Coffee Talk New Coffee Shop

ESSENCE OF MARKETING
“COFFEE TALK”
Course: HDMKT01024 – Essence of Marketing

Course Instructor: Mr. D.M.Ravi Dissanayake.
Semester I, 2014
Group Assignment
DIPLOMA IN MARKETING
Department of Marketing Management
Faculty of Commerce and Management Studies
University of Kelaniya
Coffee Talk Page 1

Table of Contents
Executive Summery........................................................................................................................4
Coffee Talk.....................................................................................................................................4
Objectives.......................................................................................................................................4
Market Needs..............................................................................................................................4
Market Trends.............................................................................................................................5
Market Growth............................................................................................................................5
Industry analysis.............................................................................................................................5
Porter’s five forces analysis........................................................................................................6
SWOT Analysis..........................................................................................................................7
PESTEL factors...........................................................................................................................8
Competitor analysis.......................................................................................................................10
Segmentation.............................................................................................................................11
Segmentation profile.................................................................................................................13
Main group if Categories of Company targeting.......................................................................13
Targeting...................................................................................................................................14
Positioning Strategies................................................................................................................15
How to apply the Holistic marketing concepts in to the “Coffee Talk”.........................................16
Internal Marketing.....................................................................................................................16
Integrated Marketing.................................................................................................................18
Relationship Marketing.............................................................................................................18
Social Marketing.......................................................................................................................19
Marketing Mix strategies..............................................................................................................19
Product......................................................................................................................................19
Service/Product Mix..................................................................................................................22
Pricing Strategy.........................................................................................................................23
Place..........................................................................................................................................24
Promotion..................................................................................................................................25
ATL methods............................................................................................................................29
BTL methods............................................................................................................................29
TTL methods.............................................................................................................................30
Action Plan................................................................................................................................31
Use of Service Marketing Mix......................................................................................................32
People.......................................................................................................................................32
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Process......................................................................................................................................33
Physical evidence......................................................................................................................33
Financials......................................................................................................................................34
Break-even Analysis.................................................................................................................35
Sales Forecast............................................................................................................................36
Expense Forecast.......................................................................................................................37
Contingency Planning...................................................................................................................38
Conclusion....................................................................................................................................38
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Executive Summery
The new coffee shop chain “Coffee Talk” is planning to launch in Sri Lanka January 2015. This
report is directing Lanka Drinks PLC to come up with new coffee shop business.
“Coffee Talk” chain in Sri Lanka specially targeting Colombo and suburban areas, here we have
analyzed the current market player’s activities with current internal and external environment.
“Coffee Talk” going to offer different coffee shop experience to customers with maintaining local
cultural values
Coffee Talk
“Make it happen over coffee”
Objectives
Coffee Talk Cafes has established two firm objectives it wishes to achieve in the next
three years
1. Six Coffee Talk Cafes by the end of the third year including Drive-thru facility.
2. Maintain a 55% gross margin Market analysis
Market Needs
Sri Lanka is slowly turning into a coffee-drinking nation from traditional tea-drinking. As
a traditional drink still Sri Lankan consumers more with Tea, but the consumption of
Coffee is increasing year by year. The walk in coffee shop trend is familiar with new
generation and high class consumers.
The potential of attracting tourists to coffee shop is very high. Coffee is the most popular
beverage worldwide and Coffee is the second most widely used product in the world after
oil
 Selection: a creative choice of food and drink and
 Accessibility: best locations, long business hours.
 Customer service: provide superior customer service with the attention on customer
 Competitive pricing: all products will be competitively priced relative to the
competition.
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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 & Beverage 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.
Market Growth
As per Central Bank report Hotels and Restaurants 13.6% growth shows in 2013. Number
of coffee shops started with in last few years, Local brands and well-known international
brands having competition each other in the Sri Lankan market.
Also sales are estimated to increase for the next few years. This growth can be attributed
to several factors. The trend of eat and drink outside of the home. Eating and drinking out
is a convenience that many are willing to pay for. It also provides contact with more
people.
Industry analysis
In this part analysis of industrial environment by applying Michael
Porter’s five forces model to examine the competitive environment that Lanka Drinks
PLC new businesses will face upon its establishment of Coffee Talk shops. This model
including five variables: industry suppliers, buyers, potential new entrants, existing
competitors and effect of substitute products to the current brand.
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Porter’s five forces analysis
Threat of
new
entrants -
High
Buyer’s Industry Supplier’s

Power - Rivalry - Power -
High High Low
Threat of
substitutes
- High
Diagram 01
 Threat of new entrants – High,
Current operation of several established brands of Coffee shops, hangouts places, fast
food chains ex; Barista, KFC, McDonalds. Also the cost involvement for starting a
coffee shop chain is very high,
 Buyer’s Power – High,
Customers also pose significant influence over the business. There are number of
Coffee shops available. Low switching cost, Variety of products, Variety of services
 Supplier’s Power – Low,
Number of suppliers to make offers, Government regulations on prices of milk.
 Threat of substitutes – High
Aerated drinks, milk beverages, juice centers and tea shops, Fast food chains,
McDonalds etc, Hangout places
 Industry Rivalry – High,
Current operating Coffee chains like Barista, Entry of international coffee chains such
as Starbucks, Gloria Jeans
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SWOT Analysis
The following SWOT analysis captures key strengths and weaknesses within the
company and describes the opportunities and threats facing the Coffee Talk.
Strenghts Weakness
*Strong current brand image *New in Coffee business
*loayal customer base * Lack of experinced staff
*Unique Sri Lankan culture * Sri Lankan culture more towards Tea
SWOT
Opportunities
*Growing demand for coffee Threats
* Growth in tourism *Local cafes
*come out with Coffee bean brand *Internatinal chains
*Online placing of orders,home delivery and online payment *Government rules and regulation
Diagram 02
Commercial value of a business is depend on the market share volume , So Strength of the
business, Opportunities it has on the market , Weakness to recover and also the threats it has to
face needs to identify through the competitive market .
SWOT analysis is a framework for identifying and analyzing the internal and external
factors that can have an impact to the promotion and also SWOT analysis has been
adopted by organizations of all types, as an aid to making decisions.
This analysis aims to help an organization match its resources to the competitive
environment in which it operates.
According to the above factors, we are planning to collect the data from the internal
departments vice as well as the Out-In approach from the outside market through the
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researches handle by our marketing teams at the different places of the Colombo and
Suburban areas.
As an ex sample : We are planning to do some research at WTC and Crescat Boulevard

as well as ODEL Outlet at Town Hall , before implement the promotion to the
management.
PESTEL factors
(Source: http://123writing.com/sample_description.php?sample_id=17 )
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 Political; political stability in the country is good time to start new business. These
factors determine the extent to which a government may influence the economy or a
certain industry. [For example] a government may impose a new tax or duty due to
which entire revenue generating structures of organizations might change.
 Political factors include tax policies, Fiscal policy, trade tariffs etc. that a government
may levy around the fiscal year and it may affect the business environment (economic
environment) to a great extent
 Economic; Economy is expanding. For example a rise in the inflation rate of any
economy would affect the way companies’ price their products and services. Adding
to that, it would affect the purchasing power of a consumer and change
demand/supply models for that economy.
 Economic factors include inflation rate, interest rates, foreign exchange rates,
economic growth patterns etc.
 Social; Less coffee drinkers in Sri Lanka. Targets High-end, foreigners and middle
class, Affordable for a meeting place. The social environment of the market, and
gauge determinants like cultural trends, demographics, population analytics etc.
 Technological environment; Marketing strategy based around technology, Provide

entertainment over Bluetooth & Wi-Fi, Drive through. These factors pertain to
innovations in technology that may affect the operations of the industry and the
market favorably or unfavorably. This refers to automation, research and development
and the amount of technological awareness that a market possesses.
 Ecological Environment; Limited production/less pollution. Use biodegradable

plastics .These factors include all those that influence or are determined by the
surrounding environment. This aspect of the PESTLE is crucial for certain industries
particularly for example : Tourism, farming, agriculture etc. Factors of a business
environmental analysis include but are not limited to climate, weather, geographical
location, global changes in climate, environmental offsets etc.
 Legal; Ethical and based on customer delight, Less consumer complaints and quick
customer service. These factors have both external and internal sides. There are
certain laws that affect the business environment in a certain country while there are
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certain policies that companies maintain for themselves. Legal analysis takes into
account both of these angles and then charts out the strategies in light of these
legislations. For example, consumer laws, safety standards, labor laws etc.
Competitor analysis
Competitor Menus Alcohol Cost for two No of Country of

people Stores origin
(approx Rs)
Java Lounge Starbucks Espresso, Java No 3000/- 3 Sri Lanka

coffee range, Main dishes
& deserts.
Barista Beverages includes No 1500/- 12 India

Barista Lavazza coffee
range, Sandwiches,
Wraps, Other Indulgence,
Desserts
Gloria jean’s Espresso, Specialties, No 1000/- 1 Australia

Coffees Tea,
Coffee Bean Coffee, Tea, Salads, No 1500/- 2 United

& Tea Leaf Pasta, Sandwich States
Cafe Breakfast, Lunch, Dinner

No 1600/- 1 Italy
Pascucci Coffee
Paradise Coffee, Alcohol, Sweets, yes 3000/- 1 Sri Lanka

Road snacks, fresh juices, Main
Gallery Cafe dishes.
Coco Coffee, Tea, Sandwiches, No 2600/- 2 Sri Lanka

Veranda Burgers & healthy corner
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Hansa Cafe Coffee, Tea, Sandwiches No 800/- 1 Sri Lanka
Heladiv Tea Tea, Coffee, Fresh juices, Yes 2300/- 1 Sri Lanka
Club Sandwiches, Deserts
CIOCONUT Coffee, Tea, Mocktails, No 3500/- 1 Italy

LOUNG Pizza, Pasta, Desserts
Coffee, Wine, Fresh Yes 2700/- 1 Sri Lanka

Sugar Bistro juices, Main dishes, Ice
cream, Burgers and Hot
Dogs
Toby's Estate Coffee, Tea, Soups, Main No 4000/- 1 Australia

Dishes, Deserts,
T.G.I. Friday Coffee, Fruit drinks, Main Yes 1500/- 1 United

dishes, Pasta, Alcohol, States
Market segmentation, Targeting and positioning strategies of Lanka

drinks PLC
The Lanka Drinks PLC currently offering different categories of drinks to the Sri Lankan
market. Such as, soft drinks and non-carbonate drinks. But 1 st time they introduce coffee
to the market as new brand. Even they have experience in soft drinks market more than
40 years, coffee is new pattern flavor for them and customers also. Therefore in STP
process they have to follow different types of strategies for get maximum advantage.
Segmentation
Market segmentation is a process of dividing a market into distinct groups of buyers with
different needs, characteristics or behavior. Lanka Drinks PLC also has different
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segmentations for soft drinks. But current scenario they have to segment coffee buyers’
market. Its little bit different than soft drinks market.
We can identify 04 types of segmentation strategies. Those are Geographical base,

Demographic base, Behavioral base and Psychographic base.
Geographical base - The Company plan to span their coffee shop chain Colombo &
suburban areas. Since they target to both average and high ended customers this area is
very suitable. Company plans to open almost 10 coffee shops around Colombo and
suburban areas in long term. That places are luxury places in Colombo and nearest areas.
Proposed places mentioned in place segment of product mix.
Demographic Base – In this base the company segment their customers from their
gender, income, life style, social class & occupation. This part is very important for
segmentation activity. Because of this is about people and their living behavior.
Marketers of Lanka drinks PLC have to analyse carefully about this segmentation.
Especially they target to average and high ended customers.
Behavioral Base – The Company have to consider about what are the occasions
customers coming to coffee shop and what are the benefits of company giving to the
customers from the company. High ended customers using coffee shop for spend their
leisure time. As well as average income earners using get coffee experience and get fun
with friends. Therefore coffee shop background should free and very attractive place.
Because of customers need free mind and have fun with coffee.
Psychographic Base – In this segmentation strategy Lanka drinks PLC has to consider
about customers personality, customer’s life style. People willing to show their
personality from goods using by them. Therefore coffee shop and its premises we
maintain good quality and clean. We can get more idea by referring segmentation profile.
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Segmentation profile
Age Gender Social Class Life Style Benefits
16 -25 Male/Female Average & High Middle and Enjoy, Wi-Fi
end Luxury facilities, meet
friends leisurely.
30 - 45 Male Top end, middle Luxury and Free space to plan,
level middle meet friends,
25 - 40 Male/Female Average & High Healthy middle Healthy foods,
end level and top end traditional
background
35 - 55 Male/Female Foreign people Average Enjoy Sri Lankan
culture, foods &
coffee
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Main group if Categories of Company targeting
Teenagers of coffee loving and Lovers
Young & Adults Executives
Health Concious Crowd - Both Ladies and Gents, Families
Tourists who willing to enjoy coffee with free time
Targeting
As a soft drink manufacturing company Lanka drinks PLC previously target totally
different market segment for their marketing. But this time target group is different. In the
segmentation part we mentioned few groups company can target. The company should
plan to go ahead with differentiated market targeting strategy because of company has
good strength to do the separate product for separate target market. However some
situations they have to plan to do undifferentiated market targeting strategy. It will
depend on consumer requirement. But main strategy is differentiated market targeting
strategy. That means some varieties of coffee offer to the average income earners target
market and some coffee range offer to the high end market. Those varieties and its prices
analyse from product mix analyzing.
Product one Teenagers of Coffee loving
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Product two Young and Adult Executives
Product three Health Conscious Individuals
The Company can capture different categories of consumers to the coffee shop chain.
And after that they have to market their coffee range among the consumers.
 According to our targeting strategy lovers we can attract to the coffee shop then table
arrangements, coffee shop background, colors of background and coffee shop staff should
be suitable for loving background.
 In addition young and adult executives also expecting to the shop. Then coffee shop
premises should be separated with those requirements.
 Since health conscious people attracting the coffee shop, natural things and natural
paintings more suitable for background.
 As well as families we expecting under health conscious category to the coffee shop with
children. Therefore we can try cross marketing techniques. We can sell some foods
(sweets and snacks) to the children.
 Tourist Segment Company should maintain carefully. Because of lots of coffee shops and
places available in Colombo area including Coffee bean, Barista and Star Bucks. Those
are very completive and famous places in Sri Lanka.
Positioning Strategies
Lanka drinks PLC already positioned with good quality and good image value. Our new
brand also positioned with maintaining traditional culture through high quality product
and servicers. Most of the competitors considering high quality but we expecting our
brand image positioned as best service quality. Our staff offices doing very attractive
service from welcome to good bye.
 We have to position the place comparing to competitors. Because our natural and
traditional look don’t have any competitive brand. Therefore customers and interested
parties who willing to enjoy with traditional and local culture definitely select our brand
and our coffee shops to enjoy their leisure time.
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 As well as company plan to position the brand highlighting our product unique feature.
That is service quality. That means our front line staff serving very friendly and attractive
service to the customers.
Traditional culture (High)
Coffee Talk
Coffee Bean,
Barista
Java
Price
Diagram 03
 But Coffee Talk never tries to over position the brand. Because of customers will
disappoint after getting our coffee experience.
How to apply the Holistic marketing concepts in to the “Coffee Talk”
Internal Marketing
There are three Management categories the Coffee Talk restaurant chain. Top
management is the decisions makers; middle management members are doing the
operational part and the low management category doing the lower level management
things.
Internal marketing part is very important for this system. Because the success of this
business depends on the internal factors.
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TOP MANAGEMENT
MIDDLE
MANAGEMENT
LOW MANAGEMENT
Diagram 04
Main positions under this three staff categories.
Top management
Chairman, Chief Executive Officer, General Manager
Middle Management
Marketing manager, Sales Manager, Production manager, Chief accountant, Operation

manager, Branch Managers, Head Chef
Low Management
Service Managers, Asst. Managers, Sales Executives, Finance Executives, Cashers and
other managerial staff
The owner of this company is chairmen/MD. According to this management level the top
management has to plan some motivational things to maintain the moral of the staff. It is
the very important to uplift the service level and the production quality.
Proposed Internal Marketing Activities
 Training programs - This should be local and international. International

exposure is very important for this company because of their target market. The
Staff members should know about the behaviors of various customer categories
and various cultures. In addition to the common training programs the
management has to organize some special training programs for the various
cultural activities. It is very useful to maintain the hospitality of the service.
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The other training programs are lavages/ International level customer care service
programs / IT / Hospitality service / and other subject relevant to their job roles.
 Proper Internal Process and the promotional path – If there is a proper
document for process and promotion scheme it’s a special advantage for the moral
of the staff.
 Completions
 Communication - Can offer a free mobile and the call facility through all internal
staff. And other outgoing facilities are free considering their performance.
 Awards and Rewords – Annually the company have to organize a grand party
for the staff members and their families. On that event they can give these awards
and the rewards.
Best Branch of the month and the year.
Best sales persons of the month and the year
 Service charge for the Staff members – The service charge of each restaurant
will share through the staff. The company can earn more from this. Because the
staff members are very happy.
 Free Meals – Company can offer separate meal for the staff members free of
charge.
Integrated Marketing
Integrated marketing will connect all the marketing activities together. Because no one
can use anything without promotion for promotional activities as well. According to the
promotional MIX we have to use ATL, BTL, and lots of TTL Activities. Because
majority of our target group moving to TTL activities
Advertisements on magazines TTL activities, TV Advertisements all should connect to

the main brand and also internal marketing communications are align with the main
brand. Colors, slogans, wordings, font’s type and sizes want to align with the main brand
manual.
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Relationship Marketing
This is the most important point of this segment. The thing is this business mainly
depends on the customer behaviors. The Coffee Talk management has to do a survey and
getting data of customer behavior is very important
Mainly relationship marketing focus for the customers and the suppliers.
In the customer point of view.
 Very attractive welcome in the entrance – “Coffee Talk” can get the first
appliance from this. All the customers enter in the shop in very happy mode.
 Hospitality service – All the reception officers have to guide to the relevant tables.
Customers are very happy about the attention.
 Free meals for below 5 year child’s – This is a special marketing point to promote
Coffee Talk Brand.
 Very flexible service – If someone ordered a wrong the waters have to consider
about this. It should not an issue for the service staff.
 Special packages for the evening time – They can promote the after office hours
for the special offers as “Happy hour” It should be a big attraction.
In the Supplier Point of view.
 Cash deal – This is a good opportunity to get a good service and the quality goods.
And special advantage for the company as well. Because they can get special
offers for the transaction.
Social Marketing
This company mainly branded as a true Sri Lankan traditional looking company. And the
other point is the targeting customer base will be the medium and premium level top
members. And mainly foreign crowd.
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Most of the customers their expecting are willing to come there for relaxation.
 Visitor guide for main wild life parks – “Coffee Talk” Company can introduce a
visitor guide for the visitors of these parks. Most of their target group going to see this
type of places. “Coffee Talk” can push their brand as a responsible network.
 Kandy Dalada Perahera – In Kandy dhalada perahera festival “Coffee Talk” can
participate for the official drinks provider for the VVIP and VIP launches with their
branded cups. In one hand its match with our objective. In the other hand most of the
spectators are the “Coffee Talk” target market.
Marketing Mix strategies
Product
According to the product strategy we identify, should be the cycle mentioned below,
As per the observation done by the marketing team, strategy must be customer oriented as
well as, Marketing oriented and it should be product oriented to improve the profit as well
as to make the volume increased of the market as well.
Decisions must be thoroughly matching to the above factors and if not, it should be some
flexibility to the marketers as well as to the sup players and to the intermediaries as well.
Action should be well support to the product development and to the branding decisions
taken by the organization or the marketing department.
Product strategy must be prior to the launch of the new business to the intended market
and should be analyses of the nature of the market , how much market share is to be
achieve and how much profit is expected by the department also needed .
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Diagram 05
The goal of product development is to generate a positive return on investment.
Product means what the customer buys and the development means growing the product
vision
Process means step by step series of activities that have a defined meth ord.
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Diagram 06
(Source: https://www.google.lk/search?q=images+of+product+development&biw)
As per the business we need to develop (Coffee shop chain) we have to improve some
creations to face the competitive market as well as to achieve the customers we targeted,
So creations means the way we approach the customers product vice, the methods we
willing to use on the coffee shop to serve the customers and how to maintain the quality
as well. We need to enhance the way we talk to the customers to build up the valuable
relationship with value added service.
It has to be some innovation to make the customers mind setups to the experience they
get as cultural value through the service we willing to provide.
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The menu of the Coffee Talk will be built around mainly coffee drinks International
and local, such as lattes, mochas, cappuccinos, etc.
Sample Menu card
Juices
 Nungu payasam
(Palmyra jelly drink)
 Palmyra jelly with milk
 Palmyra jelluy with
hunny
 Palmyra jelly milk
Food Items shake
 Palmyra fruit juice
• Palmyra Chocolate
• Palmyra cakes
• Marshmallows
• Palmyra Root snacks Palmyra fruit ice cream
• Panagkatti (Jaggery)
Palmyra jelly ice cream
• Panaattu
• Paani Panaattu
• Pananngani Paniyaarai
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Pricing Strategy
Customers are normally trying to match the price paid and value received. Also price is only the
element that generates income for the any organization. Within marketing mix price can be
change immediately.
Pricing Objectives
Stable market position
Survive and return on investment
early cash recovery
acheive beyound the break-even point
Demand determined
Menus and product offering of competitor coffee shops are different to each
other except intl coffee flavors so consumers can’t compare the price one to
one
Even coffee market having elastic demand here company can use point of
difference to perceived value
Estimating cost
Consider about fixed and variable cost involve in process
Analysis of cost, price and offerings of competitors

Understand the competitor cost, price and other value additions
Forecast the price reactions of competitor coffee shops
Deciding pricing method

here can suggest the perceived value pricing method because of the point
of difference available
Using perceived value pricing method need to be cross the breakeven
point as analyzed on breakeven analysis
The product would be designed in such way that it can accommodate the
price for them. This pricing strategy would give a better prospective that we
understand the customer’s economical need and hence try to fit them based
on their purchasing power
how much the customer can afford to pay and then based on that cost
ananalyzed and fix the price. It leads to standardization of product.
select final pricing

after considering all pricing strategies can be decide final price , in this
situation several factors should be taken into account ex; company pricing
policies, impact on other parties
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Place
As we aware location is a vital factor prior to the commencing the coffee shops in
selected areas we have done a in depth feasibility study analysis to select locations
including Rajagiriya, Battaramulla, Wellawatta, Negambo, Nawinna , Hyde park corner,
MT Lavinia etc. Major products sold by coffee shops include beverages as well as
complimentary food items. We have planned modern architect design with latest
infrastructure facilities to make our coffee shop more attractive to the target
customers(foreign and local ) Coffee shops depend greatly on customer traffic and also
located in areas with convenient access for pedestrians or drivers.
These Coffee shops is initially established within Colombo area. Colombo has
approximately 2,309,809 residents. And is expected to have highest demand for coffee in
entire Sri Lanka, because of its presence of high income class people, young working
group of people and students and also a presence of lifestyle that would trigger several
happenings, party themes, celebrations, events and occasion all around the city raising the
demand for food and beverages.
Initially three coffee shops will start specially targeting Colombo and suburban areas as a
bellow.
 Rajagiriya
 Mount Lavinia
 Ward place col-07
These shops time will be more convenient for all target customers
 Open close timing 7.00am to 10.00pm
Inside of Coffee Talk
 Music; mix with international and local music

 Space for live performers.
 Hang wall pictures and pints which shows Sri Lankan culture and values ex; Kandy
perahera, Sigiriya, kandian Dancers
 In public areas keep traditional evidence matching with interior ex; Pettagama, Sesath,
traditional masks and brass oil lamps
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Promotion
According to the research and feedback from our special marketing research team, current
marketing situations and the customer behaviors of the Colombo & Suburban commercial
areas, After identifying and analyzing the factors, we can apply below Promotional mix to
approach the new coffee shop chain targeting the average and high end customers as well
as the foreign customer, who are love to get the experience of local cultural values’ in Sri
Lanka.
Diagram 07
The promotional mix is a combination of the deferent types of promotion, it keeps
the products and services in the mind of the customer and helps stimulate demand for the
products. Promotional mix should have customer oriented as well as Trade oriented,
Lanka Drinks PLC is one of the leading reputed soft drink manufacturing Company
and it has established a strong position in terms of long strength in finance and brand
image perspective in the market among the competitors as well, so we need to stimulate
the targeted customer segments via our advertising promotion methods with the brand
awareness. So we, as a team of marketers decide to use the "AIDA" model to analyze the
market separately using key functions of Awareness, Interest, Desire and Action.
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"AIDA" model
Diagram 08
(https://www.kbmanage.com/concept/aida-concept)
First of all company management has to approve a budget to do the promotional and
advertising process. Budget must be include Advertizing (Below the line, above the line
and through the line) Involving the media channels. Sales promotions, Public relationship
Promotions, Organizing events to promote the brand image. It has to reach the targeted
market segments to stimulate customers with the awareness.
A successful strategy will usually have elements of both the push and pull promotional
methods. If we are starting a new business and intend to sell a product through retailers,
we'll almost certainly need to persuade outlets to purchase and stock our product. We’ll
also need to raise brand awareness and start building valuable word of mouth referrals. If
we have designed to promote this "Coffee shop chain” around the customer and have
considered all elements of the marketing mix, both of these aspects should be achievable.
A push promotional strategy involves taking the product directly to the customer via
whatever means, ensuring the customer is aware of our brand at the point of purchase.
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"Taking the product to the customer".
Push promotion has 02 methods
Requirements of the market we can apply those methods

Trade Promotion – Need to Offer Stimulating factors to do promotions to the Coffee shop
chain. As a well known reputed soft drinks manufacturing and non- carbonated products
provider in Sri Lanka, we can use our own Trade network to implement the new business
to the market,
Example: We can encourage our dealers to display our “Coffee Talk” printed
advertisements in their show room windows, supplying free materials to them as well.
Sale force promotions – Using marketing forces to do promotions.
This will be the best option for our coffee shop branding tool at the beginning of the
process.
In this regards we can supply a branding dress cord to our marketing team of the Lanka
Drinks PLC doing promotion at Colombo and suburban areas. So we can introduce our
brand to the market prier to open the shops. Go to the customer and build up the image of
the brand and the products we are going to promote and enforce the customer to be aware
and purchase the products.
As an example we can distribute the leaflets inside the super markets, fashion shops,
sports clubs, Air port, through our marketing teams with the feedback from the customers
as well
Pull promotional strategy involves motivating customers to seek out our brand in an
active process.
"Getting the customer to come to us",
Before the experiences getting from our coffee shop, we can promote some special
discounts, vouchers issuing some collected fashion outlets at Colombo and stubborn, to
stimulate the purchasing power of the customers and to that selected fashion shops us as
well.
Coffee Talk Page 28

As an example : We can issue this kind of vouchers to ODEL , House of fashion, No

Limits, Hameedias, Creating new market to the different kind of experience of the
restaurants chain in the city.
As an example ; Apart from these above promotional trials, we can reword loyal
customers who are coming to the shops several times and introducing new customers, as a
stimulating point , offering family packages ,free gifts to the children, Coupons , Price
offs, Sweepstakes , free samples and some special discounts.
In addition to that above promotional methods’, we can introduce Public relations

programs to implement our coffee shop brand to the outside market.
Public relationship can communicate information about our Company, our products and
services of the new “Coffee Talk” coffee shop chain. This wills buildup our goodwill to
the public of our brand. We are planning to do some CSR Projects with the international
school children and their parents to implement the product and the company, providing
school sports items by using our coffee shop brand image.
As an example : we decided to support from gifting several sports items to the Colombo
International school and Asia International school on the day of opening of the shops with
branding T shirts to the sports teams of the schools. And also we will sponsor the event to
play inter school basket ball competition as well.
It will help to give a big sound and good publicity to the market regarding our promotion.
Apart from that as a qualitative market segment, we can educate the top end market and
foreigners who are coming to the international schools (CIS, AIS) with their children and
we can get post comments about our new business in the market.
These kinds of organized events which go with brand association to promote the brand
among the different stakeholders as well as this will make strong relationship with the
customer due to more prospective and well communicate platforms.
And also it will build up word of mouth brand awareness and can take low cost budget as
well to the organization in the beginning stage.
Coffee Talk Page 29

We can also promote this event through the internet web pagers and social web sites
using E-mail campaigns and do SMS by using telecommunication providers like Dialog,
Mobitel, Etisalat, regarding our CSR project and the new coffee shop chain.
As a final stage we can use the advertising media to promote and give the brand
awareness to the market and the segmented customer levels we expected,
Advertizing can do many things by communicate an ideas or information to stimulate a

targeted audience via non personal mode of communication.
Sponsor------Production Cost------ Agency-------Channels
Company Media ATL/BTL/TTL
Buying TV/FM Radio/Event management
(Sponsor---------------------------------------------- - Channels)
Most probably we can use ATL and BTL methods to implement the business and reach
the customers more effectively and efficiently.
ATL methods
ATL methods as printed media material like Daily News, Sunday observer, Sunday times,
LMD Business magazine est. Electronic media as TV channels, Radio FM channels, Peo
TV, Dialog TV as well. TV Channels can use some special time belt such as the most of
the Viewers prefer teledramas or the news time also we can use to show our
advertisement about the “Coffee Talk”.
BTL methods
As a BTL methods’ we can use point of sale materials’, Cinema, Out Door display boards
and bill boards, Digital screens at the city .
Printed materials as leaflets, Posters and letter campaigns to the door stapes of the
customer.
Coffee Talk Page 30

TTL methods
Another Advertizing method we can use as TTL. (Through the line advertizing)
promotions.
We can promote our business using E-marketing through the Social Media and web sites
like Face book, tweeter, Gossip Lanka, Google, E bay.com, My deal.com, Ikman.lk and
other hotel chain websites, Auto Lanka automobile magazine.
According the objectives we used, we can classified the advertisements as per the below.
As an information advertisement we can make some big picture to give more information
to the customers about the “Coffee Talk” and what are the differentiations we have the
recipes and the service we are willing to provide.
As an example: We have a good sense about the cultural values and the western trend to
treat the customers both locals and from oversees as well.
In addition to that we can also publish persuasive advertisements to the customers and it
will provide more creative ideas stimulating customers to come to our shops and feel the
deferent among other competitive places.
Although we can implicate some life style ads to give the massage to the average and
high ended customers to spent their time experiencing the top level services.
As an example: we can provide some WIFI free zone to them and some kids corner to
play as well. It will show at the advertisement. We can motivate the customers that the
place of having food with coffee is not just a shop and it is the part of the life to spend
every day to them.
Coffee Talk Page 31

Finally we can go for the reminding ads to show the history of the company and the
business partners we have and also the new product of “Coffee Talk” to create the best
what we present to the customers always.
Action Plan
1. Hoardings
 10’ X 10’ Hoarding, Town Hall, Torrington Square , Cambridge Terrors, Jawatta,
Rosmid Place, Barns Place, Colombo 10,Colombo 08, Colombo 03, Colombo 02
 20’ X 10’Hoarding, in a Colombo city & Suburban locations
2. TV Program
 Sponsoring the NDTV Music Max program, Late Night Music Program
3. Advertising
 Electronic Media: Trailers to be run on ETV & MTV two weeks prior to the
event date
 Print Media: Articles and advertisements to appear on Lake House and Wijaya
News newspaper (Sunday Time, Daily Mirror, Sunday Observer ,Hi magazine,
GO Magazine)
4. Poster Campaign:
 Posters to be displayed at every Sports clubs at Colombo City and Suburban
5. Post Event Coverage

 Articles to be published in the Print media.
This is the Budgeted action Promotion plan as per the approval from the Management.
Coffee Talk Page 32

Use of Service Marketing Mix
As a newly open coffee shop 4ps are not enough to depend the market and customer
retain. Therefore need to consider service marketing strategies it means need to consider
people, process, and physical evidence.
People
People is the value drivers and brand communicator in the any organization.
Anyone who comes into contact with our customers will make an impression, and that
can have a profound effect positive or negative on customer satisfaction. The reputation
of coffee brand rests in people’s hands. Therefore, be appropriately trained, well-
motivated and have the right attitude. Employee should get know and should have ability
to understand what customer wants and do it that service confidently. According to
Coffee Talk these are criteria which for success people element.
 It is essential to ensure that all employees who have contact with customers are
not only properly trained, but also the right kind of people for the job and also
provide same uniform to staff to give impression for the customer.
 Many customers cannot separate the product or service from the staff member
who provides it. This shows the importance of Coffee Talk people and should
have ability to manage a few languages.
 The level of after sales support and advice provided by a business is one way of
adding value to what you offer, and can give you an important edge over your
competitors.
Coffee Talk Page 33

Process
The process of giving a service and the behavior of those who deliver are crucial to
customer satisfaction. Issues such as waiting times, the information given to customers
and the helpfulness of staff are all vital to keep customers happy. Customers are not
interested in the detail of how your business runs. What matters to them is that the system
works. They need to service if that not manage correctly customer never keep their foot
print in here. These are the things which support to Coffee Talk process.
This part of the process is the first experience of a company that many customers
have. There's no value in making the rest of the company run perfectly if this part is
faulty. As a consequence, this 'P' could be a great source of competitive advantage if used
wisely.
 When customer enters the café there is person for the welcome and if customer
come by vehicle there should me another person to say welcome and greetings.
Ex; security
 Maintain one side for music the person who likes to drink coffee listening music
and give free of charge Wi-Fi for the customer.
 Self service. We don’t offer menu card as soon as customer comes in, let
customers to come and order with cashier counter
 Pets & liquor not allowed
 After closing time do all cleaning and arrange everything for the next day open.
Physical evidence
A service can’t be experienced choosing to use a service can be perceived as
a risky business because you are buying something intangible. This uncertainty can be
reduced by helping potential customers to ‘see ’what they are buying. Case studies and
testimonials can provide evidence that an organization keeps its promises. Facilities such
as a clean, tidy and well-decorated reception area can also help to reassure. If your
premises aren’t up to scratch, why would the customer think your service is?
In here can destroy business image which that organization have showing
feedback of customer. Although the customer cannot experience the service before
purchase, he or she can talk to other people with experiences of the service. Their
Coffee Talk Page 34

testimony is credible, because their views do not come from the company. Some
companies engage these customers and ask for their feedback, so that they can develop
reference materials. As coffee business can do these thing for keep the quality of service.
 Keep the book for the customer suggestion for which kind of areas should to
develop for on behalf of customer and maintain customer detail book to inform
event in the coffee shop.
 Introduce membership card for the customer and give some specially discount and
packages for that members to retain to the coffee shop.
 Select the one person doing draw and give him or her free of charge package for
family or friends per day.
 Logo in “Coffee Talk”, Architecture and décor with local touch, Door man
Arachchi suite.
Propose logo for Coffee talk outlet
Coffee Talk Page 35

Financials
This section will offer a financial overview of the Coffee Talk as it relates to the
marketing activities. . The owners have provided the company with sufficient start-up
capital. With successful management aimed at establishing and growing a loyal customer
base, Lanka Drinks PLC will see Six Coffee Talk Cafes by the end of the third year.
Coffee Talk Cafes will maintain a healthy 56% gross margin, which combined with
reasonable operating expenses, will provide enough cash to finance further growth.
The section will address break-even analysis, sales forecasts, expenses forecasts, and how
those link to the marketing strategy.
Break-even Analysis
The Break-even Analysis indicates that Rs 4,000, 000/- will be needed in monthly
revenue to reach the break-even point.
3.75m Breakeven point Revenue
3.00m Cost
Cost 2.25m Variable Cost
1.50m
0.75m Fixed Cost
0 1m 2m 3m 4m 5m 6m 7m
Sales
Monthly Revenue Break-even 4,000,000

Estimated Monthly Variable Cost 750,000
Estimated Monthly Fixed Cost 1,500,000
Coffee Talk Page 36

Sales Forecast
For the first month we don’t set up sales target and time use for shaping up location, staff
developments and establishing relationship with key stakeholders.
Initial control for achieve good sale
Informed manager to report the first 20days sales and understand the practical issues such
as parking issues in-out convenient, road traffic with operation, outdoor branding and
lighting, initial customer feedback and react accordingly.
Since 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.
As per breakeven analysis every month 4m should be achieved.
6000000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
5000000
4000000
Sales
3000000 Food
Local beverage
Intl beverage
2000000
1000000
0
Months
Within next three years company has an objective of opening up Six Coffee Talk Cafes
Coffee Talk Page 37

Expense Forecast
The expenses forecast will include the list of expenses developed for Coffee Talk cafes.
It answers the question of how much it will cost to run your business. The selling price of
products or services must include an amount to recover these expenses.
To analyze expenses need to take the finance department support
Sample format for expenses forecast
Expenses Amount LKR

Accounting and legal fees
Advertising and promotion
Employees salaries and other
Costs
Insurance
Interest and bank charges
Printing, stationery and
postage
Rent of premises and other
occupancy costs
Telephone and Internet
Training
Business travel and
accommodation
Vehicle operating expenses
All other expenses
Total
Coffee Talk Page 38

Contingency Planning
.
It is very important to make proper budgeting and decide a backup plan in case the
business doesn’t operate as planned. Implementation control the purpose of expression
marketing plan is to serve as guide for the business. The following area will be
monitoring to gauge performance: 
Revenue: monthly and annual

Expenses: monthly and annual
Customer satisfaction reports and keep comments book
Conclusion
As a Sri Lanka company Lanka Drinks PLC already has good brand image and strong
finance strength. Going to new business with coffee shop chain can be justified as correct
decision. According to external environmental analysis and competitor analysis shows
offering coffee experience with local cultural values will be addition advantage. Report
mentioned marketing mix strategies and promotional nix strategies defiantly new business
directs success
References
http://www.cbsl.gov.lk/roadmap/roadmap2014_e.pdf
https://www.zomato.com/colombo/restaurants/sri-lankan
http://www.yamu.lk/
http://www.javalounge.lk/
Coffee Talk Page 39

Group Members
DM/2014/022
DM/2014/036
DM/2014/011
DM/2014/004
DM/2014/014
DM/2014/029
DM/2014/031
Coffee Talk Page 40

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ESSENCE OF MARKETING

Course: HDMKT01024 – Essence of Marketing

Coffee Talk Page 1

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“Make it happen over coffee”

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Coffee Talk Page 5

Porter’s five forces analysis

Buyer’s Industry Supplier’s

Coffee Talk Page 6

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As an ex sample : We are planning to do some research at WTC and Crescat Boulevard

Coffee Talk Page 8

 Technological environment; Marketing strategy based around technology, Provide

 Ecological Environment; Limited production/less pollution. Use biodegradable

Coffee Talk Page 9

Competitor Menus Alcohol Cost for two No of Country of

Java Lounge Starbucks Espresso, Java No 3000/- 3 Sri Lanka

Barista Beverages includes No 1500/- 12 India

Gloria jean’s Espresso, Specialties, No 1000/- 1 Australia

Coffee Bean Coffee, Tea, Salads, No 1500/- 2 United

Cafe Breakfast, Lunch, Dinner

Paradise Coffee, Alcohol, Sweets, yes 3000/- 1 Sri Lanka

Coco Coffee, Tea, Sandwiches, No 2600/- 2 Sri Lanka

Coffee Talk Page 10

Hansa Cafe Coffee, Tea, Sandwiches No 800/- 1 Sri Lanka

CIOCONUT Coffee, Tea, Mocktails, No 3500/- 1 Italy

Coffee, Wine, Fresh Yes 2700/- 1 Sri Lanka

Toby's Estate Coffee, Tea, Soups, Main No 4000/- 1 Australia

T.G.I. Friday Coffee, Fruit drinks, Main Yes 1500/- 1 United

Market segmentation, Targeting and positioning strategies of Lanka

Coffee Talk Page 11

We can identify 04 types of segmentation strategies. Those are Geographical base,

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Main group if Categories of Company targeting

Teenagers of coffee loving and Lovers

Young & Adults Executives

Health Concious Crowd - Both Ladies and Gents, Families

Tourists who willing to enjoy coffee with free time

Product one Teenagers of Coffee loving

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Product two Young and Adult Executives

Product three Health Conscious Individuals

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How to apply the Holistic marketing concepts in to the “Coffee Talk”

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Chairman, Chief Executive Officer, General Manager

Marketing manager, Sales Manager, Production manager, Chief accountant, Operation

Proposed Internal Marketing Activities

 Training programs - This should be local and international. International

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Advertisements on magazines TTL activities, TV Advertisements all should connect to

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In the customer point of view.

In the Supplier Point of view.

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Marketing Mix strategies

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The goal of product development is to generate a positive return on investment.

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