Sip and Savour Cafe Business: Marketing Fundamentals and Strategies

This report outlines the business idea for 'Sip and Savour,' a cafe in London, focusing on healthy food and beverages. It delves into marketing fundamentals, including Porter's 5 Forces, SWOT analysis, and PESTLE analysis to assess the business environment. The report identifies the cafe's strengths, weaknesses, opportunities, and threats, along with competitive rivalry, the threat of new entrants, bargaining power of customers and suppliers, and the threat of substitutes. It also details the cafe's segmentation, targeting, and positioning strategies, marketing mix (product, price, place, promotion), and competitive pricing strategy. The analysis includes the use of social media, digital marketing, offline advertising, sales promotion, and direct marketing to promote the cafe and gain a competitive advantage.

Starting a business and fundamentals of marketing
Marketing fundamentals plays an important role in achieving
the objectives of the organisation in an effective manner. these
kinds of fundamentals show the major aspects which are
required by the customers in order to understand regarding
any product or service for making a purchasing decision. The
major fundamentals of the marketing include different
frameworks such as pestle analysis, swot analysis, marketing
mix, competition analysis and many more.
BUSINESS IDEA: The business idea chosen is setting
up a café “Sip and Savour” in London city, UK that will
offer healthy and tasty food as well as beverages to its
target-audience as per their needs and wants. The reason
behind choosing cafeteria as a business idea is that This is
an evergreen business and changes can also be made as
per the needs and wants of the customer-base which will
help the owner in chasing competitive advantage within
marketplace.
Pestle Analysis of Sip and Savour:
Political factors: In context to Sip and Savour,
there is political stability in UK which positively
impact the functioning of cafe as government of
UK not frequently make changes in its taxation
policy that will help cafe in earning more and
more profits.
Economic factors: The pandemic situation of
COVID-19 can influence the business operations
of cafe as there can be further economic
lockdowns due to this epidemic. Therefore, Sip
and Savour should frame certain strategies to
overcome such challenges and run its business
smoothly.
Technological factors: Sip and Savour should
establish advanced technologies within its that
will save both cost as well as time.
Legal factors: Sip and Savour must adhere laws
and legislations of UK and work in an ethical
environment to maintain both employee retention
and customer loyalty towards its business.
SWOT Analysis of Sip and Savour:
Strengths:
• Major strength of Sip and Savour
include that it provides high quality
food and beverages to satisfy needs
and wants of customers.
• Another strength is customer-
focussed strategy of cafe to enhance
customer loyalty.
Weaknesses:
• Cost disadvantage is major
weakness of Sip and Savour
because of which cafe face
difficulty in managing things.
• Another weakness
dependence on supply of its
suppliers which increases its
business cost.
Opportunities:
• Highly developed
technologies save both
time and cost of
business.
• Conducting research
and development to
understand customers
perceptions, taste and
preferences.
Threats:
• High
competition is a
major threat for
Sip and Savour as
there are a
number of within
UK include Costa
Coffee, Coffee
Republic, etc.
Competition Analysis
Basis Sip and Savour Costa Coffee
Products Pasta, coffee, pizza,
cake, pastries, pattize,
tea, lemonade, mojito,
etc.
It offers mainly
coffee in different
forms like Espresso,
latte, mocha, cortado,
etc.
Promotiona
l tools
Social media
marketing, online and
offline advertising.
Television
advertising, digital
marketing, etc.
Pricing
strategy
Competitive pricing
strategy is followed to
offer products.
Premium pricing
strategy is followed
for offering products.
Porter’s 5 Forces of Sip and Savour:
Competitive Rivalry: Sip and Savour has many
competitors that creates high threat of
competition for organisation.
Threat of new entrants: There is low threat of
new entrants within food and beverage industry
as UK government has framed certain trade
restrictions which create a barrier for new
entrants to enter.
Threat of bargaining power of customers:
Sip and Savour provides healthy and tasty
food at less prices in comparison to
competitors that maintains customer loyalty.
Hence, there is low threat of bargaining
power of customers to organisation.
Threat of bargaining power of suppliers:
There is moderate threat of bargaining
power of suppliers to Sip and Savour as a
supplier increases its items' prices then cafe
will switch to next supplier offering at
relatively less price.
Threat of substitute: There is moderate
threat of substitutes for Sip and Savour as its
competitors are offering them at less price in
comparison to respective cafe.
Segmentation: Sip and
Savour divides its customers
in different segments based
on geographic and
demographic segmentation .
Targeting:
Sip and
Savour
target its
market on
the basis of
location
and
income
level of the
buyers.
Positioning: As per this
stage, Sip and Savour
advertise its products for
promoting them within
niche market through
using promotional tools
like direct marketing,
sales promotion, social
advertising, etc.
Marketing Plan:
There are four main elements within marketing
plan which are generally comes under marketing
mix tool. These are mentioned as below in
relation to Sip and Savour:
Product The products offered by Sip and Savour include cakes, pastries, pasta, pizza, sandwiches, tea,
coffee, juice, shakes, mojito, pattize and many more.
Price Cafe follows competitive pricing strategy while offering its products to customers for gaining
competitive advantage.
Place Sip and Savour is offering its food and beverages products through offline mode as it has only
outlet where it sells its products.
Promotion The promotional tools used by Sip and Savour include social media marketing, digital marketing,
offline advertising, sales promotion and direct marketing.
References
• Castelo, N., Bos, M.
W. and Lehmann, D.
R., 2019. Task-
dependent algorithm
aversion. Journal of
Marketing
Research, 56(5),
pp.809-825.
• Nguyen-Duc and
et.al.,
2020. Fundamentals
of Software
Startups. Springer
International
Publishing.