Marketing Plan

for Jerusalem Cafe

Executive Summary

Jerusalem Cafe will be a business unlike any other cafe in Shakiso [Link] business will be
a welcoming and adaptable environment, where people can come for a quick coffee, a lunch
meeting, or a night out with [Link] will provide consistent and superior customer service,
offer quality, local and certified food and beverages, and uphold an environment that
promotes creativity at all times. Through these core values we expect to gain high consumer-
perceived value of the product. This perceived value will enable us to penetrate the market
and gain market share.

From a situational analysis, i have determined our industry to be one that provides food,
non-alcoholic beverages, and amusement services. I have found that although this industry
is highly competitive our business still has the potential to be successful. This is because of
the fact that I have strong product differentiation in a rapidly growing industry . From our
consumer analysis, i have determined that one of our strengths is the correlation of the age
demographics in Shakiso town with our main product offerings. For example it can be seen
that the median age in the City of Shakiso, falls in the age range that consumes the most
speciality coffees from coffee shops. Consumers are also becoming much more socially
responsible and expecting the same from the businesses in which they are purchasing from. i
have taken this research into consideration when creating my marketing plan, and it has
heavily influenced many of my business decisions .The marketing strategy gives direction on
where to focus our resources to gain the most opportunities. Using this strategy i hope there
will increase both in our sales and our competitive advantage. At the Jerusalem Cafe, our
mission is to is to provide our consumers with a unique and welcoming environment, where
they can show case,their creativity in a vibrant social setting. To achieve the mission i have
outlined my company’s objectives into measurable and strategic goals. These goals Include
my projections for market share, sales, and profitability, and my plans to diversify my
product offerings. To determine my target markets i have used age, lifecycle and
psychographic segmentation to break up the market. I determined my two target markets as
middle-aged educated adults and millennials. i have created a positioning statement to
adhere to the two different markets, middle-aged coffee lovers and millennials looking for
an alternative night out. i have determined my points of difference to be that i provide an
atmosphere that promotes a facilitates the creation of art, the fact that i use ethical and local
products, and also as an alternate option for evening entertainment. Because of the
differential aspects of the business i have determined that i will be able to be successful in
the market due to our unique product differentiation.

The marketing program demonstrates the experience i can provide and how that differs from
my competitors. It communicates my idea of creating an environment which promotes
acceptance and happiness. Within the marketing program i have communicated how i plan to
be profitable while still maintaining my core values. These values include community
building and commitment to high-quality local goods. i have planning to promote and
advertise my products and services, using the five components of the promotional mix:
advertising, sales promotion, personal selling, public relations, and direct marketing. The
placing strategy talks about how i have going to physically distribute my product to the
market, and the value distribution chain that is involved with my business. i determined that i
have a level one channel as there are no intermediaries between the company and the
consumer. The customer service strategy refers to the ability to satisfy our consumers by
increasing and advancing our variables, such as workforce, technology, and atmosphere. i plan
to increase out customer service by increasing human resources and training.
I have made projections for my future financial situation. I forecasted a 5% annual growth in

sales for four years, which will then stabilize at 1,066,752 annually. I forecasted to spend
82.5% of our sales on operating expenses, and spend approximately 15% on the cost of goods
sold. This will leave me with a 2.5% profit margin. I also completed a break-even analysis,
which determined that in our first year of business i would need to sell 154, 206 units for a
total annual sales of 894, 397.

I will follow a structured implementation process for the entire first year of business, to ensure
that i follow the goals and objectives outlined throughout the marketing plan. Each section of
the implementation plan will give specific outlines for the promotions, and strategies to be
used during each stage.

In the event that my plans do not work out as expected i have prepared a contingency plan
where i have outlined three major events that could have a significant impact on my business.
In the best-case scenario i have outlined what i will do with the extra cash in the event that
my sales revenue exceed my projections. i have also defined my worst-case scenarios as
falling significantly below my sales projections. The third scenario involves planning for a
lack of interest in the art aspect of the cafe. i have laid out detailed plans on what to do in
each scenario to get the business operating to it’s fullest potential.

Company Description

Jerusalem Café is a locally owned and operated business in shakiso town. i pride my selves in
providing excellent customer service in a friendly, welcoming and adaptable environment. All
of the food and coffee i source is ethical, sustainable, and local when possible. i strive to
enhance the ordinary café experience by offering the unique element of being able to self-
express through many different forms of art.

i hoping to become one of the most popular establishments for people to go to in shakiso
town by offering a product that can satisfy the consumer demand for quality and ethically
sourced coffee, as well as being a place where people can find time to relax by themselves or
with friends. I will achieve this by positioning my business as accurately as i can in the minds
of my target markets, who include millennials, and middle-aged educated [Link] very
optimistic about the success of my business because of the fact that the industry is in a high
growth stage, generational trends seem to be favouring my product offerings, and the age
demographics in in the City of shakiso town are fitting with my business objectives and
strategies.

Situational Analysis

To gain a better understanding of the current and future states of the market i have done a
SWOT analysis, which is a situational analysis done to identify the internal strengths and
weaknesses, and the external opportunities and threats of an organization. i have done a
detailed analysis on three specific areas that will affect our business: the industry, the
competition and the customers.

These analyses allow us insight into what to expect as i penetrate the market as well as what
to expect over time.

Internal Situation

Strengths

- Quality products -

- Strong product differentiation -

Weaknesses

Small, startup
small company

Similar product offerings to the competitors -

Opportunities

- Decreased interest in nightclubs and binge drinking -

- Increased consumer interest in local, ethically sourced products -

- Coffee shops are the fastest growing industry in the foodservice industry -

Threats

- Crowded market place -

The Industry
this industry is quite crowded already, the fact that it is the fastest growing industry in its
market gives it quite a lot of potential to be successful. Especially, because it in corporates
many other factors that seem to be growing in popularity - such as it being an establishment
that features an activity, and sources its products ethically.

The Competitors
Although there are many unique aspects about the Jerusalem Café, there are other businesses
who will most likely prove to be strong industry competitors. I have identified the major
competitors as businesses who provide services that overlap with our own, and are located in
shakiso town- the same geographical location as the Jerusalem Café. Specifically i have
identified the following businesses as competition: Heluya , Rohobot, Family Cafe and
shuferoch cafe.I suspect that my biggest coffee competitor will be Hidaya coffe which is found
nearest to our cafe and have many customers in market. they have recently developed delivery
system to pre-order and deliver to different work [Link] with them will prove to
be difficult, as it is evident that their resources and company experience will be difficult to
compete with, especially as a small startup company.
Heluya, Rehobot, and Family Cafe, are all locally owned and operated business in Shakiso
town. They all sell quality and ethically sourced speciality coffees, and provide their
consumers with a full menu that includes breakfast, sandwiches, and pastries. They will be
strong competitors as they provide much of the same products as we do, and in addition they
attract consumers who want to buy local. They are all already established in shakiso town,
and because of that they will have loyal customers, especially because they have well aligned
their product offerings with the current consumer demands.

Merry Café is a locally owned and operated business, who i suspect will prove to be our
biggest competition in terms of their unique service offering. They promote an atmosphere for
playing games and socializing with friends . They serve gourmet coffees, local craft beer, and
a

Despite the strong competition that i have clearly outlined, i believe that my unique value
proposition will help us to work my way into the market and gain a profitable amount of
market share.

The Customer
middle-aged adults and Millennials are the main consumers of coffees and coffee shops. i
have also discovered the generational trends that are happening with millennials, such as the
decrease in consumption of alcohol. i have also highlighted the importance of being socially
responsible in the eyes of the consumers. In my marketing strategy i will elaborate on this
research to explain my target markets, and why i chose the ones i did.
 Marketing Strategy

Target Markets
Before creating a positioning scheme and a marketing program i evaluated the market and
determined the best strategy for segmenting, which involved dividing the market into distinct
groups. i decided to segment based on age, life-cycle and psychographics. then evaluated the
potential for success in each segment by doing a situational analysis, and decided to target two
distinct segments:middle-aged educated adults, and millennials.

my first target market is middle-aged adults, who have pursued post-secondary education
and are now working in high paying careers. This is because from consumer research i have
found that adults aged 35 to 54 make up 42% of speciality coffee drinkers (Holmes 2012).
We have also found that adults with post-secondary educations are 70% more likely to visit
coffee shops, and also that
the highest proportion of speciality coffee drinkers are adults who make more than 76,000
annually (Holmes 2012). This research allows us to see that targeting this market in shakiso
town makes sense, because of the fact that the median age in the City of Shakiso town is 42.3,
which falls within this target market’s age range
The other target market that i have decided to pursue is millenials. Although they do
represent a significant portion of coffee shop consumers, the fact that they are one of our
target markets is less based on the fact that they are coffee drinkers, and more on how this
generation is often seeking alternate options for nights out with friends (Howe 2016). The
decrease in the party scene, has resulted in a greater demand for establishments to implement
different activities for their consumers to participate in (Howe 2016). The Creative Café is a
place where millenials can come with their friends to create art and meaningful
[Link] perspective to target them, as gaining one of the largest age
demographics in the city will highly increase our market share (Government of Canada 2016).

Point of Differences
There are many aspects of The Jerusalem Cafe that would be considered comparable to our
previously identified competitiors. But, there are a few key offerings that consumers will
more than likely, not find elsewhere. These include:

• An atmosphere that promotes and facilitates the creation of art.

• The products used are always local and/or ethically sourced.

• An establishment that offers consumers - especially those who are under age or who
do not want go to a night club - a place to go for entertainment.

These three points of difference set us apart from other businesses in the industry and give
us a competitive advantage. By providing a place where people can go to create art and
immerse themselves in an expressive and welcoming environment, we offer something
unique to the area. We will be one of the only businesses that offer the combination of
entertainment, food, and beverages in an environment that does not involve loud music and
crowded spaces. In addition we will only offer ethically, locally, and sustainably sourced
products which will satisfy the demand of consumers, and have a positive impact on society
and the local economy.

Positioning

Positioning refers to the process of making target markets aware of your points of
difference. It is essentially how a company and its products are defined in the minds of the
consumer relative to the competitors. Because of the importance of positioning in the
success of a business, we put a lot of thought into choosing how we would position
ourselves in the minds of our two target markets.

For middle-aged educated adults we decided to display our use of local, and ethically sourced
products. We also wanted to position ourselves as the best

gourmet coffee in the market, and imply that we would guarantee their satisfaction. To do this
we will use the following positioning statement:
 • For a hardworking and educated adult, the importance of a quality cup of coffee is
not to be underestimated. That’s why at The Creative Café we only use the finest,
locally sourced ingredients, to deliver you the satifiaction you deserve.

For millennials we chose to demonstrate our unique environment, and the creative activities
that we offer as an alternative to nightclubs. We also wanted to position ourselves as a local
business as this resonates well with this target market. The position statement is as follows:

• At the The Creative Café we undertstand the importance of creating memories for
young adults. Come enjoy a locally sourced dinner with friends, and after put your
creative skills to work. You will leave with a full belly, heart, and a new piece of art.

Marketing Program

Product & Branding Strategy

At the Jerusalem Cafe, i will strive to provide an environment in which individuals have
access to the resources that allow them to express their creativity. The majority of cafés
follow a similar model that consists of providing hot beverages and a cozy space. At the
Jerusalem Café, however, our goal is to enhance the customer’s traditional café experience by
adding a truly valuable element to one’s otherwise run of the mill experience. The way in
which i choose to separate my selves from my competitors is centered around allowing the
consumer to expand their minds through art, as well as, meaningful conversation with other
creative individuals. Our goal is to establish an image of acceptance and friendliness. i wish
to be seen as a place people can go where they are not only included, but where they can make
lasting bonds and friendships. To achieve this, i must brand my selves in an appropriate
fashion. At the Jerusalem Café i will advertise the fact that i were not only a unique business
to shakiso town, but that i support local, as well as ethically sourced goods. i believe branding
my selves in a socially responsible manner will be attractive to my target markets.
 Price Strategy

At The Jerusalem Café, our pricing strategies will consist of cost-plus pricing ensuring . i will
make a reasonable margin.i will also incorporate competition based pricing for certain
products, to ensure that the beverage prices will be comparable to other up scale local cafés.
That being said, i also have a goal to enhance the local community. A certain portion of the
profits will be donated to local charities and organizations in shakiso town. I feel as though
the target market would greatly appreciate this generosity. This in turn would promote brand
loyalty, setting us up for a promising future with a substantial loyal customer base.

Promotion Strategy

Promotion is the communication between the company and the consumer. In order to make the
market aware of your product offering, you must create a promotion strategy that will inform,
persuade and remind consumers about your [Link] this, consumers would most likely
be unaware of your existence, regardless of how great your product or service might be.
Jerusalem Café to some extent, take advantage of all five components of the promotional mix:
advertising, sales promotion, personal selling, public relations, and direct marketing. By
blending all five components i will create effective and integrated marketing communications
(IMC). Because we are a new company, we must start out with strong IMC to ensure market
penetration.

I will use advertising to reach large groups of people in the shakiso town. Because we are just
starting out and our budget is not very large, we will avoid expensive advertising channels such
as television, and stick to medias such as newspaper and radio.

In summary, all five of these tools are important when it comes to creating an effective
promotional strategy. As a startup business the funds for promotion are quite limited, but
 hopefully as we expand and become more [Link] will also be able to expand our
promotions as well.
Place Strategy
In general the value delivery network is made up of everyone involved in getting the product
to the consumer. For the The Jerusalem Café, this network, as well as the distribution strategy
is relatively simplistic due to the small size of the company. For the business, i have suppliers
who give me, the company, the products i need to serve my customers. This means that i level
one channel as there are no intermediaries between the company and our consumers. i will
take a closer look at the three components of our value delivery chain.
Therefore our suppliers are very important to us, as we work closely with them to ensure they
are meeting our first need and our most important supplier are different coffe supplying
company like jima,yirgachefe and limu coffe suppliers . We chose to work with them, because
their values of environmental protection and fair trade align with those company. We also
require art supplies which we will work with different art team in ethiopia.

electricity, water, heat, and internet, as well as the companies who print our menus, and sell us
utensils and restaurant equipmen are also our supplieres.

After the company is supplied with all of the necessary tools, the next step for is to prepare
the product and service to be purchased. Once we do this, we can then move on to the final
step of the value delivery network, which is distributing the prepared product to our
customers.

Customer Service
In order to ensure that our customers are satisfied with the product we must ensure that we
reach or surpass their perceived value by providing them with a quality product. We must
also create a welcoming and suitable atmosphere, through sound, smell, and decor. Most
importantly, we must adequately prepare the staff who will be serving them. After all is
said and done, no matter how great the product or atmosphere is, if the service is
inadequate then the consumer is going to be unhappy with their entire experience at your
business. That is why at The Jerusalem Café, customer service is one of our top priorities.
i want to make sure that our customers receive the best possible service while in our
establishment. We are going to do this by hiring a human resources manager to immediately
implement proper policy, and create an orientation program. This will ensure that our staff
have developed the proper skills to work in the food service industry. By having this human
resource manager working in the business, it will make certain that staff are well trained and
satisfied with the workplace. Having happy employees will translate to happy customers, as
your employees are arguably your most valuable asset when running a business.

Financial Data and Projections

Finances are an integral part of every aspect of a business, and being fiscally responsible as
an entrepreneur is vital to being successful. Below the outlined sales forecast for the first four
years, as well as an expense forecast, and a break-even analysis.

Sales Forecast

A typical, independently owned café generates roughly 2500 birr in revenue daily (Heibutzki,
2011). For our financial projections i am going to assume this to be a reasonable starting
point for our income. However, i am expecting an increase in customers with time, and from
this i am going to forecasting a steady increase in sales by 5% annually for our first four
years. After the four year period we project our sales will stabilize, leaving us with daily
average revenues of 2993birr, and an annual average revenue of 1,066,752 birr .

Annual & Daily Sales Projections

Year 1 Year 2 Year 3 Year 4+

Break-Even Analysis
 The break-even analysis is used to determine when your business will be able to cover all of
its expenses and begin to make a profit. It is calculated using a formula, which is the annual
fixed costs of the business divided by the total annual sales minus costs of goods sold. From
this formula i can determine the quantity of products that need to be sold in order to generate
annual sales that equal total annual costs.
i have averaged all of the prices on the food and beverage menu, and have calculated the average
price per unit to be 5.80 birr. Our fixed cost in year one, as noted in the expenses, is 760, 238
birr. Using these numbers we were able to calculate that the quantity needed to be sold in order
to break even is 154, 206 units, which at a selling price of 5.80 birr is equal to 894, 397 birr in
sales.

Contingency Plan
Despite having a well thought out marketing plan, things do not always work out as
expected. In the likelihood that we are off in our projections we have prepared a contingency
plan to help us respond to significant unexpected events so that we can concentrate our
efforts on running the business as smoothly as possible.

Sales revenue exceeds projections:

If revenue exceeds our projections, we would consider this to be the best case scenario.
Exceeding our expected revenue will allow us to accomplish some of our goals earlier than
planned. We can also allocate more funds into more advertising, employing more staff, and
more event programming. In addition to increasing funds spent of these activities, we will
also use funds to help our community. We will do this by making donations to charitable
organizations that fit our overall business goals, such as the Confederation Centre of the Arts
Foundation, which would use our donation to help funds the acquisitions and conservation
of the art gallery and youth and education training.
Sales revenue misses projections:

In the worst case scenario we fall short on our sales predictions and will have to adjust
accordingly. In the case that we don’t make enough money we will have to let go some of our
staff to still be able to afford to run the business. To get back on track we will need to allocate
available funds towards advertising to raise awareness of our business. We will also begin
asking for referrals from our regular satisfied customers. We will hand out business cards to
our customers stating that “We grow our company through referrals from satisfied customers.
If we provided excellent products and customer service, please tell your friends and
colleagues. If we did something wrong, please tell us and we will fix it. Our goal is 100%
customer satisfaction.” (Emerson 2015). With referrals our customers will be able to gain
customers by letting them know that we are genuinely interested in meeting the needs of our
customers.

An insignificant interest in the art portion of the business:

In the case of customers not wanting to pay fees to paint and craft, we will have to reevaluate
our business plan. I the event that this happens will have to strictly rely on of our food and
beverage sales and possibly eliminate the art aspect of the cafe

or add something new. Without the additional part of the café, we become even more similar
to our competitors, which can be dangerous in a market that is as saturated as the café one.

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