Starting a Business and Fundamentals of Marketing

This report provides a marketing plan for a new cafe, Little London, in London, UK. It includes an overview of the proposed business idea, evaluation of the external environment using PEST analysis, competition analysis using Porter's five force model, and target market suggestion based on age and income segmentation. The report emphasizes the importance of unique selling propositions and effective marketing efforts for the success of the business.

Starting a Business and
Fundamentals of Marketing

CONTENTS
INTRODUCTION......................................................................................................................1
OVERVIEW OF THE PROPOSED BUSINESS IDEA............................................................1
AN EVALUATION OF THE EXTERNAL ENVIRONMENT (PEST)...................................2
PEST analysis.........................................................................................................................2
DISCUSSION OF COMPETITION AND COMPETITVE ADVANTAGE............................3
Porter’s five force model for competitive analysis.................................................................3
Competitive advantage...........................................................................................................4
SUGGESTION OF THE PROPOSED TRAGET MARKET....................................................5
CONCLUSION..........................................................................................................................5
REFERENCES...........................................................................................................................6

INTRODUCTION
Talking in relation with business, it is being defined as a crucial manner of obtaining
profit by making use of the current assets in which there is a requirement of compliance with
the ethical laws and moral duties of the country. Marketing on the other hand, is the way by
which the products along with the services are being raised in the market by adoption of
advertising plus selling approaches. Marketing plan is crucial for attaining success and
growth of the business (Kotler and Armstrong, 2018). Based on this, the aim of the present
research report is to prepare a marketing plan for the novel business of introducing a café in
London, UK. The report will reflect the overview of the business idea and will evaluate the
external environment through seeking help from PEST tool. Competition and competitive
advantage of the related will be discussed and suggestion for target will also be proposed.
OVERVIEW OF THE PROPOSED BUSINESS IDEA
In the current research report the new business being proposed by the researcher is the
introduction of the new café known as “Little London” which will be a service cafeteria near
the river Thomas near to the London Eye. This business is being proposed due to the fact of
rising development of the place where most of the people visit on a daily basis and feel sense
of relieve from the stresses of daily life. In this café, guest can enjoy with their friend and
family over a cup of coffee and snacks. The cafeteria will provide magazines for the clients
who have a keen interest towards reading over a cup of coffee (Wu and Mohi 2015). A
provision of live music will also be present for the music lover clients. In addition to this, this
new bran that is Little London will strive towards opting best probable efforts for
development of cafeteria into a place where all the clients will get a prospect to socialize with
other in a stress-free and calm atmosphere. Other than this, the amin key to success for this
new café is nothing but offering beverages as well as suitable foods at best quality to the
clients with classy entertainment, offering appropriate and effective training to the workers so
that they can deliver best services, effective marketing efforts to promote and generating
awareness of the new business across London and other nearby parts and maintaining quality
of food and beverages to be served to the clients. Furthermore, the Little London café will be
established by the joint partnership of two owners and both will hold equal stake in the
business (Cafes & Coffee Shops in the UK - Market Research Report, 2022). Additionally,
different facilities will be offered to the clients at the café such as musical ambience, reading
desk, separate washroom for men and women and wide range of food choices and drinks.
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AN EVALUATION OF THE EXTERNAL ENVIRONMENT (PEST)
It is very important for any business to analyse the external business environment in
which it operates for the smooth and effective functioning of the business. there are different
factors external to the business which impacts the operations and success of the business and
this needs to be determined. This can be done seeking help from the PEST tool. It is the
effective tool for offering support to the firm in reaching the desired objective efficaciously.
The illustration of the external environmental factors that might influence the operations and
working of the new proposed business that is Little London café is done in the subsequent
paragraph:
PEST analysis
Political factors
Political factor is one of the most important factors that should be taken into account
by the new business prior commencing the business as these factors can severely impact the
functioning of the new business (Mintel, 2017). It is crucial that the new café should abide by
the laws and legislations of UK and should abide by the fair-trade prices. Further, the
political condition in UK is quite stable which will help the firm in expanding their business
effectively. nevertheless because of the global coronavirus pandemic, there has been
decreased in the level of export and import and this might impact the supplying of raw-
materials for the new café. In UK, there are different norms being established by the
government in regards with the environment and infrastructural development which should
be kept in mind and must alter their strategies accordingly.
Economic factors
There are different economic factors such as income level, price, growth of the
economy, GDP etc. that might influence the working of the new café. Talking in relation with
the growth of the consume income in the recent decade, there has been rise in the beverage
intake. Beverages are now being playing a premium role which in turn has incremented the
profit levels of the business concern. Other than this, most of the people in UK are
considering coffee as a luxury item that they can afford and therefore, has allowed more sales
of premium grade coffee. However, because of the recent pandemic, there has been rise in the
level of unemployment and even the disposable income of the people has decreased which
can dent the profit margins of the new business. in addition to this, people are spending
cautiously and less on expensive products (Akinboade, 2015). Thus, it is crucial that the new
café has to adjust their labour and operation costs as per the change. Further, the pandemic
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has also impacted the supplying of materials which might make it difficult for the café to
source materials such as beans, exotic vegetables and other food stuffs.
Social factors
In the recent times, as confirmed by numerous studies, people in UK are more
concerned towards maintaining a work life balance, altering family and working patterns. In
addition to this, more and more people are becoming health conscious and thus, preferring
healthy food and drink choices. All these situations offer immense opportunities to Little
London café to dig into these requirements and preferences of the customers and offering
them their required food and drink choices in order to be successful. However, because of the
growing concern towards health, some of the people have reduced their coffee consumption
and thus might pose a threat to the café industry. Due to global pandemic, the eating and
dining habits of the people have also changed drastically and this, might pose a challenge to
the café in regards with increasing and maintaining sales (Hoskins and Preston, 2018).
Technological factors
Because of the current evolution in technology, there has been rise in the café and
coffee industry in UK. Most of the café are making use of genetically engineered coffee seeds
to serve the coffee drinkers across the UK with some of the finest coffee ever. Thus, this
factor should be kept in mind while sourcing materials and beans for coffee by new café. In
addition to this, considering the recent scenario after covid19, most of the café have launched
their own website and application for the ease of the customers. Little London café should
also consider this and must plan in developing an app for attracting large pool of customers.
rising need of internet among them the population is also regarded as the key prospect for
extending the market base, as people are more attracted to places which offer free Wi-Fi
facility (Morgan, Feng and Whitler, 2018).
DISCUSSION OF COMPETITION AND COMPETITVE ADVANTAGE
Porter’s five force model for competitive analysis
Competitive analysis is being referred as an important tool for the firm for
comprehending their position in the market through making comparison with other
organizations operating in the same industry or sector. The new Little London café belongs to
the small business and competitive analysis seeking help from the porter’s model will help
the firm in comprehending the future threat, scope and prospects (Bartels and Johnson, 2021).
The explanation of the model is being done below:
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 Bargaining power of the suppliers – The bargaining power of the suppliers is a strong
force as the number of suppliers supplying good quality materials are quite few and
because of corona pandemic there has been restrictions in import and export which
has restricted café to source materials (Kuo, Chen and Cheng, 2016).
 Bargaining power of the buyers – The bargaining power of the buyers is also a
moderate force as there are many other cafes and restaurant which are offering same
products in the same market. However, the unique selling prepositions of the café and
competitive advantage will help the café in gaining some power over buyers.
 Competitive rivalry – The competition in the café and coffee industry is quite high
and thus, it is a strong force which might influence the functioning and effective
working of the company.
 Threats from the substitute products – This is again a strong force as there are many
substitute products being available in the market such as tea and other beverages. In
addition to this, the switching cost of the clients is also very low and thus, buyers can
easily shift to other products (Abbeychart, 2016).
 Threats from the new entrants – This is quite weak force, as opening a new café is not
an easy task and involves huge investment which restrict the new entrants from
entering into the café industry or market.
Competitive advantage
Talking in regards with the Little London café, it will be developed as an indifferent
cafeteria where the clients other than relishing a cup of coffee will also be able to have
immense pleasure of enjoying the soothing and calm atmosphere. For developing the café
different from the other competitive firms operating in the same market, the new café will set
up dim lights, cushioned couches, inevitable experience of peaceful environment with soft
live music and glass table in the centre for allowing the clients to sit back comfortably. Other
than this, the beverages will be offered at the café as per the choice of the clients. there will
be one more corner in the café which will be dedicated to live music wherein clients can also
come and join in if they wish to sing (Brooksbank, 2019). The café will also make use of
unique marketing strategy through offering coffee beans to those clients who consider
relaxing over a coffee at home instead of cafeteria.
SUGGESTION OF THE PROPOSED TRAGET MARKET
It is important that the new café Little London should target in such a manner that the
revenue generation can be increased and long-term sustainability of the café can be
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maintained. A strong association with the clients will be established. Nevertheless, it is
crucial to keep in intellect that there are many other cafes present in the market of UK and
thus, it is important that the new café should emphasize on varied segments instead of one to
be more successful. This new café will target the market on the basis of age and income
segmentation in the market of UK. Young adults, men, women belonging to the age group of
18 to 35 years will be the target market for high caffeine hot and cold coffee and 35 to 60
years for premium taste of coffee. In addition to this, on the basis of the income level, the
urban customers falling in the income level of middle to high will be targeted by the Little
London café (Alharthey, 2020). Other than this, the café will set their menu by taking into
account the prices and rates of both competitors and income level of the target market. Young
age people will be attracted by the café by offering discount coupons.
CONCLUSION
Based on the evaluation being done in the above section it can be concluded that
PEST tool has supported in comprehending the external environment that might have some or
the other influence on the effective conducting of the new business. further, it was explored
from the study that it is crucial that the new café should take into account the political
conditions like, legal outline, Brexit and cultural factors for attaining higher success.
Discussion on the competition has reflected that the industry in which the new business is
being proposed is highly competitive and consequently, efforts should be made on offering
unique products and services for attaining competitive advantage.
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REFERENCES
Books and journals
Akinboade, O.A., 2015. Determinants of SMEs growth and Performance in Cameroon’s
central and littoral provinces’ manufacturing and retail sectors. African Journal of
Economic and Management Studies. 6(2). pp.183-196.
Alharthey, B., 2020. The Role of Online Trust in Forming Online Shopping Intentions.
International Journal of Online Marketing (IJOM). 10(1). pp.32-57.
Bartels, D.M. and Johnson, E.J., 2021. Connecting cognition and consumer choice.
Cognition. 135. pp.47-51.
Brooksbank, R., 2019. Essential Characteristics for an Effective Marketing Plan. SAGE.
Hoskins, L. and Preston, R., 2018. Behind the Scenes: Participants and Processes in the
Development of London’s Interwar Suburban Shopping Parades. 6(1). pp.99-121.
Kotler, P. and Armstrong, G., 2018. Principles of marketing.17th ed. Pearson Higher
Education.
Kuo, T., Chen, C.T. and Cheng, W.J., 2016. Service quality evaluation: moderating
influences of first-time and revisiting customers. Total Quality Management &
Business Excellence. 93(3/4). pp. 429-440.
Mintel. 2017. UK Coffee Shops Market Report. Mintel Group Ltd.
Morgan, N.A., Feng, H. and Whitler, K.A., 2018. Marketing capabilities in international
marketing. Journal of International Marketing, 26(1), pp.61-95.
Wu, H.C. and Mohi, Z., 2015. Assessment of service quality in the fast-food restaurant.
Journal of Foodservice Business Research. 18(4). pp.358-388.
Online references
Abbeychart. 2016. The rise of independent coffee shops in the UK. [Online]. Available
through: <http://www.abbeychart.co.uk/news/the-rise-of-independent-coffee-shops-in-
the-uk/>. [Accessed on 19thJuly 2022].
Cafes & Coffee Shops in the UK - Market Research Report. 2022. [Online]. Available
through: <https://www.ibisworld.com/united-kingdom/market-research-reports/cafes-
coffee-shops-industry/>. [Accessed on 19thJuly 2022].
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