Marvin & Smith Coffee Shop Business Plan

The assignment focuses on analyzing the business plan of Marvin & Smith, a specialty coffee shop located in Sofia, Bulgaria. The report examines their target market, unique selling proposition, marketing mix strategies (product, price, place, promotion), and interior design choices. It also delves into their pricing strategy, promotional tools like social media and traditional advertising, and the overall objective of providing high-quality services and enhancing customer satisfaction.

BUSINESS
ESSENTIALS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
QUESTION......................................................................................................................................1
1. Justification on country's choice for expanding business of Marvin & Smith coffee shop....1
2. Expansion plan........................................................................................................................5
3. The implication of the required for Marvin & Smith coffee shop to cover a wider
geographical area in relation of various country. .....................................................................10
4.Financial information of Marvin & Smith coffee shop..........................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The present research report is emphasized on Marvin & Smith coffee shop and they want
to expand their business in European Union country. For this, it will focus on expansion plan and
open one coffee shop in Bulgaria in EU by considering various factors are ethical, logistical
consideration and structural challenges (Gilmour, P., and et.al, 2013). Apart from this, there will
be also discussion on marketing mix of coffee shop and evaluate their financial position through
ratio analysis that are liquidity and profitability ratio
QUESTION
1. Justification on country's choice for expanding business of Marvin & Smith coffee shop
Hank Marvin and patty Smith are two partners were spent 12 months on research and
plan for open a new coffee shop. Now their dreams will come true as they decided to run their
own business by establish their business in the best location within European Union country
(Lin, 2013). They selected the Bulgaria country to carry out their business activities by targeting
in that particular market. There are various reasons to choose that specific country in EU will be
discussed below: -
Reasons for selecting Bulgaria country
 The Marvin & Smith were spent its valuable time on market research so, they can
effectively open a new speciality coffee shop in the best location. They decided to select
the Bulgaria country in that they deliver their various services or products into the Sofia
target market. The main reason for choose that country is that in the Sofia coffee
community has only online retailers and small basement roasters (Hui and et.al., 2013).
Therefore, there are few speciality cafes exist if it will open a new coffee shop then the
response from customers are positive.
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 The Marvin & Smith has a terminology about the speciality cafes is to deliver a high
quality of products or services at cheaper rate in order to gain competitive advantages.
The Sofia market is the best location within the Bulgaria country as there are lack of
speciality shop used high-quality beans (Kuperman, Gardner and Pryor,2013). Therefore,
there is a huge demand of Bulgaria customers for high-quality of coffee. With regard to
this, in order to fulfil their needs company used high-quality beans in preapring coffee
and offer them at low price to enhance customers satisfaction.
Logistical consideration
The logistical consideration of Marvin & Smith coffee shop is bifurcated into inbound
and outbound logistics. It will be discussed below: -
 Inbound logistics: - It can be defining in that it includes acquiring, storing as well as
distributing raw material that are used to produce a final product during manufacturing
process. The coffee shop used raw material that is the finest quality of coffee beans by
purchase from the Fair-trade supplier in the Uganda (Lin, 2013). Thereafter, they carry
out transformation activities in which they convert the finest beans (input) into coffee
(output) so, they are ready to sold to its customers.
 Outbound logistics: - It is that activities under which the company provide the final
products or services to the potential customers. It involves collecting, storing and
distributing the finished goods into the target market. Marvin and Smith coffee shop sold
their product or services through home delivery, take away services and open new stores
in Bulgaria market etc.
Ethical consideration
The Marvin & Smith coffee shop hiring a Barista employee that serve a high-quality of
services and done multiples jobs. It mainly involves that they provide customer care services,
maintain customer relationship, the fastest delivery, take orders and prepare coffee. They are
those workers who give respect to customer's culture and values in ethical manner (Lindsay and
Norman 2013). Thereafter, firm also trained their employee to provide proper guidance on
ethical values of various different customers so, they provide service ethically and create
healthier environment. Apart from this, they also used strong promotional fair trade and equality
by considering all the ethical aspects to provide information into the market.
Structural challenges
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The Bulgaria country's people like to visit modern places and they spend leisure their
time and the number of visitors attract towards luxurious and high-quality standard in services.
The nature of Sofia is green, fashionable and dynamic due to which number of unique mall
structure established (Mintz and Currim, 2013). With regard to this, Marvin & Smith coffee shop
considered the modern life style while structure their speciality shop interior design in Sofia
market. The company has adopted modern interior design will be described as follows: -
Entrance
Windows and old doors: The new coffee shop is structured by Marvin & Smith by using black
Chalkboard paint on walls and hanging coffee cups that is an eye-catching to the visitors.
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Pool facility: In the interior design of Marvin & Smith coffee shop have speciality that
they deliver a resort services. It will attract the youngster and family towards their coffee shop as
they ready to pay high prices and spend their leisure time (Singh, 2013). Most of the visitor come
in Bulgaria market in holiday with their family and friends so, it will attract them to visit once.
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2. Expansion plan
The Marvin & Smith coffee shop has developed a marketing strategy in order to gain
competitive advantages in the Bulgaria country (Zhong and et.al. 2013). For this, they formulate
marketing-mix that will be discussed below: - Product: There are various type of coffee products offered by new coffee shop that are
as follows: -
 Cappuccino: It is a generally constituted in equal parts of frothed milk, espresso and
steamed milk. All these ingredients make the taste of coffee more delightful and it
attracts the regular customers.
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 Cafe au Lait: It is a most similar to the “Caffe Latte” that is equal ratio of milk to coffee
that is 1:1. It will be prepared from Brewed coffee and the taste is just like a milder as it
consists of 50% milk.
 Ice coffee: It is a just like a normal coffee that is served with the ice and usually other
time it consists of milk and sugar.
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 Cuban coffee: It is just like espresso that is made up of natural brown sugar which is a
mixture of sugar and vigorously results that it is creamy and light brown paste.
 Melya coffee: The coffee is made up of honey that is mixed with unsweetened cocoa
powdered as well as drizzled honey. Thereafter, it will be served with a cream to the
customers.
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 Price: The Marvin and Smith coffee shop charge a high price of their products or
services in the target market. It charge premium prices for specialized items and it also
offers “internet cafe” services (Kuperman, Gardner and Pryor, 2013 ). It also delivers a
free bread and butter as well as salad which involve fries as well as salad as a starter.
 Place: The Marvin & Smith coffee shop distribute their coffee products or services
through various ways. They deliver their product by opening a small shop near the
premium places, malls and airport of Bulgaria market. They also adopt various channels
such as convenience stores, warehouse clubs and grocery stores etc. Apart from this, they
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also provide home delivery services in which people can ordering through online, call
and messages. The new coffee shop gives 24*7 hours of services to their customer
anytime they want. Promotion: The New coffee shop make their presence in the Bulgaria market though
strong promotion of their coffee products or services. It is one the best way through
which the company can able to attract the new customers and public in new target market
(Hui and et. al. 2013). Therefore, the selection of promotion method is different from
firm to firm and have different marketing purpose. In regard to this, Marvin and Smith
coffee shop has adopted various promotional strategy that will be discussed below: - Traditional advertising promotion: For this, they adopt the most effective promotional
tool that is traditional advertising media. It helps them to provide information about its
products or services in local newspaper, magazines and radio television etc. Trade fair: They also used strong promotions through organised fair trade that familiar
the people towards Marvin & Smith coffee shop's products or services. Social media: They adopt the modern marketing technique in this they deliver its coffee's
products through online platform (Singh,2013). It is one the best promotional strategy in
which the information will be given about product on social media websites such as
Facebook, Twitter and Instagram. Thus, most of the people now spend their time on
internet through which they can directly attract towards the coffee.
 Product giveaways:-It is the most suitable promotional tool that allow the new coffee
shop to attract the potential customers from sample product. It helps in marketing a new
food as well as household goods to influence new customers towards new goods. It can
be possible through giving a coffee product sample into the Bulgaria market.
Apart from this, the coffee shop is also adopted mail order marketing techniques that is most
beneficial for them to enhance awareness about their coffee products or services. They can easily
deliver information about product through mail at various places that receive to various types of
customers. The applicability of this promotion tool can easily able to attract the customers from
target market and able to fulfil their objectives. There is one more method that is customer
referral promotion method that is also efficient. For instance, the Marvin & Smith coffee shop
offer discounts and also premium services to the potential target market. The local market
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campaign is also one of the effective promotional technique through which a company can
effectively enhance customer base and capture a market share.
3. The implication of the required for Marvin & Smith coffee shop to cover a wider geographical
area in relation of various country.
 Information system: At the starting level, the Marvin & Smith coffee shop opened their
business around London. In this country, the coffee shop that was set up at initial
information system was only one structured. Therefore, they realized that this
information system is fasted becomes outdated with regard to their business expansion in
other country. The company wants to expand their business into European country in
which they choose Bulgaria market. The main issues form the information system is that
they have to manage its information system with the two coffee shops. For this, reason
the coffee shop has to update their software so, they can able to interact within and
outside the organisation. It will also provide them to keep record all the business
transaction so, they can able to maintain their inventory levels and also outlet (Kuperman,
Gardner and Pryor, 2013). Therefore, it also facilitates the firm to take feedback from
customers so, they can resolve their issues on daily basis.
 Personnel and managing staff issues: The staff worker of Marvin & Smith coffee shop
in London are well trained and they also hire a Bistar employee in London. They are
more expertise in doing all type of jobs that are necessary to run the coffee business.
They carry out various activities that involves customer care services, maintain customer
relationship, the fastest delivery, take orders and prepare coffee. Therefore, the main
issue of personnel for M & S coffee shop in expanding their business in Bulgaria country.
It is due to that there is a difference in culture in both country London and Bulgaria
market.
4.Financial information of Marvin & Smith coffee shop
Particular Formula Amount
Sales revenue 360000
Gross profit 208000
Gross profit ratio GP/ Sales*100
57.7777777
78
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Net profit 26800
Net profit ratio NP/ Sales*100
7.44444444
44
Total assets 113000
Current liabilities (CL) 6200
Capital employed
Total assets- Total current
liabilities 106800
Return on capital employed Sales/ Capital employed
3.37078651
69
Liquidity ratio
Current assets (CA) 35400
Current liabilities (CL) 6200
Current ratio Current assets/ current liabilities
5.70967741
94
Year 2016 Current ratio
5.70967741
94
GP ratio NP ratio
0
10
20
30
40
50
60
70
80
5.76
74.44
Profitability ratios
2016
INTERPRETATION
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Gross profit ratio: It is that type of ratio analysis that show the relationship among the
profit and sales revenue. The formula to ascertain gross profit ratio is Net profit- COGS and it
measures after the division of (GP) gross profit through sales revenue of a Company. It has been
evaluated from the above table and figure the Marvin & Smith coffee shop determine gross profit
in present year that is 57.77 %. It indicated that the company market is stable and it has a
capability to recover their all expenses. It also shows that the firm able to capture market share
and highest profit margin. The company effectively used material and labour due to which they
get positive results.
Net profit ratio: It can be determined by division of Net profit from sales revenue.
Therefore, in the financial information of Marvin & Smith coffee shop get a positive result from
deducting all the variable expenses from GP. In the present year 2016 the coffee shop gets the
Net profit ratio that is 7.4%. It depicts that they have a strong financial position as the result is
positive when the NP ratio is 20 to 25 %.
Return on capital employed: It is that type of ratio analysis in which it shows the
returns of company's capital investment to run their business. It has been interpreted that the
company ROCE is 3.37 times in the year 2016 by dividing sales revenue through capital
employed. The improvement can be done after through invested into mutual funds, government
bonds and issues share of enterprises in Stock Exchange.
Liquidity ratio: It shows the cash flow within the company as the current ratio can be
ascertained through division of current assets from current liabilities. The Marvin & Smith coffee
shop calculate current ratio that is 5.71 in year 2016 and this ratio standard lies between 2:1.
From this, it has been evaluated that the M & S coffee shop have a surplus amount of cash. It
recommended that the coffee should invest their amount of cash on government securities,
mutual funds etc. It will able to generate more capital by invest into growth opportunities.
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CONCLUSION
Summarized the above report it has been concluded that the Marvin & Smith coffee shop
develop their business in which they have a speciality cafe. For this, they target Sofia market into
the Bulgaria country that able them to attain their objectives is provides high-quality services and
enhance customer satisfaction. Thereafter, they formulate effective marketing-mix strategy in
which there are various types of products they involve in their coffee menu. They determine the
culture of target market in which they identify that the people of Bulgaria have a modern
lifestyle. In regard to this, they construct their interior design of coffee shop in modern way in
that they provide pool facility services, self-services, free internet services etc. They also use
black Chalkboard paint on walls and hanging coffee cups that is an eye-catching to the visitors. It
has been also analysed that they choose premium pricing strategy and various promotional tool
that involve social media websites, advertise in newspaper, magazines etc.
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Current ratio
0
1
2
3
4
5
6 5.70967741935484
Liquidity ratio
2016

REFERENCES
Books and journals
Gilmour, P., and et.al, 2013. Customer service: differentiating by market segment. International
Journal of Physical Distribution & Logistics Management.
Hui, S. K and Suher et.al., 2013. The effect of in-store travel distance on unplanned spending:
Applications to mobile promotion strategies. Journal of Marketing. 77(2). pp.1-16.
Kuperman, G. J., Gardner, R. M. and Pryor, T. A., 2013. HELP: a dynamic hospital information
system. Springer Science & Business Media.
Lin, S. M., 2013. Analysis of service satisfaction in web auction logistics service using a
combination of fruit fly optimization algorithm and general regression neural network. Neural
Computing and Applications. 22(3-4). pp.783-791.
Lindsay, P. H. and Norman, D. A., 2013. Human information processing: An introduction to
psychology. Academic press.
Mintz, O. and Currim, I. S., 2013. What drives managerial use of marketing and financial metrics
and does metric use affect performance of marketing-mix activities?. Journal of Marketing.
77(2). pp.17-40.
Singh, D., 2013. The brand personality component of brand goodwill: some antecedents and
consequences. Brand equity & advertising: Advertising's role in building strong brands, p.83.
Zhong, R. Y and Huang et.al., 2013. RFID-enabled real-time manufacturing execution system for
mass-customization production. Robotics and Computer-Integrated Manufacturing. 29(2).
pp.283-292.
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