Bu362 Beyond the Bean

BU362

Beyond the Bean

Individual Case Assignment

Name: Aahilali Hussein

ID: 153151900

Professor: Dr. Daniel Friesen

July 10th, 2018

Background

Beyond the Bean is targeting a launch of a board game café, the first of it’s kind in London, Ontario, spearheaded by two Western University graduates- David Greig and Angela Peck. Faced with established competitors, both in the specialty coffee and entertainment industry, limited business experience and funding and a lack of personnel, Beyond the Bean seeks to capitalize on a potentially lucrative opportunity in this growing market. (Exhibit 6)

The Problem

Beyond the Bean is challenged with creating an optimal marketing strategy that would allow it to launch the café in Downtown London, Ontario- a location that features a student heavy population. The ideal solution includes a feasible pricing model, targeting the right market segment, promoting the café and deciding on whether alcohol will be served.

The Recommendation

Beyond the Bean should seek to narrow its target segment for its marketing mix to just two major groups- University of Western Ontario students and High School students. The other two groups are either too geographically dispersed and seasonal (Fanshawe College) or unlikely to be interested in the concept (Young Professionals). Narrowing the segment allows for the creation of a more directed and tailored marketing mix.

Of the four elements of the marketing mix, Place has already been determined as Richmond Row was chosen as the location. The proximity to Western is ideal, however, the relative distance to Fanshawe college (10km) means that it would be difficult for those students to frequent the café. In terms of Product, Beyond the Bean has a vast array of board games, a good variety of menu options that it seeks to deliver at high quality and now must decide on whether to serve alcohol. Based on Exhibit 2, it would not be advisable to pursue the liquor license since the target market is severely limited and Beyond the Bean would only be able to reach a maximum of 52% of all the individuals in all four groups. Beyond the Bean would better serve their consumers by avoiding alcohol as a menu offering.

The Pricing model which best favors Beyond the Bean, especially if maximum capacity of 50 customers is achieved, is the $6/person unlimited model. As Exhibit 1 shows, the maximum revenue under this model is $1200 daily, maintaining the customer turnover rate of 3 hours per table and the 12-hour operation of the café. The promotional methods will be geared to ensure maximum capacity as a partnership with Groupon is recommended. Groupon Revenue will total $720 monthly (Exhibit 5) but will most likely drive students to the café and prompt customer loyalty. It is also costs no additional amount to implement other than the provision of discounts. In terms of advertising, a 4x5 inch ad should be printed in the Western Gazette ten times a month and should be supplemented by strong social media presence on both Facebook and Twitter. Links to the Groupon as well as positive Blog reviews should be posted on both platforms to encourage youth and capitalize on reference groups as an effective medium of communication. Even with conservative estimates (50% capacity), and minimum of 30 Groupons, this would lead to a net profit of over $6000 monthly. (Exhibit 5)

The Implementation

The recommendation places a strong focus on targeting students, and positioning Beyond the Bean as an affordable but high-quality entertainment and coffee location, and always updating the board game offerings to stay current. Using Groupon will generate good customer traffic, and ads in the Western gazette, available both in print and online, will boost consumer awareness. A strong social media presence will also help spread the message. Using these methods, Beyond the bean should far surpass the 22 daily consumers needed to cover the fixed costs of operation and turn a healthy profit (Exhibit 4)

APPENDICES

Exhibit 1- Pricing Analysis

[pic 1]

Despite the volatility of option 2, it has higher earning potential and is not restrictive of the number of people per table meaning that even 7 people could be at a single table, space permitting.

Exhibit 2

[pic 2]

The first group of students- Western students aged 19+ eliminated roughly 25% of the population of 30,000 as most undergraduates are 17/18 years old at admission.

The age restrictions, coupled with high training and application costs, as well as the desire of many students to seek a place away from bars and clubs means that pursuing a license would not be justified in the short term.