Comprehensive Business and Marketing Plan: Caramel Coffee Bar

This report details the business and marketing plan for Caramel Coffee, a local coffee bar aiming to provide a comfortable environment for customers. It includes an executive summary, outlining the coffee shop's offerings and target market. The report addresses business challenges, particularly competition from established brands, and conducts a PESTEL analysis to assess the political, economic, social, technological, and environmental factors influencing the business. It also examines the coffee market, identifies market needs and trends, and analyzes the target consumer demographics. A SWOT analysis is performed to evaluate the coffee bar's strengths, weaknesses, opportunities, and threats. The report also covers ownership structure, competition, and potential collaborators, providing a comprehensive overview of the business strategy. This report is a student contribution available on Desklib, a platform that provides AI-powered study tools for students.

Executive Summary
Caramel Coffee is a local coffee bar that offers an effective and friendly environment for the
couples to meet and chat till long hours. This coffee house will provide the customers with
snacks along with coffee and other drinks so that the customers will sit for longer hours and have
chat while munching and drinking. There will be sitting as well as standing facility available in
the coffee bar. The bar will be at a central location so that everyone can reach out to this place
easily especially young people. The coffee and snacks will be available at reasonable prices as
majority of the coffee consumers are students who are not in the earning mode. In the Marketing
plan, proper analysis of finance, the marketing analysis, target segmentation and industry
analysis are discussed. Furthermore, the marketing strategy, 4 Ps and ethical and legal issues are
discussed.
The Business Challenge
There can be multiple challenges involved in the opening of a coffee shop especially if a new
business is launched. There are multiple bars for coffee available in the market and all are having
established goodwill and reputation. For a new business to be launched, it is important to
advertise for it and make consumers aware about the product and the unique feature of that
product. Therefore, the biggest challenge for the Caramel Coffee bar is to establish the name and
reputation of this shop among the already existing brand names. Also, it may face the challenge
to formulate the strategies for pricing, distribution and promotion of its services and products.
Initially, the Coffee bar has to bear a lot of cost to make the efforts fruitful and prolific.

Situation Analysis
Analysis of the situation is a significant factor where we get the idea of the
environmental situation which can impact the new business. For this,
PESTEL analysis is done:
Political Factor: the high standards which relates to methods of producing coffee are very
significant in the industry and it can also get the prominence in the political environment. The
pressure that is increasing day by day for the business to operate ethically and morally, that is,
economically, environmentally, sociably responsible. This gets reflected in the industry of
coffee by the raised and increased market value and demand for sustainable and the certified fair
trade and coffee which guaranteed a justified price to the producers.
This is reflected in the coffee industry by an increased demand and rising market value for
sustainable coffees such as certified coffee and fair trade coffee, which guarantees a fair
price to producers. The fair trade market which is now worth £100 million, is growing with
developments such as Tesco's launch of their own Fair trade range. Fair trade is also a
means by which the coffee shop industry can differentiate their products and gain a socially
responsible reputation; Starbucks customers now have the option to buy fair trade coffee.
Oxfam have claimed there is a niche' in the coffee shop market and have responded by
launching their own brand of Fair trade coffee Progresso' which is sold on already
established premises such as bookstores.
Economical:
The impact of coffee on Brazilian economy was much stronger. The greater difficulty of
coffee production and trade established important sectorial linkeages within the Brazilian
economy. Coffee was the foundation of the economy, accounting for 63% of the country's
exports. Brazilian economy went through periods of growth but also difficulties and
increasing trends towards coffee overproduction. The economic performances and
development prospects of many developing countries are largely dependent on commodity
issues. (Photius.com, 2004)
Social:
The coffee market must adapt to a change in consumer attitudes or else it may be
threatened by health and lifestyle issues. In 2003 the hot drinks market declined by an
estimated 2.3%. Consumers, especially young people, are becoming more health conscious
which makes coffee a less attractive choice; the increasing number of alternatives available
such as health and energy drinks are becoming competitors in the coffee industry.

Research carried out by Mintel shows that there is an increased diversification of tea, with a
trend towards premium and herbal teas. The coffee industry are responded to this change
in attitude by provision of de-caf drinks, options such as soy milk, and alternative drinks
such as freshly squeezed fruit juices, chai lattes and herbal teas.
Technological:
Consumers are less inclined to buy coffees and teas in supermarkets due to the wide
variety of coffees that are available in coffee shops today. Hi-tech equipment and premium
ingredients are now easily accessible and are used to make a variety of hot and cold
beverages that are sold in coffee shops; from cappucinos to the ice blended coffees. As a
result consumers are becoming more knowledgeable about the ranges of specialised fresh
coffees and premium teas that are available, and their tastes are changing to accompany
them.
Environmental:
The environmental impact is almost always positive and it is important that coffee
production and processing should be taken into account for environmental needs to make
sure optimal physical sustainability. Even more necessary is that the economic environment
should be such as to encourage stability and reasonable living standards for the populations
involved with coffee and to make sure the sufficient care should be given to make sure the
maintenance of the quality. (Change the environment.)
The Market
Caramel Coffee shop possess vast knowledge about the conditions and situation of market and
also know a lot about the attributes that are common for the loyal and prized customers. Caramel
Coffee Shop leverage the information for better understanding of the consumers to be served and
their needs that are specific, so that Caramel Coffee bar can understand them better and
communicate with those customers. As per the report of small administration of business in U.S.,
70 percent of sales in coffee in the market of U.S. is realized by the leading brands of Coffee
thus making the sales in coffee lucrative and representing the operating income as 2.5 % of sales
and total margin of over 85 percent. The flourishing of sales of coffee shop are the result of
enthusiastic employees’ efforts, who owns strong ethics related to work. The drinks of coffee are

totally popular and famous in the United States because the consumption of coffee amounts to 75
percent of total absorption of coffee in that country. This explains the 7 percent of rate of annual
growth of coffee shops and also represent the fastest increasing segment in industry of food
services.
Needs of the market
The Caramel Coffee shop will provide menu that will be changed almost thrice in a month and
will offer new drinks and coffees along with snacks for the consumer. This patron will earn
access to the Caramel coffee bar with long hours of business and minimal waiting time. All the
products will be priced competitively and customer service will be available 24 hours in a day
and 7 days in a week.
Trend of the Market
The trend of the market is proceeding towards the manner which is considered as sophisticated in
various ways:
Quality of the food: Customers prefer high quality ingredients in coffee industry like assorted
coffee beans, milk powder, sugar and natural flavors as there are number of options available in
the market.
Conversation regarding quality: Patrons recognize the conversation that is intellectual and can
be done in bar as the consumers of coffee are either educated youngsters or family members.
According to a research, owning a coffee shop that features single-cup brewers is going upwards
which is represented by enhancement of minimum 12 percent. Equipment of single cup brewing
provides variety, freshness and convenience as these factors keep the costs low by brewing
particularly a product that is important for every sale. Sales also rise for specialty drinks of
espresso as more shops invest on the equipment that are appropriate to provide these drinks at

more lucrative choice.
Growth of the Market
The growth in food industry market has grown tremendously since 1999 as from 2000 onwards,
many restaurants have opened up and gave an acceleration to their revenue and sales. The trend
of drinking and eating out has become quite convenient as many people are ready to pay for
eating out. It gives a sense of social interactions and fun with people.
Customers
The demographics of the consumer of coffee include adults with age group between 20 years-40
years. Mostly college students and office goers are more addicted to coffee and those who want
to spend their time on chatting along with coffee and snacks. The high aged group do not usually
come into the segment of coffee consumers. Many of the coffee drinkers in adulthood age
admitted that their habit of drinking coffee began when they were in their years of teenage.
Almost 50% started drinking at the age of 13 years to 20 years. Therefore, a lot of expense of
advertising and marketing is directed at young aged people, the practical and experienced owners
of coffee shops will never miss to offer their products to the senior and adult market.
Company Analysis
Caramel coffee Bar sells snacks and beverages and majorly coffee, within its 2100 Square Feet
coffee bar which is located near the Harvard University, Cambridge. The major investing
partners of Caramel Coffee Bar are Raymond and Porter who own total 75% of the shares of
company.
SWOT Analysis of Caramel Coffee Bar is provided below:
Strengths:

 Strong and influential Relations with the outside vendors.
 This coffee bar includes the staff that is excellent to provide services and they are highly
attentive for customers and well trained.
 The company’s conversation system is highly structured as they follow a proper hierarchy
for flow of information.
Weaknesses:
 The brand equity of Caramel Coffee Shop is limited as they are new in the industry.
 The budget to advertise in the market and incur all the promotional expenses are limited
which may affect the company to survive in the competitive era.
 Also, people are mostly habitual of a regular taste of coffee which may be difficult for the
people to change. Thus, introducing a new taste in the market and sustaining that level is a
tough challenge for the Caramel Coffee Bar.
Opportunities
 The untapped market by the renowned brand names can be considered as an opportunity for
the Caramel Coffee Bar as those market may also have target segment of customers who
like the coffee.
 As the people become aware and familiar to the benefits of the system of structured
conversation, it raises the opportunities for sales.
 Through efficiency, the Caramel Coffee Bar can lower their variable costs and increase their
revenue generation.
Threat
 In US, there is huge competition from local pubs and bars to the coffee industry and various
other sources of events from single meetings.

 If any slump occurs in the economy, it can lead to decrease and lowering of spending which
is done discretionary.
Ownership of the Company
Caramel Coffee Bar is registered as Private Limited Company in the Cambridge State. Raymond
owns 55% of the corporation. The minority stakes of Caramel Coffee Bar are owned by his
cousin, Porter.
Competition & Collaborators
Competition
The competition in the industry of coffee includes various factors like existence of already
established names in the market, easy entry policies, less barriers to entry, competitive prices and
quality, Unique Selling point of the brand, special offers, outstanding environment/services,
loyalty programs and premium locations etc. there are more than 20,000 stores of coffee whose
revenue accounts to $ 11 billion annually. The major brand names in the coffee industry includes
Peet’s Coffee, Diedrich (Gloria Jean’s), Tea Leaf and Coffee Bean, Caribou Coffee, Starbucks
etc. there are many local competitors who are present in other industries like gas stations,
convenience stores, fast food outlets, donuts shops, gourmet food shops and quick services.
However, the industry overall is stable, settled and saturated which allows every competitor to
get good return.
Collaborators and Partnership
The partnership and collaboration ties the focus of the industry on innovation of service/products
and growth. It was realized by Starbucks as it accessed the brands like united Airlines, Kraft,
Nordstorm, Bames and Noble and Pepsi to develop new products, reach out to new customers

and also enter the channels of distribution channels like airline industry, cruise lines and grocery.
These strategic alliances allow for extension of channels and innovation. Caramel Coffee Bar
will also enter into the strategic alliance after few years of its incorporation to experience the
same benefits.
Business Climate
The industry of coffee is expected to sustain a stable growth each year as the number of people
who consume coffee increase every day. The climate of the business gives a clear picture about
the success or failure of the company. The success of every industry is based on the appropriate
analysis of factors of PEST. For the industry of coffee, these problems do create issues because
the production chain extends in other countries which is why there are several political,
economic and legal problems connected with it. There are various issues which varies from
country to country. The main factors which affect this industry are discussed with PEST analysis
below:
Political: the political factors which include the attitude of government and relationships pf trade
between the country which produce coffee and country to which the coffee is exported. A
manufacturer of coffee has to watch for the trade relationships with his country and the nation
from where he source the raw material and labor. For Caramel Coffee Shop, the political stability
is very important in the country as it is possible for the Coffee bar to be a victim of any political
attack.
Economic: the economic factors include the power of spending in a specific area as if the
spending power is more, the demand for the coffee will be more. Also, for Caramel Coffee
Bar, the location is near to the university area and it can lead to the
The Strategy

The strategy of marketing will create the awareness among the consumer regarding the Caramel
Coffee Bar that will represent the target market and will also maintain and build the referrals and
loyalty among the customers. The approaches which are mentioned below are adopted by the
Caramel Coffee Shop which comprise of people, product, promotion/advertising, place
(distribution) and pricing.
Marketing Mix
Product: The products of Caramel Coffee Bar constitute a variety of products that is appealing
to the coffee lovers and snack lovers. Most of the snacks are according to the taste of the US
Citizens which is less spicy and more of tangy flavored taste. The young generation wants the
snacks to be light as they are more health conscious than adults. Therefore, the coffee and snacks
and other beverages offered are light in taste.
Pricing: The pricing in the menu of Caramel Coffee Bar intends to position itself slightly higher
than the competitors. This strategy of pricing will aid to increase the income and revenue:
Options for breakfast: $7-$9
Cakes, Pastries and Muffins: $5-$9
Iced coffees and milk shakes: $6
Bottled drinks: $4-$6
Place: In order to appeal the segments, specifically the sit down segment of clientele, there is a
need to clean the premises make it stylish and functional. Almost 75% of the business may come
from the takeaways buyers which may mean that there should be less traffic on the way and
should be obstruction free to make the speed faster of the services. The use of the display will
help to encourage the purchase and also facilitate the easy rescue by customers or staff for the
sale items. The Catering services will be offered according to the specifications of the customers

conforming the positioning of the Caramel Coffee Bar as a leading service.
Promotion: The main message and idea that the Caramel Coffee Bar seeks to communicate to
their existing and potential customers include the offering of an experience that excels the
environment, service values and products that may be appealing to the segmented market of
targeted customers. This message may reach out to the customers via many different methods
 Advertising in local newspapers and magazines: with the help of this medium, the company
can target the potential and existing customers almost daily which may increase the number of
consumer.
 Encouraging and reviewing the articles: the company will publish and advertise various
articles regarding coffee and its benefits, various plantation of coffee, ethical practices of
coffee etc. they are also planning to invite the article and content writing professionals from
the newspaper agencies to discuss the issue and advantage and do research and development
on coffee to publish various articles regarding coffee.
 Use of mails to the business managers: Caramel Coffee Bar will directly mail to the local
businesses and do advertising of the business. The mail campaigning which is done directly
can help to communicate with the agents of the consumers specifically those who need the
services of the catering.
 Online presence: with regularly reviewing and updating the website of the company, Caramel
coffee bar can continue to make its presence online by expanding the proceeds of the plan and
potential customer’s ability to access the information online from a wider area. The message
regarding promotion includes the special days for promotion and discounts, coupons and
vouchers. Caramel Coffee shop will also ensure that the messages for promotion are
accessible and prominent. For Viral Marketing, company will make use of YouTube for

publicizing positive messages.
 Social Networking: this coffee shop will make use of social networking sites to interact with
the management of Caramel Coffee Bar directly for any query or suggestion. The networking
will provide the opportunity to the prospective and new customers to have their say and discuss
the positive and negative communications with the authority of the Coffee bar. A marketing
research has shown that consumers who are targeted through the online media identify the
services and products with all the qualities which are positive as they attribute towards
coolness, immediacy, responsiveness, personalization, trustworthiness.
 Service and products: Caramel Coffee Bar will offer the perfect beans for coffee, ground
fresh beans by Caramel Bar, pastries and cake which are fresh. The best quality will be offered
to the consumers with lowest possible price. Word of mouth may undermine severely the
strategy for marketing.
People: the most significant aspect of the strategy of Caramel’s Coffee Bar is the potential and
existing people. Proper training will be provided to its staff to offer the services and goods as
expected by the people and they will become efficient ambassadors for Caramel Coffee Bar.
The Offering
The Caramel Coffee Bar will make use of the following mentioned strategies in order to achieve
the company’s long and short term objectives.
There will be seminar and music nights at cafe.
 Many different types of coffee beans will be explored and the best taste will be offered by
this bar to the consumers.
 Some special Offers and taste that will be unique to tis coffee bar will be offered which is not
available at any other coffee shop.

 Work hard, confidently, open minded and dedicatedly to achieve the goals and objectives of
the company in the shortest time.
 Partnership with other companies in order to create and develop the positive vibes of the
community.
The Communications Plan
The Plan for Communication in this Coffee shop involves opening of this shop with a grand
opening of this shop. This inaugural event will be announced via flyers in the local area,
newspaper advertising and via word of mouth. The plans for the communication will also include
offering samples or free to give the customers a trial of risk free treats. Desires and interest of the
consumers are very significant factors for the success of the business. This will help the
consumers to taste the coffee even before its incorporation and without paying any amount which
may help to build the confidence in consumers regarding their purchase as they may become
confident about the product they will be purchasing. The Caramel Coffee house will utilize the
relation with public in order to promote their business. This coffee bar will make utilize of the
people in the locality for any promotional activity and increase their involvement with the
company. They will also donate certificates, gifts and baked goods in order to raise the funds
which can also be a part of promotion of their business. The contribution, participation and
sponsorship by the community will provide exposure that is beneficial for the business.
Distribution
The Caramel Coffee Bar intends to channelize its products and services to the ultimate customers
by using different channels of distribution which differ in resources, complexity, and relationship
with customers and costs to operate their channel. The company has reinforced and matched the
objectives and goals of the marketing plan with the channel of distribution. The distribution

channel adopted by the Caramel Coffee Bar involves the following methods of distribution:
Direct selling:
The company will be directly selling its products to the customers in the bars that will be opened
at one place initially and then various franchises will be opened gradually. The benefits of direct
selling involves the reduction of cost as there are no intermediaries and retailers and whole
sellers involved in between. Thus, by selling the coffee directly to the consumers, they can get
the feedback for the improvements in the services directly from the customers on the spot.
Online:
This feature will be added to the blueprint of operations gradually as this can help to improve the
wide access and reach of the customers. Coffee overs from far off locations can enjoy the taste of
Caramel Coffee Bar and they can get it at home along with the delicacies of snacks to fulfill their
appetite.
The Budget
The Caramel Coffee Bar will do capitalization over the high demand for strong quality of
gourmet flavored coffee. The owners of the company have provided a sufficient capital for
startup. A management to operate successfully requires growing and establishment of a loyal and
trustworthy base of customers because of which the corporation wants to see the net worth
getting doubled in next two years.
Marketing Budget for Expense
Marketing Budget for
Expense 2016 ($) 2017 ($) 2018 ($)
Strategic relationships 1999 1199 1199
Advertising 4799 2399 2399

Other 2399 1199 1199
Total Marketing And sales
Expenses 9199 4799 4799
Sales Percentage 5.20% 1.70% 0.90%
Estimated Balance Sheet
Estimated Balance Sheet
1st Year ($) 2nd Year ($) 3rd year ($)
Assets
Current Assets
Cash 195357 296357 417647
Stock 21176 23293 25623
Other assets 0 0 0
Total Assets(Current) 216533 319650 443270
Long Term Assets
Long term Assets 59169 61169 63169
Consolidated Depreciation 5401 10901 1601
Total Assets(Long Term) 53,778 50278 46778
Total Assets(Current + Long term) 270303 3699920 490040

Capital And Liabilities
Current Liabilities
Acc. Payable 31975 31948 34837
Borrowings 6699 3398 99
Other Liabilities 0 0 0
Total Liabilities(Current) 38674 35346 34936
Long term Liabilities 19999 16416 12455
Total Long term liabilities 58673 51762 47391
Paid In Capital 140000 140000 140000
Earnings(Retained) -27679 -71627 -179158
anings 99307 106529 124490
Total Capital 211628 318158 442649
Total Capital And Liabilities 270303 3699920 490040
Investment
This Company’s funding comes from two key sources: Bank Loans and Investment of owners.
The major contributors of investment are the main owners of this company, Raymond and Porter
who have invested $75,000 and $25000 respectively. All the other investors contributed
approximately $40,000, which makes the aggregate investment of $140,000. The rest of the cost

which is required for the expenses of startup and the assets had come from two loans from the
bank, which are secured in the form via Bank of America.
Return
Forecast of Sales
Sales Forecast 2016 ($) 2017 ($) 2018 ($)
Sales
Food 69907 179029 194936
Drinks 105922 271253 296875
Total Sales 175829 450282 492811
Direct Sales Cost
Foods 29360 75191 82294
Drinks 26481 67815 74218
Total Direct Sales Cost 558842 143005 156512
Other Resources
Company Facilities and Location
Caramel Coffee bar will be established on the first floor of the Commercial land at the end of the
Patterson road. It has secured a lease of one year for the premises of 2100 square feet that was
earlier occupied by a salon. This renewal contract will get renewed automatically in next years at
a constant rate. This blueprint of the floor plan include back office of 190 square feet, coffee bar
of 2100 square feet which will include area for seating comprising a kitchen, two bathrooms,
storage area and 20 tables. Caramel Coffee Shop’s clean and open design for interior fashion