakdown. 5. The marketing budget is spread evenly throughout the year. Controls The goal of this marketing plan is to outline the strategies, tactics, and programs that will make the sales goals outlined in the Internet Cafe business plan a reality in the year 2001. We have these marketing obstacles to face: o The creation of a unique, innovative, upscale atmosphere that will differentiate Internet Cafe from other local coffee shops and future Internet cafes. o The establishment of Internet Cafe as a community hub for socialization and entertainment.
o The creation of an environment that won’t intimidate the novice user. Internet Cafe will position itself as an educational resource for individuals wishing to learn about the benefits the Internet has to offer. Our marketing efforts will be focused on building the image outlined above. We have milestones and sales goals to meet and a business plan outlining our first and second year of business in detail. It will be critical to use this marketing plan and the Internet Cafe business plan as living / working documents. We can’t allow them to sit in a file.
They must be used as a map for the future success of Internet Cafe. Implementation Milestones The milestones chart below outlines key dates that the marketing team must meet. The milestones table includes both sales goals and deadlines for major projects that impact the programs outlined in the Marketing Expense Budget. Each milestone is assigned a manager and that manager has ownership of the task and is responsible for its success.
We will track our successes and failures by reviewing planned-vs-actual results. Successes and failures will be reviewed and addressed and a quarterly basis. Marketing Organization The founder of Internet Cafe, Vinod Krishnan, has a MBA from the Western International University of Phoenix in Marketing and Management and will head the marketing effort. Initially, there will only be one additional member of the marketing team, the ‘Customer Happiness Representative.’ This position has not yet been filled, but it is the first milestone that must be completed.
The ‘Customer Happiness Representative’ will play a large role in implementing the different marketing programs. A marketing manager will be hired during the third or fourth quarter if revenues meet projections. 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 Internet Cafe 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 above the allocated 20%. We ” ll be able to hire the marketing manager earlier, and we ” ll be able to provide more equipment and possibly add an additional location. Revenues miss projections – We have to be prepared for this possibility. If we miss our projections, we simply have to re-double our marketing efforts. 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. Internet side of business plays a lesser role – Our customers might not be willing to pay for Internet access or Internet Cafe memberships as Internet access costs and hardware costs continue to fall. If this scenario materializes, we will need to move our focus to beverages and pastry items, perhaps even providing deli-style lunches.
Internet services in the scenario would still play an important role in attracting customers; we’d just have to charge less and move our numbers around to accommodate this trend.
