Assignment Sample on UMKDH3-15-M Marketing Analytics
1. Background to the business and assumptions for the chosen organisation
Numerous studies have showcased that among different sectors of business, the retail sector can be the best choice for stepping into the process of internationalisation. It has been seen that, within the retail sector, the entrepreneur can have an opportunity for having a close insight into the market and will be able to gain a real-life experience of how a business can be maintained and managed in an effective way. Based on these facts, the entrepreneur has intended to open a coffee shop “Café Entre Amis” on the grounds of the United Kingdom. Previous studies have displayed that British people spent 3.9 billion British pounds on purchasing coffee. Based on this particular statistic, it has been thought that opening a cafe can be beneficial for the entrepreneur.
In addition to the above description, the entrepreneurs have intended to serve personalized coffee, where the customers can have pictures of their loved and preferred ones on the coffee. This idea of serving personalised coffee will help this cafe to stand out among its strong competitor ground. Various surveys have proven that customers love to have personalized services especially when it comes to spending time with a cup of refreshing coffee on hand. Based on these proven facts, it can be stated that this cafe, namely “Café Entre Amis” will be able to achieve the intended business profitability by offering personalised services for every customer.
| Mission | To offer customers an opportunity of showing love for their loved ones with a cup of coffee |
| Vision | To establish Café Entre Amis as the prime producer of the personalised coffee in the international market of cafe business |
Table 1: Mission and vision of Café Entre Amis
(Source: Created by the learner)
2. Estimated monthly cash inflows and outflows for the year
Based on the above figure, it can be stated that from the projected monthly cash flow for Café Entre Amis projects, the ending balance is expected to be £ 74,800.00. The Total cash received from operations would amount to £452,280 considering the cash sales would gradually increase with the passage of time. Considering the other cash received, the total cash received at the end of the year is expected to be around £785,000. On the other hand, the cash spent for each month has been projected and it can be stated that Café Entre Amis’s total cash spent on operations would be around £534,100. It is expected to be greater than the total cash received as this cafe is a new start-up and without spending a fair amount in operations, the competitors would overpower Café Entre Amis.
Figure 2: Cash flow of Café Entre Amis for 1 year on a monthly basis
(Source: MS Excel)
The above figure represents when the cash flow would be negative and when it would be positive. In the beginning, the initial cost is high and hence for the initial 3 months, it is expected that the cash outflow would be in negative value. It will gradually rise in the next month as the cafe becomes stable. However, after a successful month, it is expected that the competitors would take steps against Café Entre Amis, which would likely take away some of the existing customers and lower the total cash flow. However, as time passes, it is expected that Café Entre Amis would be able to adjust to its surroundings and make strategic plans to remain in the hypercompetitive market. Therefore, based on the forecast, it is expected that after half a year, the cash flows would gradually increase. [Refer to appendix 1]
3. Estimated income statement for the year
Although it is difficult to analyse the net income of Café Entre Amis within a year, an income statement has been projected to understand what the financial position would be for the organisation in the short term. According to the forecasted income statement, it can be stated that the company is expected to achieve a total sales of £ 785,000 within a year. Even with the sales return, it can be considered that the net income would be around £ 782,500. The gross profit is forecasted to be £ 229,400 and the total operating and non-operating expenses are expected to be around £ 119,100. Hence, after calculation, it is expected that Café Entre Amis Would have a net profit after tax of £ 74,800. [Refer to appendix 2]
4. Forecast statement of financial position one year hence
The projected financial position for Café Entre Amis is shown in the calculations as it has been identified that the company would be able to retain a profit at the end of the year. The total current assets of the company are expected to be £ 211,600 and the total non-current assets are expected to be around £ 408,600. Hence, a total asset of £ 620,200 is expected from the organisation at the end of the year. Nevertheless, the liability of the company is projected to be £ 291,900 due to which the total shareholder equity is expected to amount to £ 444,200. [Refer to appendix 3]
5. Identification and justification of critical marketing processes
5.1 Strategic marketing analysis
In usual terms, the “strategic marketing analysis” has been referred to as “a sort of business plan, presenting an informed blueprint that can be followed in order to have the highest probability of business success”. In order to make an effective business plan and identify the strengths, opportunities, weakness and strength of the business, SWOT analysis of the business have been derived in the below section:
| Strength | Weakness |
| ● Unique style of offering coffee
● The location that is close to public transport ● Owner operated cafe ● Lower operating cost ● More control over the business |
● No built-in brand equity
● Starting cost could be higher than a normal cafe ● Limited experience in running a business (JATMIKO et al. 2021) ● Limited financial resource for running new cafe business |
| Opportunity | Threats |
| ● Ability to attract customers by offering personalized coffee
● Ability to build brand equity ● Ability to expand (Al-Baldawi et al. 2021) ● Ability to hire local people as employees |
● Existence of other competitors
● Limited income of the target market ● Changing market taste |
Table 2: SWOT analysis
(Source: Created by the learner)
In addition to SWOT analysis, in order to have a close look at the external environment of business, PESTLE analysis has been conducted in the below section:
| Political | ● A stable and fair country that offers various opportunities
● The responsible and protective government (Capobianco et al. 2021) ● Higher level of political influence |
| Economic | ● Diverse Economy
● Higher level of GDP (Grassi and Vallati, 2021) ● Brexit |
| Social | ● Offers a large number of benefits in respect to public services
● Cosmopolitan environment (Gyenge et al. 2021) |
| Technological | ● Have much better access to an improved level of technology
● Increased level of expertise in the area of science and development ● Having an effective level of laws in consideration to the intellectual property rights |
| Legal | ● Flexible and robust code of governance
● The government of the United kingdom follows different policies to control prices (Devi and Triyuni, 2021) ● Minimum wage rates |
| Environmental | ● Uk has been surrounded by a large number of natural resources
● Post pandemic situation has been the reason for deteriorating sales of restaurants |
Table 3: PESTLE analysis
(Source: Created by the learner)
Additionally, in order to have an idea about the competitiveness of the target market, using Porter’s 5 forces, a competitor analysis has been explained in the below segment:
Figure 3: Porter’s 5 forces
(Source: Kun et al. 2021)
Bargaining power of suppliers (HIGH)
In accordance with the opinion of Hayati et al. (2021), it can be argued that if the bargaining power of supplier’s increases, the business will fail to gain the intended profitability. Based on this fact, it can be stated that this organisation will have difficulty in gaining profit as the suppliers of the UK have a high power of bargaining as the majority of the cafes have developed a well-balanced supply chain with the suppliers.
Bargaining power of buyers (HIGH)
It has been assumed that the customers’ bargaining power will be a bit higher as strong coffee brands have already been established in the target market (Naskar, 2021). Having built a strong brand image, the competitors have been able to build strong consumer support.
Threats of new entrants (LOW)
In accordance with the pestle analysis of the United Kingdom, it can be stated that after Brexit, as several things of the economy have changed, the threat of new entrants have been lowered. It has been proposed because as per the view of Dube et al. (2019), Brexit has changed the economic and legal ground have been changed a lot after Brexit and thus the market penetration of the UK has become a bit difficult for the new entrants.
The threat of substitution (MODERATE)
It has been encountered by an effective market analysis that this company will have a strong competitive market in the United Kingdom (Oktavia and Suprayogi, 2021). Therefore, it can be proposed that the threat of having subsidiary products within the target market is moderate.
Level of rivalry (HIGH)
In accordance with the effective market analysis, it has come to the forefront that the organisation will confront various strong competitors like “Starbucks”, “Red Roaster” and many more. These organisations have already been able to create a strong brand image and have strong customer support as well which may raise the difficulty for the organisational business and having customer support for “Café Entre Amis” (Tlapana and Sandlana, 2021). Therefore, based on the above discussion, it can be stated that the organisation will encounter a high level of rivalry in the target market of the cafe business.
5.2 Marketing mix planning
In usual terms, the “marketing mix” has been referred to as the “set of actions, or tactics, that a company uses to promote its brand or product in the market”. Based on this fact, the entrepreneur has followed the 4Ps marketing mix strategy as it allows the entrepreneur to create focus on the four integral parts of the business such as “price”, “product”, “promotion”, “place” (Putulowski et al. 2021). On the basis of these four aspects the marketing mix planning for the business of “Café Entre Amis” has been described in the below section:
Figure 4: 4Ps marketing mix strategy
(Source: Prasetyo and Prihatiningtyas, 2021)
Price
In order to establish a new business in a competitive ground like the UK retail industry, the “price” has become one of the delicate aspects of the business. As per the view of Setiyawati et al. (2021), it can be stated, “offering products at premium prices has its advantages as consumers tend to associate more expensive products with better quality”. Based on this opinion, this company has been intended to offer personalized coffees to its target customers at a legitimate price that can be affordable by the target consumers and other people as well.
Product
In accordance with the opinion stated by Vu et al. (2021), it can be stated that the professionals of the organization need to acquire sufficient knowledge about the product that is going to be offered to the customers. Therefore, based on this fact the entrepreneur has conducted an effective market analysis and on the basis of this analysed data, the entrepreneur has intended to serve coffee with the personalized decoration on top of it. As per the market analysis, this unique presentation of coffees will be able to attract customers as no competitors provide this level of personalised offerings to the customers.
Promotion
In order to gain brand equity, the entrepreneur needs to keep an observational eye on the promotional aspects as well. As per the view of Men et al. (2021), it can be stated that promotion of the product increases the sale of the product, as the target market will be able to know about the special offers and the uniqueness of the provided service. Therefore, on the basis of this fact, this organisation needs to adopt general advertising (Grigorov, 2021). This particular advertising style will allow the organisation to promote the product on social media. The entrepreneurs have chosen social media advertising as this has become the current trend of the marketing media.
Place
It can be argued that to gain the intended profitability from the organisational business, the place has been considered as one of the main aspects of the business. Based on this opinion of Thontla et al. (2021), the entrepreneur has planned to establish the “Café Entre Amis” in London.
5.3 Marketing implementation
In the prior of the business start-up, the entrepreneur needs to acquire knowledge about the implementation of the product or services the entrepreneur has intended to offer the target audience. Therefore, the entrepreneur has to follow the STP model in order to develop ideas about “segmentation”, “targeting”, “positioning” of the product.
Figure 5: STP model
(Source: Ma et al. 2021)
Segmentation
In accordance with the statement of Ma et al. (2021), it can be stated that, in order to evaluate marketing implantation of the organisational product, the entrepreneur needs to imply a segmentation process on the market. Applying the STP model the entrepreneur has been able to evaluate that data which denotes that the main target of this organisation will be the persons who are willing to spend time with friends and family with a steaming mug of coffee. Based on this fact, this organisation has targeted the business class people who work in the corporate sector.
Targeting
In order to build up an effective and positive relationship with the customers, the professionals of this cafe must focus on targeting the people who earn more than 20k and want to spend money on relaxation. On the other hand, people aged 25 years to 40 years will be the targeted audience (Lessmann et al. 2021). In addition, the youngsters of 15 years to 20 years can be included in the target people as these people love to hang out and the rate of consumption of coffee is high in this particular segment of the customers.
Positioning
Figure 6: Positioning of product
(Source: Created by the learner)
In the above figure, it has been seen that the organisation has been intended to offer the product at a low price in comparison to the available subsidiary products. It has been intended because the entrepreneurs have seen that, majority of the competitors offer products with either high quality or high price or high price with low quality (Naim, 2021). Based on this market analysis the entrepreneur has intended to offer the product at a low price without compromising the quality of the offered product.
5.4 Marketing control
In order to control different aspects of the target market, this organisation needs to keep an observational eye on the stakeholders’ behaviour. In order to keep that observational eye on the stakeholders’ behaviour, the power interest grid has been followed by the entrepreneur.
Figure 7: Power-interest grid for stakeholder analysis
(Source: Lertnawapan and Thanawastien, 2021)
In accordance with the above figure, it can be stated that this organisation has the requirement of acquiring continuous information, as the power and interest of the stakeholders are high enough. The professionals of this organisation need to have proper and current information about the stakeholders, as the organisational professionals need to achieve the intended profitability.
6. Recommended metrics and control mechanisms in respect of critical marketing processes
In accordance with the calculated cost per acquisition (CPA), it can be stated that this organisational business will be able to achieve success in the cafe business, as this organisation will be able to gain profitability. In usual terms, “Cost per acquisition” refers to “the aggregate cost incurred to acquire a paying customer” (Krimmer et al. 2021). This organisation intends to offer products with low prices in comparison to the other existing competitors without compromising the quality of the product. This phenomenon will influence the customers to visit the store more that contributes to increasing the number of order placements (Prensky et al. 2021). On the other hand, this organisation will use social networking sites to advertise the product. Therefore, automatically, it has been seen that the CPA will be decreased and thus with investing little in customer engagement, the rate of customer satisfaction will be increased.
In addition to the CPA, “Customer Lifetime Value” will be able to manage the mechanisms of the critical marketing process of this organisational business. The usual term “Customer Lifetime Value” (CLF) refers to the “total dollar amount a single account or person is projected to spend on your business from their very first purchase all the way to their last” (AboElHamd et al. 2021). On the basis of the above previous representation of the budget and expenses, it can be stated that in the first few months the CLF can be lowered as the market is highly competitive. However, as time will pass, the organisation will be able to increase the CLF as well.
7. Overall evaluation of the long-term viability of the business
Based on the above discussion it can be stated that this organisational business will be able to achieve the intended success rate in the highly competitive market of the cafe business in the United Kingdom (Miroshnychenko et al. 2021). The above discussion has showcased that this organisation has possessed the potentiality of gaining brand equity and has the ability to achieve intended profitability by achieving the advantage of sheer competition among the existing companies (Janbek et al. 2021). On the other hand, the current location of the cafe will be the capital of the United States. In addition, the entrepreneur has selected the people with high income of business class along with the youngsters (Priadana et al. 2021). This phenomenon will help the entrepreneur to increase the sale of the product and be able to achieve the intended profitability.
Additionally, this organisation has adopted the general advertising process in order to capture the sight of the targeted customers. On the other hand, these organisational professionals intend to advertise the products on various social media platforms based on the increased rate of social media users (SOEWARNO et al. 2021). In addition to all these factors, this cafe brand wants to offer highly personalized products to the target audience as it has been showcased in various studies that personalized products attract customers more than organisations that offer simple products. Based on these particular facts, it can be evaluated that this organisational business has the long-term validity of the business. The facts mentioned previously in this segment prove that this organisation not only will be able to achieve long-term validity of the business, but this company will also be able to grab the opportunity of further expansion in the international market of cafe business as well.
8. A reflection and critique of your learning processes during the module and the assignment
In order to complete this assignment and while going through the learning module different aspects of my skills have been improved and I have been able to identify the skills that are required to be improved in order to avoid mistakes that are made by me in this assignment. In the time of evaluating analytical information regarding the target market of the organisational business, I have been confronted with several issues regarding the selection of the processes of market analysis. On the other hand, I have been able to develop my skills in market analysis. I have been able to gather the necessary knowledge that is required to conduct a SWOT analysis of an organisation.
In addition, I have gathered knowledge regarding the process of conducting PESTLE analysis and the knowledge about Porter’s 5 forces have been enriched as well. On the contrary, I have been able to improve my skill regarding time management as in the completion of this assignment time management has become one of the most important aspects. Additionally, I have been able to acquire the necessary knowledge of how cash flows can be managed in an organisational business. In a nutshell, the experience of making assumptions of the budget has helped me in increasing my skill of managing finance during managing an entire business. Along with these, I have experienced great difficulty in assuming the cash flows due to limited knowledge of real-time business management. In addition to the above-mentioned aspects, despite encountering difficulties, I have been able to develop a balance sheet that forecasts the financial condition of the organisational business. Apart from the assumption of the budget, I have faced difficulty in selecting an attractive name along with an effective mission and vision statement for the business. Therefore, it can be concluded by stating that, despite having several difficulties, I have been able to develop several skills regarding business management that will help me in building my future career.
References
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