4 3 Marketing Strategy Music Caf'e example essay topic

... Executive Summary 1.0 Executive Summary Music Caf'e, unlike a typical record store and caf'e, will provide the consumers an atmosphere they have never experienced before. Through its aggressive marketing tactics the company will attract high traffic of consumers in the community, mainly college students, to create an outstanding place to socialize, drink coffee, listen to and buy music. Music Caf'e consist of two venues, one is a record store and the other is a caf'e. The venues provide music CD's, accessories, drinks and pastries to the customers at a reasonable price. Students, office workers, residents of the community, and tourists can spend their breaks eating, listening to music and socializing at our store.

On their way out they will purchase music CD's or accessories. The caf'e will create some of the desired revenue for the business; however the main source of revenue will be from sales of records and accessories. Since Music Caf'e will be opened in January 2005, it will be designed to match the demands of customers who expect the best. It will be the most up to date record store in New York City. Part of this will be achieved by a trendy appearance and by the technology and services we provide. The caf'e will be design to create a trendy cozy atmosphere, where customers may lounge.

The store will provide the most updated and older music. The business will have computer stations, which allows customers to listen to samples of an artist CD. Music Caf'e will provide an exceptional service by having an outgoing and enthusiastic sales force that has a good knowledge of music. Satisfactory customer service will create an atmosphere for customers to come back for more, thus making Music Caf'e a successful and profitable business.

1.1 Objectives Music Caf'e's objectives for the first five years of operation include: o The creation of a unique, innovative environment that will differentiate Music Caf'e from competitors by bringing people with diverse interests together Maximize revenue while minimizing cost so Create a long lasting customer relationship for the record store 1.2 Mission Music Caf'e wants to establish itself as a strong competitor among the music stores in New York City. Develop an innovative solution to the loss of CD sales by marketing new musical equipments and accessories. 1.3 Keys to Success The keys to success for Music Caf'e are: o The creation of a unique, innovative, and upscale environment that will differentiate itself from other record stores and caf'e shops. o The establishment of Music Caf'e will allow consumers to listen to music, while enjoying a great cup of coffee and baked goods o Providing exceptional customer services. 1.4 Risks The risks involves with starting Music Caf'e are: o Is there a demand for the services that Music Caf'e offers? o Will there be a consistent base of consumers? o Do we have the right products that consumers can easily access and afford?

2.0 The Organizational Plan 2.1 Summary Description of the Business Currently, the music store industry sales are falling due to the file sharing on the Internet and the sale of illegal copies of CD's. Hence, the music stores are competing through their pricing advantages, and offering a variety of products. To set our business apart from the rest of the music store providers, Music Caf'e will provide the consumers a place to listen to and sample the artists' CD before the purchase, while providing a place to dine lightly. The atmosphere would be hip and trendy, while attracting young and old alike to an unusual genre of musical marketing. Music Caf'e provides various types of music ranging from Hip-Hop / R&B to Classical genres.

Furthermore, Music Caf'e gives customers a place to lounge and socialize while drinking coffee and eating pastries. Music Caf'e will be able to attract the consumers to the store through the significant location. The business is situated on 23rd Street, in the area of Gramercy Park / Flatiron, where there is high traffic of consumers in the community mainly including students and faculties attending the college. The location will provide easy access for the students, faculties and community residence. Music Caf'e will operate long hours to cater to the students and other customers that attend day, evening, and weekend classes or are around during those times. In addition, since everyone is always on the go in this "fast paced society", Music Caf'e provides a place to "relax".

The Business Model of Music Caf'e and the SWOT Analysis are explained in greater detail on pages 4 and 5.2. 1.1 Business Model: As the popularity of veteran and upcoming artists continue to grow at a steady rate, easy and affordable access is quickly becoming a necessity of life. Music Caf'e provides the consumer with the ability to access new and old school music, enjoy a cup of coffee, specialty drinks, pastries and share the experience of a comfortable environment. People of all ages and will come to enjoy the unique, upscale and inviting environment that Music Caf'e provides. o Strategy: Provide an atmosphere where consumers can socialize, while dinning, listening to and discussing music Develop lifelong customer relationships Collect customer e-mail addresses, to inform them of the dates of new releases pertaining to their music of interest and of up-coming events and promotions Achieve high financial performance allowing us to fulfill our mission 2.1.

2 SWOT Analysis: Strengths - Music Caf'e needs to evaluate its strengths upon entering the record store and caf'e industry. Our main strength is developing a place where prospective consumers can listen to samples of music upon purchasing and create a place of leisure where they can interact and socialize with other prospective consumers. The industry of record stores and caf'e shops does not provide consumers the opportunity to eat in a caf'e while searching for particular music. Music Caf'e will focus on providing exceptional customer service and knowledge regarding the evolving music industry, by interacting heavily with our customers. Customers will have the option to have songs transferred to their MP 3 players and i Pods. Weakness - Music Caf'e's weakness in the industry will be establishing itself as a well-known record store, as opposed to the competitors, who have profited from the industry for so long.

Opportunities - There are many opportunities than disadvantages upon entering this industry. One opportunity is that Music Caf'e will rely heavily on catering as well as selling records on a smaller but yet profitable scale, something that our competitors cannot achieve because of its large market. Maintaining a caf'e creates an opportunity to attract customers during their breaks, which will result in higher revenue and cash flows. Threats - One of the threats that Music Caf'e may face is competition from other small record entrepreneur ventures that offers similar products and services. Another threat our business will face is the customer loyalty that Virgin Mega Store (located in Union Square) has. Virgin Mega Store is a well-known record store and makes high profits.

2.2 Company Ownership and Legal Structure Music Caf'e is a privately held limited liability corporation, equally owned by Sasson Mahgerefteh, Christopher Ramsaran, Jessica Romero and Saeed Singh. Being a limited liability corporation, allows the company to become protected from any fraudulent act or tort liability. Furthermore, at the same time, the limited liability will avoid double taxation on the company. 2.3 Start-up Summary Music Caf'e's start-up cost will cover: o Music CD's, CD Racks o Computer equipment (kiosks), MP 3 Players, i Pods, and CD Players Accessories for MP 3 Players and i Pods, headphones, and batterie so Coffee and specialty drink makers, tables, and chair so Pastries, coffee beans, cups, napkins, utensils, and condiment so Renovations and modifications to site. The equipment needed for the start-up of Music Caf'e is essential in that consumers can feel comfortable once entering. The equipment and accessories will have to be allocated in ways in which customers are able to locate the products fast and easily.

The caf'e equipments are important to complete the socializing atmosphere for our customers. Customers should feel as if the company is already established and up and running. 2.4 Company Location Music Cafe will be located on 23rd Street, between Park Avenue and Lexington Avenue in the Gramercy / Flatiron District of New York City. The business has a total of 3,500 square feet, which 1,000 square feet is for the caf'e and the other 2,500 square feet is for the record store. Furthermore, we will operate the business from a second floor building to share and lower the cost of rent. This area is heavy populated with other businesses including restaurants, clubs retail stores, and Fortune 500 companies that will be attracted to our business.

2.5 Services Music Caf'e provides the access to the sales of CD's, music equipments and accessories, such as I Pod's, MP 3 Players, headphones / ear pieces, CD Players, and cases for each item. We will offer to customers the option to have the songs of their purchased CD's transferred to their MP 3 Player or i Pod for no additional cost. Music Caf'e also provides consumers with a unique and innovative environment for enjoying great coffee, specialty drinks and bakery items. Furthermore, we will have knowledgeable and upbeat employees to give the customers memorable experiences to maintain customer loyalty. 2.6 Future Services As business grows, we understand consumers depend on new technology, such as innovative gadgets. We will expand our accessory line by providing laptops, pocket pc's and palm pilots.

We will also like to develop a relationship with a high-speed Internet provider so our consumers will have access to the Internet. This access will allow our consumers to search for upcoming dates of new releases, news, special events, and weather and traffic reports. Our company will establish itself for the future by main-training a positive relationship with the Gramercy / Flatiron community. In addition, Music Caf'e will provide for upcoming and veteran artists to come in for CD signings on their release dates.

Furthermore, Music Caf'e will try to obtain a Ticket Master kiosk to sell concert tickets to those that cannot order them via the Internet, via telephone, and via concert venues. 2.7 Management and Personnel Plan Music Caf " es' main officers consist of Sasson Mahgerefteh, Christopher Ramsaran, Jessica Romero and Saeed Singh. All officers with the exception of Jessica Romero will have a BBA degree in Entrepreneurship Management, while Jessica Romero will have a BBA degree in Advertising and Marketing Communications. Additionally, Sasson Mahgerefteh has experience in working in a music store and Jessica Romero has experience in promoting and planning events and tours for entertainment artists.

Music Caf'e's management will be divided into two systems. First, Sasson Mahgerefteh, Christopher Ramsaran and Jessica Romero will all manage the music store. Christopher will be responsible for handling inventory, while Jessica is responsible for the promotion and marketing tactics for Music Caf'e. Along with Christopher, Jessica and Sasson, there will be two part-time employees working for the record part of the store. One of the part-time employees will work the register, while the managers and the other part-time employee help to accommodate the customers. Secondly, Saeed Singh will manage the caf'e, along with four part-time employees.

In the caf'e, two of the employees will work the morning to mid-afternoon schedule, while the other two will work the mid-afternoon to evening schedule. Saeed Singh will be responsible for maintaining the caf'e as well as bookkeeping for the business. The staff of six part-time employees will work a maximum of 30 hours per week at $10.00 an hour. In addition, the management staff will not receive a salary for the first few months or until profits are at a high. 2.8 Accounting and Legal Since, Saeed Singh currently works at an accounting firm, he will maintain the basic bookkeeping the Music Caf'e through usage of an accounting program called Quick Books Pro.

Music Caf'e will hire Dia feria & Knife CPA accounting firm to serve as the tax accountants and will be responsible for the financial statements for the business. For the areas of legal and compliance, Music Caf'e has signed with an attorney to represent and review all legal matters related to the company. The attorney will make sure things are running smoothly and that all rules and regulations are abide d. 2.9 Insurance Music Caf'e will purchase property and liability insurance as well as health insurance and benefits for its employees. The insurance program will include policies for workers compensation, commercial property, and medical payment programs for accidents that may occur while on the job. These policies will make available a variety of coverage types and are subject to various limits and deductibles.

Marketing Plan 3.0 Market Analysis Summary Music Caf'e is faced with the exciting opportunities to cater to the needs and wants of the target market. Music entertainment has been emerging and booming. An enormous amount of old and up-coming entertainment artists are continuously coming out with new music, which allows for the increase of industry sales and customer trends. As an extra service, consumers will have the opportunity to let Music Caf'e transfer their purchased records onto their MP 3 players and i Pods.

Consumers will continue to spend their money on purchasing music products if they are readily accessible and affordable. 3.1 Market Segmentation Music Caf " es' customers can be divided into two groups or segments. The first group wants to increase their music selection by purchasing new and old music. The second group is not as devoted to music, but enjoys an inviting atmosphere outside of their school, office, and home while enjoying a great cup of coffee.

Music Caf'e's heaviest target market falls between the ages of 14 and 29. The lightest target market falls between the ages of 30 and 50. There is a separation between the target markets due to fact that the majority of those consumers that purchase record products are between the ages of 14 and 29. Most coffee drinkers are between the ages of 30 and 50. Despite these broad categories, Music Caf'e's target market can be divided into more specific market segments, students and business people.

Students will make up the majority of the customer base since Music Caf'e will be located a half a block away from Baruch College. There are well over 18,000 under-graduate and graduate students that attend Baruch College. Within the Gramercy / Flatiron community, there are six high schools, and five colleges. Business people will make up a vast amount of the customer base as well. Although students make up the majority, there are numerous businesses within this area, many filled with young and trendy people.

Many businesses can be stressful and so Music Caf'e intends to alleviate their tension by providing a relaxing environment. Many of them listen to music at their workstations and would enjoy being able to pick up a record or two on their way to and from work as well as during their lunchtime. The following is a pie chart and a table showing the numbers of estimated potential customers and their growth for the next five years. Customers want their music collections filled with old and new tunes.

Customers also want to be able to enjoy a relaxed environment by drinking great tasting coffee, eating baked pastries, and talking to friends. Music Caf'e also intends to cater to those that just need a place that's calm compared to their usual dull and stressful environments. Music Caf'e's target markets covers a wide range of ages: from the generation of old school music to the generation of those that cannot ignore the constant music that surrounds them. 3.2. 1 Market Needs Current trends, addiction, and historical sales data ensure that the high demand for music and coffee and baked treats will remain constant over the next five years. There are many students in Baruch College that are a part of a club or an organization that will enjoy to have another environment in which they can enjoy listening to music as well as satisfy their sweet tooth cravings. There are many office workers that need a place to go during their downtime.

This is why Music Caf'e will open early and close late to cater to those that are in the area during the day, evening and the weekend. As entertainment music continues to rise, customers will remain loyal to their favorite artists and other good artists. Music Caf'e's customer can listen to the records of their liking before making their purchases. Music Caf'e will enjoy the advantage of customer loyalty as well as name recognition. Within the next five years, competitors with the same or similar ideas will enter the market. Music Caf'e has set a goal to maintain customer satisfaction. 3.2.

2 Market Trends market survey was conducted as a marketing research tool within Baruch College. Key questions were asked of 100 potential customers. Some of the key findings include: o 82% of the potential customers would come into Music Caf'e just to listen to records before they purchase them. o 93% of the potential customers would enjoy having another "social lounge" to go to during their breaks. o 90% of the potential customers would purchase music products more than usual if Music Caf'e is close to their offices, schools, and homes. o Being able to indulge in a great cup of coffee or snack while listening to music became a well-liked concept. o Over 70% of the student body no longer uses personal CD players, but use MP 3 players and i Pods. 3.3 Service Business Analysis The slow yet steady rate of sales in the record industry is due to the popularity of music today.

Music puts people in a relaxing mood and they need an atmosphere that would match their mood. At Music Caf'e, customers are fully capable of getting that supportive and comfortable environment they seek. Record shops and caf'e owners must maintain a competitive advantage by looking for ways to differentiate their place of business. Music Caf'e's founders realize the strong need for differentiation and believe that the combination of a music record store and a coffee shop is the key to longevity and success. This presents Music Caf'e with a chance to enter into a profitable niche in the market. 3.3. 1 Competition and Buying Patterns Music Caf'e faces competition on three levels.

It faces competition in the retail coffee segment as well as the music segment. The competitors in the retail coffee segment include Starbuck's, Dunkin' Donuts as well as the small vendors on the street. These businesses are located near the Gramercy Park / Flatiron area and target a similar segment to that of Music Caf'e (i.e. university students and business people). The competitors in the music segment include Virgin Mega Store and specialty stores like Circuit City and Best Buy. However, these businesses require the use of public transportation or are roughly a 20-minute walk, too far for customers to get to.

These stores target a similar segment as Music Caf'e. The third level of competition for Music Caf'e is that of Internet music downloads. Internet music downloading has become more and more popular and is often free. Record stores have lost sales due to this and are in constant legal battles, but consumers are now realizing that their home personal computers can be filled with viruses caused by the file sharing and would rather purchase the full record. 4.0 Strategy and Implementation Music Caf'e has three main strategies.

The first strategy focuses on attracting new music lovers by making them feel welcomed and not out of place. The second strategy focuses on attracting and pulling in the veteran music lovers. This is the most important strategy because these customers must be satisfied fully and at all times. The third strategy focuses on forming and building a social environment for all of the Music Caf'e's customers. A social environment will aid in attracting customers that would not normally think about spending a lot of time in a music / caf 'e shop.

4.1 Strategy Pyramids The following subtopics provide an overview of Music Caf'e's three key strategies. 4.1. 1 Attract New Music Lovers Music Caf'e's first strategy focuses on attracting new music lovers. Music Caf'e plans on attracting these customers by: o Providing a novice friendly atmosphere, Music Caf'e will be staffed by knowledgeable employees whose focus is on satisfying and serving customer need so A Music Caf'e employee will always be available to assist those with question so Music Caf'e will offer step by step programs that will allow customers to learn how to download music songs safely 4.1. 2 Attract Devoted Music Lovers Music Caf'e's second strategy focuses on attracting veteran and devoted music lovers. These customers are an important factor of Music Caf'e.

Music Caf'e plans on attracting this type by: o Providing the latest music records as well as the "oldies"o Providing an enormous amount of each genre of music ranging from Rock-n-Roll to Hip Hop / R&B to Gospel Providing fast and up to date download service so Providing a friendly environment 4.1. 3 Social Center The third strategy focuses on building a friendly and social environment for all customers. Different types of music will be played so that customers can get a feel of all music genres and hopefully go out of their normal preference by purchasing other music types. Once on location, customers will feel the relaxing vibe of Music Caf'e by being able to enjoy a hot cup of coffee as well as a tasty snack while listening to their favorite tunes.

4.2 Competitive Edge By achieving a competitive advantage, in the music and caf'e market, Music Caf'e will follow a differentiation approach. Music Caf'e will separate itself by positioning its location in the center of businesses, universities, high schools, and homes. By providing the option to transfer songs onto MP 3 players and i Pods, Music Caf'e has already differentiated itself. In addition, Music Caf'e provides a comfortable and relaxing atmosphere.

With coffee, specialty drinks and baked goods, Music Caf'e is distinguishing itself from other music record stores. Music Caf'e ensures that there is high employee motivation and good sales attitude. 4.3 Marketing Strategy Music Caf'e will position itself as an upscale record retail store and coffee shop. Among the most updated music and variety of genres, it will serve high-quality coffee, espresso specialty for those that do not drink plain coffee, and fresh daily baked pastries. Due to the amount of other record stores within the market, it is highly important that Music Caf'e sets affordable and fair prices on the products and services it provides. As a main source of promotion, advertising will be used to get Music Caf'e's name out there.

Print advertisements will be placed in local newspapers such as AM New York, Metro, and the Village Voice. Advertisement within these newspapers is cheaper than using a big name newspaper like The Daily News. Potential customers will be able to see the advertisements because all three of the above mentioned newspapers are free of charge and many customers read the whole thing from cover to cover. Another advertisement tool is to create fly ers with Music Caf'e's information and have one of the part-time employees pass them out to people walking about on the streets. In the near future, Music Caf'e plans to obtain an official Website, which will allow people to pre order products so that as they walk in they can just pick them up. Shipping the items to one's house costs money on Music Caf'e's part as well and so when the company becomes profitable very shortly, this service can be added.

Flyers within e-mails will be sent out to as many people possible. Lists of e-mail addresses for specific products and services can be obtained through a Direct Marketers List such as Direct mag. com. These lists are readily available via the Internet. 4.3. 1 Pricing Strategy Prices set for the CD's will be sold for $14.99. During the first week of new releases, prices for CD's will be set for $12.99 to gain high profits within the first week of the release date. Prices for coffee, specialty drinks and pastries will be set at a competitive price.

Average price for one of Music Caf'e's coffees will be between $1.09 and $1.39 for small to large cups. Specialty drinks such as espressos will be between $1.49 and $1.89. Pastries that are sold by the pound will be priced at $4.99 a pound. Loose pastries will be priced between $. 50 and $2.50. 4.3. 2 Promotion Strategy Building brand awareness is a hard task to do and follow.

Without customers there is no company. There are several promotional strategies that Music Caf'e can use. The most popular one and the one that works the best is the incentive or coupon offer. Music caf'e will offer 10% off coupons if at the time of purchase, a fly er with the coupon is shown. Obtaining e-mail addresses will double the future newsletter lists. Every e-mail address that we have will be sent a fly er with coupons on it.

Integrated marketing through websites are a sure win as well. Incentives will be posted on the company's Website. Referring 10 other e-mail addresses will get consumers 10% off their next purchase as well. Word of mouth has become the number one brand awareness technique. Consumers would prefer to hear something is good from a friend rather than to waste time and check it out for themselves. Because of this, a customer lists has already been set up.

Through networking, there are many people out there who enjoy the concept and would like to see Music Caf'e grow at an exponential rate. As the company continues to grow, other marketing tools will come in effect. Direct mail through snail mail is a possibility. Company catalogs and weekly promotions will be made. 4.4 Sales Strategy Customer service and satisfaction is one of the main ingredients to a successful business within a retail establishment. Music Caf'e will have two separate types of employees, those that can and will sell vast amounts of music products as well as have an immense knowledge in computers and those that will serve customers when they want coffee, specialty drinks and baked goodies.

Our full-time technician will train those hired for a sales position within the record part of the store. A full-time technician must be on board in the event of computer failures and errors. Salespersons will be highly motivated and enthusiastic in selling Music Caf " es' products to customers. A goal here is to get customers to make purchases on other types of music that they would not normally buy. This increases profits at a faster pace. Making customers feel comfortable is the key here.

Music Caf'e's commitment to a friendly and wholesome environment and helpful service will distinguish itself from competition.