Marketing Mix for Marvin and Smith's Coffee Shop

This assignment discusses the marketing mix strategy for Marvin and Smith's coffee shop, considering product, price, place, and promotion. It also evaluates the cafe's financial position, finding it has high liquidity and is able to manage its operations effectively. However, there are issues regarding political, economic, and cultural factors affecting human resources and marketing management. The assignment highlights the importance of these factors in expanding the cafe in Finland.

Business Expansion

TABLE OF CONTENTS
1. Justification of the choice of the country:....................................................................................1
2. Marketing mix in relation to expansion:......................................................................................2
3. Potential challenges in between Human Resources Management and Marketing and their inter-
linkages:...........................................................................................................................................3
4. Influence of profitability and liquidity ratio on business:............................................................5
5. Summary:.....................................................................................................................................6
REFERENCES................................................................................................................................7

1. Justification of the choice of the country:
Marvin and Smith’s coffee shop were thinking about the business expansion (Windolf,
2018). After research on the case study it has been justified that Marvin and Smith’s coffee shop
should expand their business in the Finland. It is the best option to grow the shop in this country
because Finland is comes on world's first number country who consume coffee. The rate of
consumption of Finland is 12kg per capita per year, it is very high in comparisons to other
countries in the worldwide.
Cafe environment and life style of Finland:
The trend of consuming more coffee in Finland is due to the extreme cold, the
temperature of such country is go even minus 40 degrees in northern regions of Finland and the
warm cup of coffee invites them to consume and relax (Osiyevskyy and Zargarzadeh, 2015). The
culture of Finland is having a deep relation with coffee. Coffee is almost served in front of
everybody. It is consider as rude to leave any cafe before everyone has finished their coffee. To
open the Marvin and Smith’s coffee shop in such country is quite better choice because this
country is always the attraction point if the tourists. The best place to open cafe in Finland is in
Helsinki as in the heart of the country. Some of the famous coffee house in the city shows the
individual interest in the coffee. In Finland coffee is usually served with the cake. The
combination of the coffee and cakes makes fall in love the people in Finland.
Political conditions and ethics consideration:
Marvin and Smith’s coffee shop should apply for the start up grant to the local
employment and economic office of Finland (Vida, 2015). It is very important to familiar with
the law and regulation in the field. The peoples of Finland is very attentive towards the code of
ethics and rule followed by the cafes and hotels. Marvin and Smith’s coffee shop should have
clear agreement with the concern authority. The political environment in Finland is very
supportive to havi8ng start up of nay new business in the country. There is an rule regarding the
staff working in the enterprise in Finland that should be must followed and the rules and
regulations regarding the start up should must be followed by the Marvin and Smith’s coffee
shop. For having an impressive image in the Finland Marvin and Smith’s coffee shop has to do
their business ethically and with loyalty.
Geographical conditions and suitability of business:
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The geographical condition of Finland is very cold sometimes the temperature is going
on minus 40 degrees in northerns regions. That is why the individuals of the country likes to take
coffee because the warm cup of coffee gives them pleasure and attract more them in such season.
The business expansion idea of Marvin and Smith’s coffee shop in Finland is more suitable
because peoples in the locality usually like the traditional coffee but they loves try modern and
different taste that can be offer by the cafe. Helsinki, Finland is tourist place and there are many
tourist come in the city to visit and the attractive and different taste which offers by the cafe will
definitely attracts the tourist to visit the cafe-house.
2. Marketing mix in relation to expansion:
The marketing mix is the set of action that can be use as to promotes any firm's brand or
products in the given market (Lynch and Jin, 2016). But for meeting to the success Marvin and
Smith’s coffee shop needs to having an effective plan. For the better execution the coffee shop
has to make sure that the four elements of the marketing mix should be surely. The four P's of
marketing mix are product means which product to be severed, price means at what price it can
be sold, place means choosing the best place to establishment and running the business
successfully and last and much important factor is promotion of the cafe and the speciality of
coffee that can be served in the cafe house.
Product:
Product that can be served by the Marvin and Smith’s coffee shop (Boerschinger,
Svitavsky and Yoder, 2017). The coffee which is severed in front of the crowed of Finland
should be gives the minimum level of satisfaction to its consumers otherwise the overall
performance by those marketing mix can not be worth if the basic thing i.e. product is not gives
the minimum level of performance. The product should not only deals with the physical things
that is the taste of the coffee but it also considers the intangible things like supervises provided
by the staff and customer satisfaction from those services and they were treated may also
covered in under the product element of such marketing mix. The product with the different
culture can also attracts the customers, if the Marvin and Smith’s coffee shop will tie up with any
delivery chain than it will provides the cafe with an new concepts those who wants to enjoy the
coffee but can not come to the cafe due to office reasons and other can also being the customers
of the cafe and it will creates the excellent customer services and helps the Marvin and Smith’s
coffee shop to creating and capture the huge demand of market in Finland.
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Price:
Price refers to the value of the product that can be charged to the customer in the
consideration of the product and its services (Hinings, 2017). It is totally depends upon the cost
of production, target market and the ability of market to pay for the product. To manage the price
is the most difficult task to the Marvin and Smith’s coffee shop because there are many more
cafes in the location therefore it is not easy to managing the price with the competition in the
market. Marvin and Smith’s coffee shop has use the price penetration strategy as that the shop is
new and different culture. As the cafe should not charge more from the customers in the initial
time, after getting all the interest of individuals they will slightly increase the price (Osiyevskyy
and Zargarzadeh, 2015).
Place:
Place is concerns with the the point where the firm is sold there product. The place
chosen by the Marvin and Smith’s coffee shop is picked after the evaluating the various factors
which will be helps the business to expand successfully (Windolf, 2018). It is situated in the
Helsinki, Finland near the restaurants and hotels which attracts the tourists to visit the cafe and it
is also provides the home delivery facility to the customers. The place which can be decided by
the Marvin and Smith’s coffee shop is best place to starts the new branch of the shop and it will
be survive ion the good conditions.
Promotion:
Finland is a very large consumer of coffee arccos the world. So in the market of coffee
there are many competitors, it is not easy for Marvin and Smith’s coffee shop to survive in the
market with tough rivals. For better survivals the cafe should adopt the better strategies to
promoting their products in market. They can makes advertisement through social media
platform and can promotes through exhibitions and having the promotional sales to attracts the
crowd in the market towards the cafe.
3. Potential challenges in between Human Resources Management and Marketing and
their inter-linkages:
An effective Human resource management strategies is very essential to achieve the
success in business and in meeting the goal in an effective and efficient manner (Noe and et.al.,
2017). The factors that influence HR activity are not stable in nature. Both HR and marketing
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factors are inter-linkage . The Marvin and Smith’s coffee shop are facing challenges in order to
improve the retention and reducing the staff issues in the cafe.
Government regulations:
With the expansion of cafe in new place an human resource department is in the pressure
to stay in between the laws. The regulations that influences the process of HR departments that is
training and development sessions, compensation, termination and hiring and so on are
influences the HR management as well as marketing department of the cafe. If the Marvin and
Smith’s coffee shop's HR dose not follow such guidelines in accordance to Finland rules and
regulations the cafe has been charged extremely high penalty and if it is bad enough than cafe
can be shut down immediately. It also effects the marketing if there is a new rates changes in the
products price then it affects the marketing factors of the cafe. Price can be change due to the HR
regulations such as labour law and so on. High labour rates can directly crises the cost of
production and also the price of the product (Osiyevskyy and Zargarzadeh, 2015). It leads to the
cafe will no longer able to provide customer satisfaction with the price factors and HR polices
that is how rules and regulations or the political factors can be influences on expansion of
business.
Economic conditions:
Marvin and Smith’s coffee shop have to consider the economical condition of the
Finland. The should having the stable growth in the economy which means the country have an
opportunities to developed itself. It will be affects the human resources management as
management has to put extra efforts to bring the effective talented employee. If the economy is
about to downturn there is no effect of marketing on the selling. Marketers has to selects the
target customers for the expansion in such economy. It is not only impact on the hiring the
talented applicants pool but it might affects the hiring ability of the firm. I it is not beneficial to
the coffee shop to make an expansion in downturn country.
Customs and Cultures factors:
Finland is very rich city with there customs and traditional aspects and the combo with
Morden individuals. It is probability that they do not like the different cultures and costumes
change. The human resources management should have considered the fact that it does not hurts
the culture and emotions of the staff working in the cafe. Culture factors strongly influences the
behaviour of the customers (Vida, 2015). The Marvin and Smith’s coffee shop' marketers needs
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to understands the culture and values of the country like social harmony, ethics of business
advertisement may not harm the culture of the country and so on. The HR has to make sure that
the cafe culture should be stay relevant.
4. Influence of profitability and liquidity ratio on business:
Profitability Ratios:
Gross Profit Ration = Gross Profit / Net Sales
= 208,000 / 360,000
= 0.57:1
Net Profit Ratio = Net Profit / Net Sales
= 26,800 / 360,000
= 0.074:1
Gross Profit Ration:
Gross profit ratio is shows the relationship between the gross profit and net sales. This
ratio can be used as to test the condition of the business through makes comparison in between
the past records and present data. The change of state in GP can be shows the improvements in
business. Gross Profit ratio should have a consistent growth which means that the business is
growing. The ratio which calculates above is showing the cafe have enough funds to carry out its
expenses. The ratio is more than 50% which shows that there is good revenue earn by the cafe
and have very strong market status.
Net Profit Ratio:
Net Profit ratio is also an implement for identifying the sound organization. It measures
the overall profitability of the business (Gulanowski, Papadopoulos and Plante, 2018). There is
not set standard for the net profit ratio. Higher the net profit ratio sings the higher the efficiency
in managing the operations of the business organization. It depicts that the coffee shop is not
managing its managerial and operational affairs with excellence and the shop is not having
enough profits for its expansion plan. Coffee shop will have to improvise its operations to raise
its profits.
Liquidity ratio:
Quick Ratio = Current Assets – Inventory- Prepaid expenses / Current Liabilities
= 35,400 – 8000 / 6,200
= 4.4:1
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Current Ratio = Current Assets / Current Liabilities
= 35,400 / 6,200
= 5.7:1
Quick ratio:
This ratio also called acid ratio. The major function of this ratio is to measure that how a
firm can meets with the short term goals with the high liquid assets (Alden and Nariswari, 2017).
Liquid assets are those assets which can be turned into cash easily. This calculation shows that
the coffee shop is have a 4.4:1 ratio which shows having more current assets in comparison to
current liability.
Current ratio:
Current ratio shows the capability of firm to pays the current liabilities. The current assets
is should be double of the short term liabilities. The ratio of the coffee shop is 5.7:1 which shows
that the cafe assets is five time more than its liabilities. The cafe will not be depends upon the
outsourcing of debts to run the cafe.
5. Summary:
After all the study it is Marvin and Smith come to the decision that the coffee shop needs
an expansion plan (Lynch and Jin, 2016). Many factors are to be considered in the expansion of
the cafe. After the study Marvin and Smith were decide the coffee shop should be expand in
Finland. Finland is the worlds largest coffee consumer country it is the one of important factor
and it helps to grows the business. Second important factor is the location of the cafe it is located
in Helsinki, in the heart city of the Finland. And near the famous restaurants which attracts the
tourist to visit the cafe and the modern concept of coffee will attracts the local individuals to try
the different taste of it. Marvin and Smith’s coffee shop has to be started with considering all the
marketing mix factors. In which first one is product means what kind of products have to be
served in front of customers, second one is price means at what price it can be sold and price
should be in accordance to the cost of production, competitors of market, buying power of target
market and market segment, the third one is place of the business the location of cafe matters that
if the cafe were locate at the spot light of the city it will be always the centre of attraction. And
the last one is promotion which means to promote the product in effective manner. Marvin and
Smith’s coffee shop were planning to expand the cafe but it has some issues regarding the
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political, economic and culture regarding issues for human resources and marketing section of
the cafe-house (Boerschinger, Svitavsky and Yoder, 2017). It is also evaluate the financial
position of the cafe that it is in the condition to expand or not, the cafe has high liquidity ratio
which means there is a low debts and it is survives their own funds. The cafe is effective to
manage all the orations so it can be expand in the Finland.
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REFERENCES
Books and Journals
Alden, D.L. and Nariswari, A., 2017. Brand Positioning Strategies During Global Expansion:
Managerial Perspectives from Emerging Market Firms. In The Customer is NOT Always
Right? Marketing Orientationsin a Dynamic Business World. (pp. 527-530). Springer,
Cham.
Boerschinger, O., Svitavsky, K. and Yoder, A., 2017. Encouraging Small Business Growth and
Expansion: Ramsey COR Retail Market Analysis.
Gulanowski, D., Papadopoulos, N. and Plante, L., 2018. The role of knowledge in international
expansion: Toward an integration of competing models of internationalization. Review of
International Business and Strategy. 28(1). pp.35-60.
Hinings, C.R., 2017. Book Review: Hyper-Organization: Global Organizational Expansion.
Lynch, R. and Jin, Z., 2016. Exploring the institutional perspective on international business
expansion: Towards a more detailed conceptual framework. Journal of Innovation &
Knowledge. 1(2). pp.117-124.
Noe, R.A., and et.al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Osiyevskyy, O. and Zargarzadeh, M.A., 2015. Business Model Design and Innovation in the
Process of the Expansion and Growth of Global Enterprises. In Global Enterprise
Management. (pp. 115-133). Palgrave Macmillan, New York.
Vida, I., 2015. Retail Expansion into International Markets: The Case of United States Retail
Chains. In Proceedings of the 1998 Academy of Marketing Science (AMS) Annual
Conference. (pp. 502-503). Springer, Cham.
Windolf, P., 2018. Expansion and structural change. Routledge.
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