Components of the Marketing Plan I. Situation Analysis: Where are we now? A.
Historical Background The coffee tree is native to Ethiopia. From there it
spread throughout the Middle East. Until the 17th Century all the coffee of
commerce came from Arabia. Slowly, the efforts of Dutch merchants spread
cultivation to the East Indies. Coffee cultivation began in the Americas in the
early 1700’s. Most of the coffee trees of the Western Hemisphere are said to
be descended from a single plant. It was carried from a botanical garden in
France to the island of Martinique in the West Indies by Capt. Gabriel Mathieu
de Clieu, a young military officer. He kept the tree alive during an arduous
voyage by sharing with it his limited ration of drinking water. Coffee
cultivation spread quickly through the West Indies in the next few years. Coffee
was the first grown in Brazil in 1729. Brazilian coffee exports achieved
importance by 1809, and since the mid-1800’s Brazil has by a considerable
margin been the world’s leading coffee rowing nation. Between 1850 and 1900
other Latin American nations developed extensive coffee plantations. Commercial
coffee growing began in central Africa about 1900. Africa, however, became a
major source of coffee only in the period following World War II. The origin of
man’s use of coffee is lost in the timeless legends of the Middle East. One of
the most appealing relates that some monks, after observing the liveliness of
sheep which had eaten coffee cherries, began to eat the cherries to help keep
themselves awake through long nights of prayer. Consumption of coffee probably
began by the 6th century AD. A reference to coffee appears in a medical
manuscript of AS 900. It was first used as a food, as a medicine, and as an
ingredient in wine. Coffee as a beverage similar to that of today - a water
extracted of roasted beans - appeared around 1300. In the middle political
discussion. Rulers periodically attempted to suppress them; King Charles II of
England termed coffeehouses "seminaries of sedition." When it became
known that roasting coffee beans brought out their flavor, roasted beans were
crushed, boiled in water, and then consumed grounds and all. Spices were often
added to the brew. In Egypt soon after 1600, sugar was added to cut the
bitterness of coffee. The use of milk became common in the late 1600’s. In
Scandinavia and colonial America, eggs were added to reduce bitterness.
Espresso, which is brewed by forcing steam through finely ground darkly roasted
coffee beans, became popular in the 1940’s. It was the main beverage served in
the coffeehouse that began to flourish near college campuses. Again the centers
of literary and political discussions, as well as poetry and folksinging ,
coffeehouse were favorite spots for the beatniks and hippies of the 1950’s and
1960’s. B. Consumer Analysis Bad Ass Coffee Company products are attempting to
serve the serious coffee drinkers out there. We are trying to focus of course on
the older generation as well as the younger generation of coffee drinkers in the
United States today. We want to try and aim our coffee more toward the younger
generation of coffee drinkers since more and more young adults are starting to
drink coffee. a. The Bad Ass Coffee Company distribution channel can be
segmented into 4 categories. · Independent retailers · Supermarkets · Mass
Merchandisers · Our personal market customers b. Bad Ass Coffee Company will be
targeting the independent retailers as well as the supermarkets and hope start
our own brand name stores around the world. c. The people who would probably
enjoy our products the most would most likely be the baby boomer type era. We
would like to aim our products more toward the new generation of coffee drinkers
to come. d. Kids and minorities are not really going to be targeted as much as
the young adults but everyone will be recognized as a coffee drinker by our
company. e. The serious coffee drinker buys an average of 5lbs of coffee a week.
Our goal is to try and raise this average with the bad ass coffee name in every
household. C. Competitive Analysis Some firms are forced to develop unique
distribution channels because of inadequate promotion of their products by
independent marketing intermediaries. Not Bad Ass Coffee Company, we add a
direct sales force through selective distribution. We only sell our coffee to a
limited number of retailers. In order to get Bad Ass Coffee you must got to one
of our many coffee houses in the U.S. or order directly through us. Only a
select few specialty stores carry our product. We want our coffee to be a
delicacy. II.) Marketing Objectives: Where do we want to go? A.)Sales Objectives
To increase our sales volume in the next year we plan on increasing sales at the
Bad Ass Coffee Company by an increase of advertising exposure , awareness of our
products to the public, educational seminars such as the one held at The
Specialty Coffee Association of America trade show in New Orleans, new target
market of the young coffee drinker, and entering the global market. By using
trend analysis which involves forecasting future sales by analyzing the
historical relationships between sales and time, the following would be a
conservative estimate. Chart on last page! B. Profits Objectives Based on the
Bad Ass Coffee Company’s current distribution methods, our price range, profit
margin, promotions (open house, trade show, and seminars) and high quality of
our products, our current level of sales are anticipated to increase in the
future. The total revenue of Bad Ass Coffee Company can be figured by taking the
price of the product and multiplying the quantity sold. Total Revenue = Price X
Quantity Currently Bad Ass Coffee Company sells to distributors at $75.00 a case
of 6 bags of Bad Ass Coffee. Last year Bad Ass Coffee sold very close to 25,000
cases, the total revenue for this would be $75.00 X 25,000 = $1,875,000 Once
that total revenue is computed, expenses must be subtracted to see the actual
profit accumulated. Profit = Revenue - Expenses With product history and using
the above computations, a profit projection could be calculated. C. Consumer
Objectives The Bad Ass Coffee Company Mission Statement is as follows: "The
mission of the Bad Ass Coffee Company is to provide the best tasting organic
coffee in the universe. To do this, we will sell and roast exclusively organic
coffee. We will support our customers in an effort to spread the word that
organic also means satisfying and delicious. And most importantly to remember
why we started this company in the first place. To put our coffee knowledge to
good use, to live in harmony with the planet, and to have fun doing it." We
want our company to be perceived as an industry leader with innovative, quality
coffee aimed at the serious coffee drinker. The Bad Ass Coffee Company was
recently honored and recognized at The Specialty Coffee Association of America
seminar as 1996’s best coffee of the year. An award which confirms our
commitment to quality. III.) Strategy: How can we get there? A.) Product
Strategy We want our consumers to be happy with every bean they see come out of
our Bad Ass Coffee Bean bags. To meet our consumers needs, we will be trying a
few new ideas. · We will be offering our own line of flavored creamers · A new
and fun bag design is in the process right nowWe will be offering special deals
to preferred customers and offering samples of our new line of coffee out this
summer. We will be offering these and many more things in the future to attract
all different types of coffee drinkers in the United States. Hopefully our new
flavors will attract some new customers and our old customers will spice up
their coffee with our new flavored creamers for a kick of something new. B.)
Pricing Strategy · To help our company grow we plan on putting 50% of our gross
profit this year back into the company. We will also spend a little more on
advertising this quarter. · We will cut back on promotional discounts to no
greater than 5% for special show orders, open house orders and seminar orders.
This will apply to all employees also. · We also plan to stay competitive
within the market category for the coffee industry. In different situations
depending on the customer, the following would be a possible price concession in
the market of our product. · Cash discounts if the product is paid for in
specified terms. · Quantity discounts for truckload orders. · Promotional
allowances · Salesperson discount · Credit towards products · Commission C.)
Distribution Strategy There are several channels of distribution that can be
used. If the buyer meets the Bad Ass Coffee Company standard credits terms ,
buying minimums, ect. The following flow chart depicts the possible distribution
methods available with Bad Ass Coffee Company. Wholesaling Intermediaries
Manufacturer- Independent Retail-Owned Owned Wholesaling Cooperative and
Facilities Intermediaries Buying Offices Merchant Agent and Wholesalers Brokers
To make distribution possible there are a few things required. · Warehouses
around the country · Truck Docks · Appropriate machinery · Personnel to run
the business These facilities can be located anywhere in the U.S. as long as the
right facilities are present and they meet the Bad Ass Coffee standard credit
terms and meet the following requirements · Represent Bad Ass Coffee Company in
a professional manner. · That we have large enough facilities to hold our
products. · Easy access to hold products. · Easy access for our truck to load
and unload. · That we keep a clean and safe work area. D.)Promotional Strategy
Personal selling will be very critical. It is important to develop a customer
relationship where a win-win situation can occur creating long-term
relationships with you customers. Once the salesperson had identified a
qualified prospect, he or she collects all available relevant information and
plans an approach- the salesperson’s initial contact is an invaluable step. A
presentation will follow so the client can be familiarized with the product. The
actual moment of truth is the selling aspect of our product which can also be
called the closing. The amount to be spent on advertising is at the discretion
of the sales people in the field. Cooperative advertising budgets, marketing
development funds, ect are all budgeted every year to the sales department,
although the ultimate responsibility for advertising decision making often rests
with top marketing management, the organization of the advertising function
varies among different products in our company. Bad Ass Coffee Company spends
approx. $26,000 a year on advertising alone. We spend our money on such things
as attending trade shows throughout the U.S. Advertising our product is
essential in good yearly sales quotas. Some of the money is spent on advertising
Bad Ass Coffee company in trade flyers, and by advertising products in trade
publications to increase buyer awareness around the country. Promotional
activities will include offering discounts for trade shows, open houses, and
educational seminars across America. Bad Ass Coffee Company also uses
independent advertising agencies because they typically are staffed with highly
qualified specialists who provide a degree of creativity and objectivity that is
different to sustain in corporate advertising departments. E.) Financial
Strategy 10% of Bad Ass Coffee Company’s budget is allocated to marketing, of
that, 10%-30% is spent on advertising alone. My proposition is that 15% will be
spent on current advertising methods with the national trade publications. The
remaining 15% will be spent on new advertising for the targeted young customers.
I we do not accomplish this plan, Bad Ass Coffee Sales could begin to level off.
It is necessary to keep the wheel turning, finding new buyers to replace the
ones that no longer exist in our market. My goal of targeting the younger buyer
could continue to increase the sales of the Bad Ass Coffee Company.
Bibliography
www.inc.com/incmagazine/archives/019305.html www.nerdworld.com/user/dstein/nw204.html
www.angelfire.com/mn/stenmark/coffee.html www.iluminatus.com/fun/agogo/coffee_a_gogo.html
www.bid.com/bid/cybercafe/occmiss.html www.cappuccino.com www.blackhills.com/-hrtearth/jit.html
www.jit.com/coffee.htm