Marketing and Responsibility

This report discusses the market analysis, demand evaluation, market segment, potential average spend, key stages, analysis of features, possible opportunities, assessment of constraints, possible marketing objectives, pricing strategy, factors affecting revenue and profitability for a new coffee shop in Chinatown, London.

Running head: MARKETING AND RESPONSIBILITY
MARKETING AND RESPONSIBILITY
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Abstract
Restaurant A, which is an owner-managed restaurant, is planning to open up a new
restaurant, Restaurant B in Chinatown, London, in the form of a coffee shop. Just like any
other new venture, this business to needs a thorough market research. The report lays out the
several aspects, which it must consider to make its business successful in this new location,
like marketing objectives, coming up with a proper USP, and pricing strategies.

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Table of Contents
Introduction................................................................................................................................3
Market analysis..........................................................................................................................3
Demand evaluation.....................................................................................................................3
Market segment..........................................................................................................................4
Potential average spend..............................................................................................................4
Key stages..................................................................................................................................4
Analysis of features....................................................................................................................5
Possible opportunities................................................................................................................5
Assessment of constraints..........................................................................................................6
Possible marketing objectives....................................................................................................6
Pricing strategy...........................................................................................................................7
Two factors to affect revenue.....................................................................................................7
Three factors to affect profitability............................................................................................7
Conclusion..................................................................................................................................8
Self evaluation............................................................................................................................8
References..................................................................................................................................9

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Introduction
Restaurant A, is thinking of opening up a new restaurant, which would referred to as
Restaurant B for the purpose of this report, near Chinatown, London, UK. This calls for a
comprehensive report which the owner of the restaurant will consider before opening up the
branch, helping him to market and sell appropriately in accordance with the market
dynamics, which make the venture a profitable one. This is the reason why the main thing to
consider in this regard, is the type of restaurant which Restaurant would be, and the
competition which it would be facing. In this report, Restaurant B would be a coffee shop.
The research that has gone behind the preparation of this report is a secondary one, seeking
information from organizational websites and academic journals.
Market analysis
According to Yelp.co.uk, coffee shops near the area of Chinatown are very
homogenous in nature. This is because, most of them are focused upon making sure that the
food and drinks are good and up to the standards. Reviews in Yelp suggest that the coffee
shops in the vicinity are mostly focused upon the main product, which is tea and coffee, and
confectionary (Yelp 2019). However, the pictures retrieved from the website suggests that
none of the coffee shops have an appealing lighting or interior. This is something which the
new branch can build up, in order to attract more customers, besides keeping up with the
quality of the main product. If that is the case, then Monmouth Coffee and Fabrique Bakery
would be its top competitors, since these have the most appealing interior amongst the rest of
the coffee shops, and they also have a good review on the food and drinks that they offer.

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Demand evaluation
Research suggests that the main thing which influences the demand for coffee in the
region is leisure. Most of the people who visit Chinatown just want some good time, and this
is the reason why the evening time, from 6-9pm is the time when the demand is the highest
for coffee shops in the region (Ferreira 2017). This is not seasonal and is the trend throughout
the year. It is also a perfectly elastic market, since it has high competition in the region, and
changes in prices directly lower down the demand for the product, as per Lloyd and Payne
(2012).
Market segment
The main segment of customers who avail the coffee shops, can belong in any age
group from 21-60, and have an average income of 540 euros (Kim and Lee 2017). However,
it must be noted that young people walk into coffee shops with completely different purposes
than older people. Young people walk into coffee shops, mainly for dates and to hang out
with their acquaintances, while older people just want some leisure time for themselves. The
young population, however, is the largest in number, and therefore, it is recommended for the
restaurant to ensure a couple friendly environment, with a romantic and soothing interior.
Potential average spend
The average spend per customer in the region, is 6.42 euros (Google.com, 2019).
However, considering that the restaurant will be having the USP of a great interior design,
and also an environment designed for the target segment, a more realistic average spend
would be 7 euros.

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Key stages
It is highly evident that the most important thing to do for the restaurant before
opening up in a new location, would be to do a thorough market research. Chinatown is not a
very small place, and the restaurant must figure out the exact location where it should open
up, and whether that location would be noticeable to the target market.
The current idea of investing majorly in interior design and establishing a couple
friendly environment, must be evaluated. This can be effectively done through the use of
questionnaires, for people in the area to fill out.
Concept development must be done in a meticulous manner. The idea should be
conceptualized, keeping the elements that make up for the realization of the idea. For
example, if the idea is to go with the current idea, various elements which make up for the
intended designed, have to be evaluated.
Finally, the restaurant must look into its marketing objectives. Firstly, it must assess
what it aims at accomplishing, and from there, they should market themselves accordingly to
ensure that the marketing efforts lead to those goals.
Analysis of features
The design of the restaurant, as discussed earlier, has to be soothing and classy, and
be perfect for couples and friends. This would create an image in the minds of the public that
this coffee shop is the perfect choice to hang out at, for young people, which would
ultimately lead to attracting more young people in the region, which is the majority of the
market segment. The type of food which the coffee shop would provide will also play a role
in its success, since the market research suggests that the visitors of the competitors are
particularly cautious about the food and drinks that they get served. Services should be

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impersonal, and yet polite, so that the privacy of the young people in the coffee shop is
maintained.
Possible opportunities
The most possible opportunity for this restaurant would be to create a positive brand
image for itself. Amongst so many competitors, it would be highly advisable that the coffee
shop is able to distinguish itself by having a prominent brand image in the market, which
would attract more customers. Services of the waiters must be top notch, and behaviour
towards customers have to be very polite, to build customer relationships. Yelp suggests that
not many coffee shops in the region offer custom drinks, as per the choices of the customers.
This is something which the coffee shop can consider, thus creating another unique selling
point for themselves.
Assessment of constraints
There could be several constraints for the coffee shop in its new venture. Firstly,
Chinatown is not very spacious, and is mostly a crowded place. This is why, it raises a
question as to why couples would prefer entering into a crowded lane, rather than a more
empty space. The skill level which is desired, is expected to be perfect for a waiter. Being a
waiter is not easy, and takes a good deal of training in the field, which poses training costs.
Furthermore, it would be tough to be ensured that hires would be desirable polite to
customers at all times. The Food Safety Act (1990), further lays out a framework for all food
and beverages to be served in the country, thereby limiting the coffee shop from
experimenting with its ingredients, for a unique taste.

7MARKETING AND RESPONSIBILITY
Possible marketing objectives
The possible marketing objectives which the coffee shop can adopt, would be to
create a perception in the minds of the public that the coffee shop is devoted to quality
customer treatment. It can use the tagline, “Do not say please, that’s our job to please you”, to
gain public attention. It can also give discount coupons to the first 50 customers after 6 pm, to
sell more during these peak hours. It can also aim at recording birthdates of regular
customers, and sending them small gifts on their birthdays, thereby tempting customer
loyalty.
Pricing strategy
The pricing strategy would include an estimation of the cost per product. Followed by
that, the estimation of the cost of maintenance and other fixed costs would be divided over all
of the products equally. Then, an estimation of a desirable and realistic amount of profit has
to be done, which would be required to run the business sustainably. After that, this amount
would be further divided across all of the products, and lastly, the figures would be rounded
off.
Two factors to affect revenue
The first factor which would affect revenue in this new coffee shop would be the
number of people who would be turning up to the restaurant. It must be made sure that the
sales and marketing mix of the restaurant is effective to attract a desirable number of
customers, every day.
The second factor would be to make sure that that the location is appropriate. This is
because if the location is in an uncommon place, there would not be many customers turning
up, thereby affecting revenue. Also, if the location is near an already established competitor

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like Monmouth Coffee, chances are that people would still go to that coffee shop, rather the
ones surrounding it, as a result of existing customer loyalty.
Three factors to affect profitability
The first factor to affect profitability, would be the location. This is because some
slots are more expensive than the others, and the higher the rents are, the lesser the
profitability is.
Interior designing costs, such as the costs or rents of furniture and other props would
also inversely affect profitability.
Performance and efficacy of staffs would also be able to make sure that they produce
the best results for the coffee shop at the least possible costs, thereby increasing profitability.
Conclusion
From the above discussion, it can be concluded that the main thing which the coffee
shop has to consider is the fact that it must be targeting the young population, and develop an
atmosphere in the coffee shop accordingly. It is recommended that the coffee shop is able to
price according to the cost estimation, and the desired profitability which it aims at
accomplishing. There are a lot of competitors, and any unrealistic goal would only backfire.
Furthermore, it is recommended that the owner is able to make sure that the location of the
coffee shop is appropriate, such that it attracts the majority of the target segment, and also
makes a desired profit out of it. The fact that a chunk of its target segment might not turn up
in a crowded place like Chinatown, is a possible threat which the business must look into.
Self evaluation
This assignment has helped me in numerous ways in the area of market research. The
most positive thing which I can figure out about my analytical skills, is that they are realistic,

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and are able to make creative solutions for complex problems. Also, I find that I have the
ability to come up with solutions, which are specifically designed for a particular problem. I
do realize that I have the ability to identify a root problem quickly, and design a solution
which perfectly combats the situation. However, there are some areas which do need
improvement. Firstly, I can struggle while making pricing strategies, which led to a pricing
strategy which is not comprehensive enough. Lastly, I need to learn more about factors of
profitability, to be able to ensure a perfect marketing strategy. However, my positives largely
outweigh my areas of improvement, and I do expect a distinction for this assignment.
References
Ferreira, J., 2017. Café nation? Exploring the growth of the UK café industry. Area, 49(1),
pp.69-76.
Google.com. (2019). coffee shops near chinatown london - Google Search. [online]
Available at: https://www.google.com/search?client=firefox-b-
d&q=coffee+shops+near+chinatown+london&npsic=0&rflfq=1&rlha=0&rllag=51512752,-
131014,278&tbm=lcl&ved=2ahUKEwiim-
fgs8_iAhWIPo8KHTmyCGgQjGp6BAgKED4&tbs=lrf:!2m1!1e2!2m1!1e3!
3sIAE,lf:1,lf_ui:9&rldoc=1#rlfi=hd:;si:13835226834735148676,y,j9QmRWORL2o;mv:!
1m2!1d51.520568999999995!2d-0.10752550000000001!2m2!1d51.508213999999995!2d-
0.1435273!3m12!1m3!1d6000.428311414497!2d-0.1255264!3d51.514391499999995!2m3!
1f0!2f0!3f0!3m2!1i420!2i232!4f13.1 [Accessed 4 Jun. 2019].

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Kim, S.H. and Lee, S., 2017. Promoting customers’ involvement with service brands:
evidence from coffee shop customers. Journal of Services Marketing, 31(7), pp.733-744.
Lloyd, C. and Payne, J., 2012. Flat whites: who gets progression in the UK café sector?.
Industrial Relations Journal, 43(1), pp.38-52.
Mensah, L.D. and Julien, D., 2011. Implementation of food safety management systems in
the UK. Food control, 22(8), pp.1216-1225.
Yelp. (2019). THE BEST 10 Coffee & Tea Shops near Chinatown, London - Last Updated
June 2019 - Yelp. [online] Available at: https://www.yelp.co.uk/search?
cflt=coffee&find_loc=Chinatown%2C+London [Accessed 4 Jun. 2019].