Marketing Strategy and Positioning

The Russet Cup utilizes a focus strategy on its market. By specifically targeting three primary segments they can cater specifically to their needs. 

Senior Market (age 45+)

The Russet Cup will target this market simply by its well selected location. Although this demographic group could readily drive downtown, they prefer a local café to unwind and relax and historically become some of the most loyal patrons.

 

Newly Hired Employees

The café will attract regular customers (weekly or more) - particularly the newly employed (first job) by providing free WIFI services and providing interesting games in the customer area. 

 

Young Families

The third targeted markets, younger families, often find that coffeehouse are not ‘kid’ friendly. The company has  long term plans to create a combination coffee shop / play area so that parents and caregivers will have a place to meet with other adults while the children can enjoy the bounce houses, slides and indoor playground equipment. 

 

Positioning Statement

The Russet Cup is a gourmet coffee lover’s gem. It is truly one of a kind coffee house offering outstanding gourmet coffees and blends, served by enthusiastic and knowledgeable baristas, in a warm, relaxed environment. It is the place to go to visit with friends or cozy up in a quiet corner with a good book either from the library or from one of the patron’s personal E-Books. 

 

Pricing Strategy

The Russet Cup primarily utilizes competition based pricing. The café does not utilize coupons and discounts (other than opening promotion) because they believe that the most valuable customer demographic of daily coffee consumers is not influenced by discount programs or coupons. 

 

Promotion and Advertising Strategy

· Online Advertising - The Russet Cup will advertise regularly on popular social media sites, such as Facebook. Compared to traditional print advertising, this is a cost effective tactic that will allow them to reach prospects in a highly targeted way (e.g., based on criteria such as age, gender, geography, etc.).

· Web Site - the Russet Cup will develop a simple Web site, which will provide basic information about the business, the menu, and links to their presence on the aforementioned social media channels.

· Radio Advertising - During the first six months of operation, and during the busy holiday shopping season, the business will advertise on local radio stations.

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Website

The Russet Cup will have a simple website identifying its menu items of gourmet coffees, smoothies and pastries, along with the address, map and hours of operation.   The website will also have a calendar of any upcoming events or sponsorships . The site will also have links to their social media sites – such as Facebook, Twitter, and Pinterest.

 

Marketing Programs

The café will also rely on signage and draw to its location. Price Chopper brings 10,000 shoppers weekly to its location.

Sales Strategy

The Russet Cup will use the following methods to increase sales revenue (as recommended by Andrew Hetzel on Better Coffee, Better Business):

· The menu will focus on the most profitable products sold. The café will always draw customer attention to the most profitable products.

· As warranted, the café will raise prices to bolster brand image. Prices communicate a perceived value of a product; so if set too low, the customers might assume that the beverages are inferior compared to the competition.

· Monitor flavoring inventory – Excess flavoring inventory ties up capital and valuable back room space for storage. The café will utilize 4-6 varieties, including sugar free offerings.

· Control waste and theft – audit sales and inventory reports to evaluate ingredient waste due to inefficient preparation, returned drinks and employee consumption. Retail locations can easily waste 20% or more of their daily sales these three key categories, which is a substantial and unnecessary loss.

· Monitor and evaluate hours of operation

· Run employee sales contests – The baristas are the salespeople and have a great deal of influence over the customer ordering process. All baristas will have some form of sales and customer service training to make each transaction active, rather than passive. Sales contests will emphasize high margin items or cross selling

 

Sales Forecast

The sales forecast assumes a conservative 5% increase in revenues during Year Two and 10% increase in Year Three. The following chart shows estimated sales over the next three years.

 

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