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A STUDY ON: & Global Marketing Project on FLOCAFE

Prepared By: Ashik.B.V (Reg no: C047BB2942AG0AB)

GREAT EASTERN MANAGEMENT SCHOOL, BANGALORE

CERTIFICATE This is to certify that the present study on Creative MediaPulse Technologies & Global Marketing Project on FLOCAFE has been carried out by Ashik B.V., Batch 2011-2012, under my direct supervision. I am glad to forward this for the partial fulfillment for MBA.

Project guide: Prof Giridharan Great Eastern Management School

Table of Contents 1. Acknowledgement

2. Executive Summary for Creative MediaPulse Technologies Pvt.


Ltd. 3. SWOT Analysis of Australian Market 4. Entry Mode Strategy 5. Market Growth

6. Service Business Analysis


7. Target Audience 8. Marketing Mix Strategies and Implementation

9.

Control Structure

10. Contingency Plan


11. 12. Conclusion Reference

Acknowledgement

I would like to heart fully acknowledge my gratitude and thanks to all the panelists who took active part in accomplishing my project. At the very outset, I wish to thank Prof. Giridharan, who helped me to choose such an interesting topic to work upon as a full fledged project and guiding me at each step interacting with him gave me a completely different view to look at a subject, throughout its completion. I am also thankful to all the faculty of my institute, who helped me in giving all the required information in a very cooperative manner. The project would not have been possible without the help of my friends and colleagues who have been patient enough with me.

Executive Summary for Creative Media Pulse Technologies Pvt. Ltd

Creative MediaPulse Technologies Pvt. Ltd (CMPT) is a media production company pioneering in providing innovative, rich and highly effective communication solutions to meet the marketing needs of our clients. Our solutions have succeeded in drawing attention of some of the well acclaimed national and international companies. CMPT is a new age creative communications and advertising company based in London and Bangalore, specializing in Multimedia and technology solutions like interactive presentations, video presentations, corporate presentations, corporate presentations, marketing presentations, flash presentations, 2D and 3D animations, 3D modeling,3D walkthroughs , e -learning, internet solutions like website design, website development, application development, web hosting, web promotion, web streaming, Multi language websites, print solutions like corporate identity, Branding, postures, and broadcast solutions like TV commercials, Radio jingles and more. CMPT is a company that believes in providing solutions that offers the client maximum benefits. We put our maximum effort to learn meticulously about the existing scenario of the client who approaches us to provide the suitable and most competitive solutions. Clear analysis and understanding of our clients vision, set goals, objectives, potential and preset paths to achieve

targets are some of the elementary tools that we, at CMPT, employ to comprehend the actual and hidden needs of our clients. Armed with an immensely qualified and creative team, an invaluable and diverse experience and the latest technologies, we offer the industrys broadest and most comprehensive range of solutions. Using a dynamic blend of proven business strategy, creative rich media assets and innovative technologies in our solutions, we help our clients steer into new avenues of visibility and growth. At CMPT, we put special attention on the balance between technical side and artistic side of the solutions provided. With the help of highly professional team CMPT has been able to create niche for itself in the field of multi media solutions, web development and e commerce solutions. With an exceptional focus on innovative and high quality standard solutions, we can confront all the pressing issues involved in our range of services. With the backbone of new media and emerging technologies CMPT helps its clients to deliver message directly to the target audience quickly and efficiently. Our enormous experience in this field has only helped us in understanding the finer aspects that make or mark a lasting impression on our clients customers. With quality par excellence as our benchmark we practice and advocate technology appropriateness and maintain a client- centric philosophy that is focused on maximizing returns by offering communication solutions that have a powerful impact on the target audience. Since Creative MediaPulse Technologies provides services only in UK and India, top management and Chief Global marketing planner and Manager has decided strategically to enter Australian market by providing creative solutions like advertising services, multimedia services, animation services, Internet solutions and print solutions.

SWOT Analysis of Australia Market Strengths Market Needs: The need for communication solutions has existed for several years. Small businesses and start-up businesses alike are migrating onto the Web at an astonishing rate and making their online presence a higher priority than in earlier years. We have noticed an enormous hole however in the small business services that are currently available. Without a doubt, there is a need for custom, high-end, dynamic services designed exclusively for small businesses. At this point, the majority of our competitors are offering services tailored around big business, to small business owners, or they are offering the exact opposite, one-dimensional, "cookie cutter" type services. While every small or big business has now recognized the need for having a presence on the Internet, many do not know where to start, how much it will cost, or even how it will benefit their company. It has been our experience by talking to small business owners that the decision to take advantage of the Web is not a matter of 'if' but a matter of 'when.' Ignorance of animation services: Every Australian Web Development Company provides Web Design Solutions and internet solutions but none of these companies have expertise in animation services. CMPT has been developing animations for various needs such as for films, television, simulations special effects and many more. CMPT matches the standards of some of the top animation production companies across the globe. So this could be one of our biggest strengths. Weakness Political Reasons: The Australian and Indian political relations have worked well together for many years. Of late the relations between the two countries were jolted, with attacks on Indian Community students in Melbourne, Australia. Indian Government lodged strong protests with the Australian Government. So this could be one of the biggest weaknesses for CMPT to start communication services. Trust Factor: Due to disturbance in political relations between the two countries it would be difficult for Australians to trust our services and accept our brand. Opportunities Market Trend: An important market trend right now is the one toward aggressive online and website marketing. Although many small businesses

are still waiting to gain an Internet presence, those who already have are beginning to look for more options along the lines of improving their existing efforts. We believe that in the upcoming years, small companies especially, will start to look for more ways to increase the traffic to their websites. Merger of business operations with Internet and WWW: Just as the majority of large companies have already started to use the Web to handle interoffice tasks, we believe that many smaller companies will begin to realize the time and money saving advantages to this strategy.

Threats Takes time: The biggest challenge may be whether you can get in fast enough to take advantage of the opportunities. One of the tough things about international business is that it takes time -- time to develop the kind of relationships you need to make sure you're working with the right partners abroad, time to get your product through the testing and certification requirements that may exist abroad, time to get your branding and marketing approach adapted to the different cultural sensitivities of a foreign market, time to get your people trained in export documentation and logistics. Competitors: Main threat to us are the competitors in Australia like Broadway InfoTech and DW Design who are in this industry from 8-10 years and have positioned themselves very well. A brief overview of competitors is discussed below.

1. Broadway InfoTech - Located in New South Wales, offers website


design and web development and e-commerce services.

Strengths: They are specialists in customized web services that meet Web 2.0 standards and accommodate scopes for futuristic support. Online marketing with latest market trends make them one of the best internet marketing solution companies. Weakness: Ashwani Kumar has served Broadway InfoTech as major partner since it inception. But he is also the only employee working for the company out of his home, and does not run his business as a full-time operation. In addition, Broadway InfoTech requires all clients who operate an ecommerce website to pay his company a commission on the

revenue generated by the site; this is paid on top of the development fee that company charges.

2. DWDesign
Strengths: Over the years, DW Design has established itself as a web company which provides high level web solutions for corporate clients and individual business owners. Sharp Innovations has reaped them large market share in its area. Weakness: DW Design is a young company with very high overhead. They market themselves as "The Small Business Internet Marketing Professionals of Australia," but the types of services they offer and their very high prices do not in anyway reflect the needs of small business owners. It is also our opinion, after reviewing DW Designs portfolio that they lack a certain level of technical and aesthetic design knowledge that so many small businesses are beginning to demand.

Entry Mode Strategy To enter Foreign Markets, we decided the strategy of Foreign Branching. Foreign market entry mode is influenced by three factors, namely, the ownership advantages of a firm, the location advantages of a market, and the firms internalization advantages. With a foreign branch we will have a higher degree of control in the ownership which is extremely important for any firm to succeed. Australia, as a location is the biggest advantage to us since it has exceptional unification of different cultures. Australia is a country of multiple cultures with a broadminded liberal and comprehensive society and audience is receptive to innovations and new ideas which is ideal for a business like ours. The internalization advantage refers to the benefits generated as a result of reducing transaction costs by replacing the market mechanism with an internal hierarchy. Foreign Branching will be suitable for us since our services are unique and joint venturing with competitors cannot be the option as our quality does not match with any of the competitors. CMPT will be a separately located strategic business unit, directly responsible for fulfilling the operational duties assigned by corporate management, including sales, customer service and delivery of internet solutions. When we open our branch in Australia, we will have some local managers in middle and upper level positions who will know clearly about the customers preferences and their bargaining power. We want to be in complete touch with the local population to match their needs as we are thinking of long term strategy to expand in different countries as well. By understanding the real need of our clients, perform search and research, evolve the right blend of tools; technology and medium develop impressive and effective solutions. Thus our company will enjoy a comparative advantage in the industry will offer more competitive products and services, and will therefore be more competitive in international markets. Target market CMPT has been serving various Industries over the years with its effective and creative solutions helping them to create a lasting impression on their clients, which can have a tremendous influence on their decision making. Industries that can be benefited from our creative solutions include:

Software Solutions offered: Corporate presentation, Product demos, Marketing Presentations, Presentations for exhibitions, Success stories, CBTs, WBTs, Campus walkthrough presentations, motivational presentations, web promotions etc. Engineering Solutions offered: Corporate presentation, Product demos, Marketing Presentations, Presentations for exhibitions, Success stories, CBTs, WBTs, Campus walkthrough presentations, motivational presentations, web promotions etc. BPO Solutions offered: Corporate presentation, Product demos, Marketing Presentations, Presentations for exhibitions, Success stories, CBTs, WBTs, Campus walkthrough presentations, motivational presentations, web promotions etc. Education Solutions offered: Corporate presentation, Product demos, Marketing Presentations, Presentations for exhibitions, Success stories, CBTs, WBTs, Campus walkthrough presentations, motivational presentations, Posters, Brochures, web promotions etc. Entertainment Solutions offered: High quality Video Shooting, 2D and 3D animations, Special effects, voiceovers, websites, brochures, posters etc.

Builders and promoters Solutions offered: Corporate presentation, Presentations for exhibitions, walkthrough presentations, curtain Raisers, Posters, Brochures, websites etc. Pharma Solutions offered: Corporate presentation, Product demos, Marketing Presentations, Presentations for exhibitions, Success stories, CBTs, WBTs, Campus walkthrough presentations, motivational presentations, Posters, Brochures, web promotions etc. Agriculture

Solutions offered: Corporate presentation, Product demos, Marketing Presentations, Presentations for exhibitions, Success stories, CBTs, WBTs, Campus walkthrough presentations, motivational presentations, Posters, Brochures, web promotions etc.

Positioning Strategies Creative, reliable and affordable this is how we would position our company. Our ability to provide most creative ideas, concepts and branding has exceeded clients expectations and helped us compete globally. Our team is the source of knowledge, idea and strategies. We give the best Value for money. Search Engine Positioning A basic web positioning strategy is a comprehensive search marketing program that utilizes both Search Engine Positioning and Search Engine Marketing to gain the comparable advantages of both to drive new customers to our web site. One of the primary ways in which people find web sites is through search engines. If a Web site can be easily found by the search engines, the amount of qualified traffic it receives will greatly increase, thereby maximizing sales and other business opportunities. Just like advertising agencies, PR firms and professional marketing firms, you should only trust the experienced industry experts with your search engine positioning. The SEO person/firm you hire should act as your "Web Marketing Partner" and they should be available and accountable. The developed online marketing and positioning strategy should complement the overall marketing focus of the company.

Marketing Mix Strategies and implementation Product Strategies CMPT has been serving clients over the years, with its effective and creative services, having a lasting impression on its clients, which have had tremendous influence on the decision makings of the company. The services offered by CMPT include Multimedia Services, Animation Services, Internet Solutions, Print Solutions, Broadcast Solutions. CMPTs Multimedia services include: Corporate Presentation Interactive Presentations Marketing Presentations Marketing Collateral Kits Product Demo CBTs and WBTs Product Walkthrough CD-ROM Publishing Documentaries Content Localization Event Archrivals Professional Voice-over Professional Video Shooting Compiling the power of technology with creativity and innovation, CMPT has excelled in designing user-friendly and interactive multimedia solutions that fulfills your business requirements. CMPT offers cost effective solutions that are technically perfect and aesthetically charming. With the booming of gaming and other entertainment industries the key player in the communication segment is Multimedia, Integrated IT, Communication and Media, Multimedia makes communications interactive, immersive and powerful resulting in Better Communications.

CMPTs Animation services include: 2D Animation Cell Animation Cartoon Animation 3D Modeling 3D Animation 3D Simulations 3D Architectural Walkthroughs Flash Animation Logo Animation Special Effects Short Films Virtual Reality Curtain Raisers 360 Degree Panoramas CMPT has been developing animations for various needs such as for films, television, Simulations, Special effects and many more. We assure you that we can deliver animations that match to the standards of some of the top animation production companies across the globe. CMPTs Internet Solutions include: Website design and development Multi-language Websites Dynamic Websites Web Applications Portal Designing Flash Intros Web Hosting SEO and Web Promotion Website Maintenance

E-learning E-Commerce Streaming Video CMPT has a pool of highly talented personnel who have mastered the art and science of internet solutions. With the right blend of technology, creativity and innovation, CMPT designs user-friendly, cost effective, and result oriented internet solutions that fulfill your business requirements

CMPTs Print Solutions include: Corporate Identity Brochures/ Folders Posters and Banners Letterheads, Envelopes and Business Cards Package Designing Fliers and Pamphlets Designing of CD Label/Jacket/Case Print is one of the age-ole mediums for communication. CMPT understands the importance of the print solutions and has designed comprehensive print solutions to meet the needs of the industry. We assure you that these solutions will help in creating a unique identity and impression on the target audience. CMPTs Broadcast Solutions include: Development of TV Commercials Beta Quality Video Shooting Video Editing and Titling Development of Radio Commercials Development of Jingles Airtime on TV Channels Airtime on Radio channels CMPT understands the mindset of the TV audience and designs solutions that bring more and more returns on investment. We assure

you that these solutions will help in creating instant impact and long lasting influence on the target audience.

Pricing Strategies For most business owners, cost, both residual and one-time are huge influences on the decisions they make regarding everyday operations of their company. Even though we offer 100% customized services and our pricing is based on an hourly fee, to make it easier and less confusing for the clients. Since our services are offered on a large scale of variety and each service requires a distinguished pooling of talent and expertise, we have different slabs of prices which will be given to the client on request.

Promotion Strategies Our target client is part of a very specific demographic, for this reason, we market and promote our services in a direct and specifically targeted manner. Print Ads:

Currently we advertise in eight separate area yellow page directories. All our ads appear under either the Internet Services or Website Design headings. CMPT also has an ad listing in a national business directory under the heading of Web Developers.

In the near future we will feature ads in several area business publications. Direct Mail and Fax: We have sent out targeted bulk mail flyers promoting special offerings by our company. We have participated in targeted broadcast fax promotions to small businesses in our area. In the near future we will begin a new aggressive, ongoing bulk mail campaign to promote our Web development and hosting services. Mass Media Ads:

We will begin advertising on a broader scale within the next six months. Radio spots will be continuously played during local area talk shows and news programs, this placement is intended to reach the highest percentage of our target client possible. Billboard ad placement will be the second mass media marketing campaign we will implement into our marketing efforts. Billboard ads will be intended as 'name recognition' advertising. Educational Seminars:

CMPT has been invited to speak to business owners and managers at several Internet and Web-related educational seminars on a variety of topic. In the near future, we will promote our services through these seminars.

Local Area Commerce Groups: To promote our services and our name as a participant in the Web services industry, we will be joining many of the local area Chamber of Commerce groups and various other strategic partnership clubs.

Control Structure To monitor the success and the hardships of the organization, we have a control structure and a talented team to face any challenges put forward by the clients. Experience Rich Crew: The true strength of CMPT lies in its strong, talented and experience rich team. People power is the main reason for the unparalleled achievements of the company. Our Caring team of experts, which worships the god in details, assumes any challenge that the client brings to our table and emerges out with the profitable solution that invariably convinces the client of its potential to succeed in the face of tough competition. Versatility & Expertise: Versatility & Expertise are the value of our team assures to a client. With the rich and in depth experience, the dynamic team of CMPT has been serving different verticals with world class solutions. CMPT has in its crew highly talented and experienced creative directors, scriptwriters, 2D/3D Animators, SEO Specialists, programmers, Video production Crew, etc, who beautifully blends their expertise complementing to a complete cohesive team. Our team is aware of the advancing global technologies and adopts them to the advantages of the clients. The team is highly creative and good in visualizing the image and impact that the product will create to the target audience. Our team comprises of

Creative Directors Intelligent writers Artists Software Engineers Animators Audio Engineers Programmers Designers Outdoor shooting crew.

Contingency Plan If things dont go according to our plan, CMPT has the ability to change strategies quickly by revamping the creative team and administration and pool in new talent who know the Australian population very well and has the ability to compete even more. If things fail due to price structure, then we shall change our pricing strategy according to the tastes of the clients, by still keeping our profit margins and not compromising on quality. We shall do extensive advertising to promote our business and hire even more rich professionals to attract our target audience. But the plan that we have laid out is for 3 to 5 years. We will have to wait in the initial years to taste success and wait for the breakeven point. And then do the required changes to stay in the business. Our vision is very clear to ensure our creative services all over the globe, helping every company to reap the benefits of this effective communication in addressing the challenges of this 21st century.

Conclusion Creative MediaPulse Technologies is built on transparency, understanding, survey, recommending solutions, deliver high quality solutions and respect clients feedback and suggestion. Establishing our new office in Australia is our biggest challenge and opportunity, and we are sure that our talented team of professionals will go out of their way to achieve the target and help the company grow in leaps and bounds.

Global Marketing Project on FLOCAFE

Table of Contents

1. 2. 3.

INTRODUCTION MARKETING RESEARCH SITUATION ANALYSIS 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Internal Analysis The Product Life Cycle External Analysis Porters Power Forces Target Market Market Demographics Market Needs Market Trends S.W.O.T. Analysis

4. 5.

OBJECTIVES FLOCAF MARKETING STRATEGIES 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Boston Consulting Group Matrix Ansoffs Product/Market Expansion Grid Generic Strategies Segmenting Targeting Positioning Branding Adaptation Vs Standardization

6.

FLOCAFE MARKETING TACTICS

MARKETING MIX 6.1 6.2 6.3 6.4 6.5 6.6 6.7 7. 8. 9. Product Price Place Promotion People Physical evidence Process Management

ACTION CONTROL CONCLUSION

1.

INTRODUCTION

Flocafe is a Greek coffee shop chain and the largest within Greece established in 1994. It offers high quality coffees through their sophisticated and well organized shops. It started operations in Cyprus 5 years ago with their first shop in Nicosia at Stasicratus Street another in Ledras and Limassol at the Sea Front. It is not just a place to drink coffee but they offer a place where a customer can go away from reality and express their feelings.

2.

MARKETING RESEARCH

Primary data are collected from a questionnaire using closed ended questions. Data analysis methods used include frequency distributions, factor analysis and regression analysis. (Drousiotis A and Austin J, 2007) The qualitative approach to research is not concerned with this sort of statistical analysis. It involves gathering a great deal of information about a small number of people or organizations. The information collected is generally not presentable in numerical form. It is based on the belief that a full and rounded understanding of the organizational experiences and situations of a few individuals however unrepresentative they may be, is of more value than a limited understanding of large, representative group. The methods used to gather qualitative information include observation, informal and in-depth interviewing and participant observation. (Ticehurst and Veal, 2000, p. 21) In our research we decided it would be more appropriate to use qualitative data as the source of primary data. For this purpose we have conducted interview with Mr. Andreas Savva the manager of Flo caf in Ledras street and Mr. George Papademetriou the operations supervisor again from Flocaf in Ledras street. The purpose of these interviews was to gain access to the current marketing practices of the company in order to be able to evaluate it and propose changes or additions to their current marketing strategy and tactics as well as goals and objectives. In addition we used secondary data such as theory on marketing in order to give the reader a better understanding on our comments as well as material from Flo caf website and other information given by the manager of Flo caf.

3.

SITUATION ANALYSIS

3.1

Internal Analysis

Flocafe has already built a good brand name. This is due to the fact that together with the quality coffees offered the also serve a philosophy. Philosophy explained by explanation of their logo, the spiral. Flocafe (2007) claims that the spiral serves as the Flocaf symbol and it is depicted in our logo and our brand .It is also a communication code, which represents values, messages and symbolisms that also reflect our brand. The spiral is an ancient symbol. It can be found in nature, in life, in our being, in our worlds laws, in our identity. It stands for centre, focus, time passing from season to season, from day to night and to day again. Extroversion, Sociability, Ritual .The spiral is a dynamic and genuine symbol. It is the identity of a new Flocaf era. People associate with this philosophy because it reflects their needs. This leads Flo to have many repeating customers. Repeating customers create a steady sales volume that guarantees profitability. The market Share when it comes to this kind of businesses is not a clearly definable variable. Customers tend to visit various cafs depending on their mood.

3.2

The Product Life Cycle

A lot might say that Flocaf is at its maturity but in Cyprus there is still a lot of room for growth. So we should say that its at its growth stage. Up to now there are only three shops in Cyprus only in two cities. Some more shops could be opened in cities like Larnaka or Paphos. The product offered by Flo is high quality espresso based coffees like the traditional espresso Cappuccino Freddo Caldos, filter coffees and classic instant coffees like warm instant coffee and frappe. When it comes to their products they always give emphasis on high quality. The Prices of the coffees at Flocafe could be considered high, higher than the average coffee price in the market. This is because they offer a lot more services than other cafs. The shops of Flocaf are all in very convenient areas were they are easily accessible to people. As you go insight you can see a very well organized caf nicely painted giving a cosy feeling. The Flocaf stuff is always trained to give the best service possible. Flocafe gives a lot of emphasis on this area as it really cares about having happy customers and customers are always happy when they are served well. This goes together with the whole process of providing there service. By the time a customer walks in the shop the supervisor of the shop will lead him/her to his table, the waiter will come to give the menus brings water and wait for the order. The drinks are prepared with quality coffee to add to an enjoyable experience.

The way they choose to give some physical evidence about the quality of their coffees is by putting pictures of their coffees in the menus. In many cases the customer will choose a coffee by its picture. According to the manager of Flo Caf in Ledras street, the company does not have any significant promotional tool available except from some events and occasional competitions (i.e. with Mini Cooper). products. 3.3 External Analysis In addition the company rarely uses radio advertisements to communicate new

Flocafe seems to know the market very well. They know the common prices in the market and how their main competitors charge their coffees. There competitors are not each and every caf but the cafes that offer quality espresso coffees in a nice, well organized environment. A key point is the communication with the customers. They dont just communicate that they have good coffees but they also communicate that they have a nice place to have your coffee with great service and a beautiful environment. 3.4 Porters Power Forces

As Mind Tools Ltd [1995-2008] claims the Porters 5 Forces tool is a simple but powerful tool

for understanding where power lies in a business situation. This is useful, because it helps you

understand both the strength of your current competitive position, and the strength of a position youre looking to move into. Supplier Power: In our case the main supplier of Flo caf is the franchisor as it provides all the products and Lavazza coffee beans and as a result it has great power over the Flocafe franchisee. However, this dependability is in the context of the franchise and the franchisee in order to eliminate intermediaries has formed a company, Lani Restaurants, in order to import all the required material. In the case of the Cypriot suppliers, as the caf is a franchise and has significant market share, as a result Flocafe has bargaining power over the local suppliers. Buyer Power: The power of the buyers is minor in a case of a caf. A caf has for customers many and unknown people and those customers dont just visit one caf but a lot. So the cost of the coffee is not really defined by the customers.

Competitive Rivalry: The number of coffee shops is large in the island but the immediate competitors are not each and every coffee shop that sells cheap or expensive coffees. The competitors of Flocafe are classified in three categories

a) The cafeterias that sell high quality coffee and offer quality service and have the fame of
a highly prestigious and upper social class customers (i.e. Pascucci Haagen Dazs in Limassol, Pralina Le Caf in Nicosia .

b) The cafeterias that are located in more popular locations such as Mondo and La Mode in
Makariou which the company considers to be inferior but have large share because of their location rather than the quality of service and products

c) The cafeterias that offer self service such as Starbucks and Costa which are quality
cafeterias but have different philosophy and different organizational culture Each category has relevant attributes that the management of Flo caf considers to be important and has affect on the performance. However, the main competitors are considered those of the first category where the company wants to be established. Threat of Substitution: Substitutes in this market are a lot. Any coffee shop and each and every place that sells coffee even a coffee prepared at home could be considered a substitute. This is a threat when it comes to the product offered but Flocaf does not just rely on the product but also relies on the service. The service offered is not easily found in cafes. This gives a good advantage towards many cafes.

Threat of New Entry: New entry in the caf market is very easy. The problem that they face though is the ability to remain in the market. The whole point is not just to open a coffee shop but offer something that not many offer and if possible something unique. What Flocaf managed to do until now is show to people that is different. It is not something simple thats why it has survived. 3.5 Target Market

The main target market is people from 18 to 35 that require a place to have their coffee, relax and enjoy a beautiful service.

Total Population

The rest 20% 18-35 The rest 18-35 80%

Table 1

3.6

Market Demographics

Geographics

The immediate geographical targeted population is estimated at 400,000. This covers total population of Nicosia and Limassol. The targeted population is estimated at around 100,000. Demographics Our target group is males and females, aged from 18 to 35, single or committed, educated, who go out for a drink around 1 to 3 times a week Behavioral Factors Cypriot cafeteria customers tend to have the habit of enjoying their coffee on the place of its creation. They view it as the ideal way to socialize and to be in places that appeals to their social class or communicate with the class they want to be part of.

3.7

Market Needs

Flocafe (2007) claims that one of the things that make Flocaf so special is that it gives guests the chance to create their very own Flocaf experience. They can enjoy this experience during their spare time, not only through the relaxed, carefree and stylish Flocaf ambience, but also through the lively and upbeat entertainment, made up by the music, the colors, the action and the Flocaf staff with their service. An amazing mixture of coffee and chocolate aromas, a sumptuous feast of tastes, fills us with energy, bringing to life all sorts of different moods at the same time. Its in every Flocaf that our guests create new and enjoy old friendships, turning their everyday getaway from routine and the quick city rhythm into an environment that suits ideally their taste! What the customers need it to be in a nice environment with great service. This environment is developed with the organized way the cafs look their colors and the chill-out music they play. The service provides by Flocaf stuff is much better that any good caf and also the fact that it is not self service gives people what they want. The prices at Flocafe might be a bit higher than average but they have not much of a difference than prices at cafs like Pralina, Le Caf and other competitors. So people will not discard it because of the price.

3.8

Market Trends

The market trend is heading towards some more sophisticated and posh customers looking for higher quality places to go that will benefit their image. Coffee quality is something Cypriots look for. According to the manage of Flo caf in Ledras street, Instant coffee became very famous in Cyprus but nowadays they tend to turn around to espresso based coffees. Cafes like Starbucks, Gloria Jeans and Costa that recently started operating in our island have shown to the people that there is a very nice alternative to instant coffee (frappe) and people started to ask for these kinds of coffees. But all of these cafes are self service, a trend in their home countries. Cypriots tend to prefer to have someone to serve them and this is what Flo does. 3.9 S.W.O.T. Analysis

Out of the interview with the Manager of Flo caf in Ledras street, we extracted the following Strengths Weaknesses of the company itself and Opportunities and Threats in the Cypriot Market that Concern Flocaf. Strengths One of the main strengths of Flocaf is the whole idea behind their philosophy. They dont just offer to the people a place to have their coffee but they offer the place to relax feel well and spend a great time. This environment has built a relationship with the customers that have become loyal. The shops are located in key point areas so they can attract customers. The stuff goes through a good training that makes them able to offer the high quality service promised by Flocafe. The products offered are of a large variety giving the chance to the customers to select anything they like. This catalogue is updated constantly with new tastes different for each season. The franchisee has high economic strength and thus Flo caf has economic feasibility and funds to grow and expand and in addition invest in advertising. An effective distribution network is built by the franchisee with the creation of a company that imports all materials needed and distributes them to the shops as fast as possible. Weaknesses

The fact that 2 of the shops are located in busy roads makes it difficult for people to find place to park. This leads them sometimes to go at some other cafes with more parking spaces available near by. The prices even if they are reasonable for the service offered still they are high leading people to visit similar cafes with lower prices. There are also weaknesses based separately for each Flo caf outlet. For example, in Stasicratus street according to the manager, the design and the absence of a large frontal porch that is preferred by customers of the given class (or class wannabe) in order to view and be viewed. Moreover the caf was initially based on the Greek model and it is not suitable to the culture nor the preferences of the social class that is located in this area and the equipment and atmosphere in general gives the feeling of a more middle and lower class cafeteria which is not the appropriate for the area Opportunities Flocafe is found only in two cities of Cyprus. There is a very good possibility of success in opening shops in other cities like Larnaka and Paphos where the target group of Flocaf is large. In the case of Flo caf in Ledras street, a change in the political environment now provides a new opportunity for growth and increased sales. With the change in the Cypriot Government, the road block that separated the Turkish occupied area with the area controlled by the Cyprus Government has opened thus creating increase in the visitors of the historic street and thus more potential customers both Greek-Cypriots and Turkish-Cypriots as well as more tourists. Competitors such as Starbucks and Costa have contributed to the change in the habits of Cypriots constantly shifting from instant coffee to espresso. This is in favor of Flo as well since it provides both instant and espresso coffees and in addition more differentiated products based on espresso. Threats The main competition is already established and has a very positive image which would be very difficult to overcome. Secondly, the case of Flo cafeterias in Greece has a negative appeal to the image the franchisee wants to create since in Greece are considered more middle class cafeterias.

Finally another threat is the constant threat of new entrants and since customers always give a trial period to new cafeterias in the case of the entrance of a new of internationally known brand would hurt the companys efforts to achieve leadership and excellence. 4. OBJECTIVES

According to the Manager of Flo Ledras, the management of Flo caf has set the main goal to be the establishment of the Flo chain of cafs among the leader in market share and the determinant force of the coffee fashion and being able to adapt rapidly to the changing environment In order to achieve this goal, several objectives were placed: Firstly to create aesthetically upgraded cafeterias with a very pleasant modern and warm environment through the next 3 years Secondly, to continue to introduce new coffee creations that will constantly be ahead of the competition Thirdly, to monitor and constantly improve the service level and the quality control of the products and services by employing the best and maintain highly trained and committed employees. The training of supervisors must be completed until the end of 2008. Last but not least to be able to differentiate from competition by identifying the needs of the segment of 19-40 years old and adapting the service offered by the company Our goal is to introduce how the goals and objectives of the Company itself and examine critically the strategies and tactics that are currently implemented and propose changes based on the general marketing concept. We would suggest that another objective to be added which would be the creation of a new communication mix which would have appeal to the targeted segments and will contribute to the improvement of the Flo brand by the end of 2008. 5. 5.1 FLO CAF MARKETING STRATEGIES Boston Consulting Group Matrix

According to Kotler et al (2002) the Boston Consulting Group matrix approach is a classification of a companys strategic business units/products according to the growth/share matrix. In the case of Flo caf we are examining the business portfolio and specifically the coffee beverages. Since it is a bundle of similar but different products we will examine some in particular in order to be able to form our strategy. For example, the Flocaf frappe is a standard product identical to that of other competitors. As we describe in the situation analysis the instant coffee market is nowadays in decline, however frappe must be clarified as a cash cow since it is a product with standard sales and very low cost relatively to other products, thus contributing with a high margin to the profitability of the company. We would suggest that the company maintain this product at all cost since it is in its mature stage and has several loyal customers. On the other hand, the majorities of the new products are clarified as question marks since most of them are unique products and are depended on the good introduction and explanation of its ingredients by the waiters and supervisors in order to be sold. Other products such as cappuccino and espresso related products must be considered as Stars since they have a high margin of growing sales and the espresso and real coffee market in general is constantly growing in Cyprus and especially after the introduction of new competitors that sell only espresso coffee such as Starbucks, Costa and Gloria Jeans. However, it is important to point out that the above information are not absolute since all products are subject to seasonality with hot drinks sales decrease dramatically during summer period and cold drinks sales decreasing dramatically during winter period. Therefore we decide not to change the current strategy of the product portfolio nor propose changes concerning 5.2 Ansoffs Product/Market Expansion Grid

According to Ansoffs Product Market expansion grid, Flo caf is currently using a Product Development strategy where it constantly introduces new products for the existing markets. We agree to this strategy which is best related to the goals and objectives of the company and it best appeals to the way the cafeteria is formed. 5.3 Generic Strategies

According to this model introduced by Michael Porter, the company tries to obtain a competitive advantage over its competitors through a differentiation strategy. We agree to this strategy since it is best serving the objective of the company to compete with leading local cafeterias by

introducing different products, such as new coffee creations (flocachino, espresso caramel cal do etc) which is not available by competitors, to broader target. Thus the company is able to offer new services create another competitive advantage over its competitors. 5.4 Segmenting

According to Kotler et al (2002), Segmentation is the process of dividing the market into distinct group buyer segments with different needs wants etc who might require separate products. The four major market segmentation categories are: Geographical segments (nation, states, region or cities, Demographic segments (age, gender, family size, and income, Psychographic segments (social class, lifestyle or personality) and Behavioral segments (occasional, benefits user status etc). Flo Caf is currently using mainly the geographical segmentation since it is always located at popular public places and usually close to competitors. According to the manager of Flo caf in Ledras, the company is trying to focus on psychographic segments such as medium and higher social class. According to our opinion we would suggest that the caf consider other demographic segments as well such as families with children segment. 5.5 Targeting

According to Vrontis (2009), targeting is defined as evaluating each market segments attractiveness and selecting one or more segments to enter. According to the current practices of Flo caf, the company uses a Concentrated Targeting strategy where the company focuses on a number of segments but with one company marketing mix Based on what we mention above, Flo Caf is correctly focusing on Geographical segments since it is always trying to establish new service factories in popular public places which is a common practice in the caf industry. Moreover, to our opinion, the company is correctly trying to focus its marketing efforts in the medium and higher social class segments, since it is more appropriate to the style of the cafeteria itself. We believe that by competing on other psychological segments irrelevant to the corporate culture would not be beneficial since Cyprus has a large medium social class which makes this psychographic segment more relevant even to the number of the Flo caf chain. However, we suggest altering its targeting strategy to a Differentiated Targeting strategy. Even on the current targeted segments we see that each different Flo caf factory could alter slightly its service offering in order to appeal best to the targeted segments that surround it. It is a fact that in Flo in Ledras Street, a higher number of tourists as well as families with children is present than

in Stasicratus street. So we would suggest that the company modifies slightly tactics (basically its additional services) to serve the segments that are closely related to the geographical area. 5.6 Positioning

Positioning is a marketing strategy where a company decides the way it will address to the markets it has targeted. A company may differentiate its products in a way that the strengths of the company are better developed so that the needs and wants of the target market are satisfied (Kotler et al, 2002). As we mentioned previously, Flo Caf in Cyprus is targeting the middle-higher social class customer segment. Therefore the positioning of the company should be relevant to this. The company aims to position the Flo caf line among its competitors, (Le caf and Pralina in Nicosia) that is, among the best and more prestigious cafeterias in Cyprus. We created a perceptual map (Appendix) in order to illustrate the positioning of the company in the Nicosia Geographical segment among main competitors and other competitors. In the case of Cyprus we identified that the Flo caf chain has been the subject of repositioning, where the caf changed its positioning in relation with the positioning of most Flo cafs in Greece. We totally agree to this strategy since as we mentioned previously the Cypriot populations average income is higher from Greece and there are some differences in culture. Therefore the adaptation on this field can be considered successful 5.7 Branding

Branding is a very important part of the current Marketing strategies of Flo caf. Firstly, the name of the caf meets the requirements of an appropriate brand name. It is distinctive; it is easy to pronounce recognize and remember. Moreover it does not mean something bad in the Greek language nor English. The branding of products and especially coffee products which we are interested in are baptized with a new name (for example Flocachino, Biscolato etc) in order to connect the product to the firm in the perception of consumer. Thus the Flo brand name and the related new product brands is a very good weapon against competitors since the attributes and benefits of the products are immediately directed to the brand image thus creating more value and quality to the service, more loyalty and credibility by the customers and most importantly, it is the identification of the caf.

We find this strategy innovative in relation to the common coffee shop practices and very successful. The franchise has put much effort and money to build the Flo brand name. This brand name was rather known to Cypriot public because of the intense presence of Flo chain of cafs in Greece since there are thousands of students studying in Greece and because Greece has the majority of Cypriot tourists every year. However, according to the Manager of Flo Ledras, Flo cafes in Greece have a number of differences and the most important is that it targets different segments of the population rather than of those that targets in Cyprus. So the effort of building an image was a difficult goal which they consider achieved.

5.8

Adaptation Vs Standardization

In general, as a franchise, Flo Caf has highly standardized operations and behavioral patterns. We consider this quite important for the uniformity of the quality and performance. However, we suggest applying flexibility for adaptation in some areas such as the design of the service factory, the dress code of the employees and the additional services of each outlet. This is to ensure that each outlet is appealing to its target segment and the publics of the location.

6. FLOCAFE MARKETING TACTICS MARKETING MIX According to Kotler et al (2002), marketing mix is defined as the set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its product. The marketing mix is also known as the seven Ps: product, price, place, promotion, people, physical evidence, process management. 6.1 Product

According to the differentiation strategy that the company tries to obtain in order to compete with leading local cafeterias, Flocaf had introduced some new coffee creations (flocachino, espresso

caramel cal do etc) which are not available by competitors, in this way the company is able to offer new services creating another competitive advantage over its competitors. . The main input that the company uses in the production process is coffee. All the franchise outlets use the same Italian coffee, Lavazza. The coffee has to be stored according to strict specifications and grained at the correct moment in the production process in order to maintain its aroma and taste as genuine and fresh as possible. As far as the packaging of flocafs products we strongly believe that offer convenience especially in consuming and that they have their unique personality build loyalty with the customers and are easily recognizable than any other product of any competitor. The Flo brand name and the related new product brands is a very good weapon against competitors since the attributes and benefits of the products are immediately directed to the brand image thus creating more value and quality to the service, more loyalty and credibility by the customers and most importantly, it is the identification of the caf. The franchise has put much effort and money to build the Flo brand name. We Find this very successful and innovative and are leading towards the creating of a very strong brand name. 6.2 Price

As it is well known Good pricing decisions are critical to a firms success in the workplace and also that the only source of product for Flocaf is through the price charged for products. The price charged for the products in Flocaf Cyprus are a little bit higher than the price charged in Flocaf in Greece since the standard of living is a little different between the two countries and also consumers, especially in Cyprus, see price as a quality indicator and since Flocaf considers le caf and Pralina in Nicosia as the two most important competitors must place their price respectively to those two cafeterias. Although they set their prices a little lower than the two competitors in order to acquire a larger market share. 6.3 Place

Place means making the goods and services available where and when customers need and want them. Place is all the company activities that make the product available to target customers. Flo cafs marketing channels are directly from manufacturer to consumer, in other words all products are prepared in each |Flocafs shop and served directly to the customer. Flo caf is always trying to establish new service factories in popular public places which is a common practice in the caf industry. For example the establishment of two cafeterias in two of the most

popular streets in Nicosia, Ledras and Stasicratus .Flo caf, very correctly in our opinion, alter slightly its service offering in order to appeal best to the targeted segments that surround it. Like for example in Flocaf in Ledras street there are higher numbers of tourists and families present than Stasicratus street, that are mostly young people present, so we would suggest to the company to modify slightly mostly its additional services according to the characteristics of people that are present to each geographical area. 6.4 Promotion

When we say promotion we mean bringing products to the attention of consumers and persuading them to bye those products. We strongly recommend Above the line technique to be used by the company since this technique is using mass media to promote brands for example TV and radio advertising especially radio that is used in Greece by the company and happens to experience great success. If some advertising will take place in Cyprus as well especially in some popular radio stations that are heart by mostly young people together with some print advertising in magazines we believe that this will help the company to increase its market share. Also the development of good public relations, the development and maintenance of good relations with different publics, will help Flocaf to build up good brand name. Some of these publics include the customers, the government, the community even the competitors. Also something else that could possibly help the building of a good brand name for Flocaf is sponsorship, a form of enlightened self interest where a worthy activity is supported with cash or consideration in return for satisfying specific marketing or corporate objectives, that will enable Flocaf to be heart more often by the public by offering to society as well and this will have a very positive impact on the company. Moreover since the caf is targeting higher social class we would suggest creating collaboration with magazines that appeal to this segment and create certain events in each outlet with the presence of important persons, celebrities and other people that act as models of behavior especially among young adults which is the main target segment.

6.5

People

The people dimension has to do with the types and skills of the staff, their ability to get things done correctly and also, very important, how they interact with customers.

It is very important for an organization like Flocaf to have a well trained staff that will make the difference, if its possible, when customers compare Flocaf with its competitors. So it is our opinion that very often the staff should be trained, not only when there is a new product introduced, in order to keep the high level that everybody in the company aims for. The staff can be trained through seminars that the company will organize for their best interest. We strongly believe that a trained staff is a comparative advantage for a company to have that will force the customers to come back if they are satisfied from the treatment that they had, so management of Flocaf, confirmed to us by the manager of Flocafe Ledras, invest a lot for the proper training of their staff because they believe that people in their organization can make the difference. 6.6 Physical evidence

Physical evidence relates to the surrounding in which the other elements are delivered and the sorts of messages they send to the customers. For example in one of |Flocafs competitors, Pralina, they serve chocolate pieces to match with the drinks they serve and this idea seems to work very well. We suggest for Flocaf, having in mind that Flocaf Ledras attract young families with children, to introduce a small playing ground for children to keep themselves busy so their parents enjoy their drinks without worrying for their children. Of course Flocaf tries to keep the company in good position and they give a lot of effort in small details, for example they serve bottled water together with every drink, mostly coffee, and this we believe gives a great impression to the customers. Also in Flocaf one can enjoy soft music together with his drink since Flocaf offers music as well and also one can enjoy an important sport event from the big screens that are presents in the area of Flocaf Ledras and Stasicratus. Finally, we would suggest since the company has identified that the decoration and equipment of the caf in Stasicratus does not correspond to the demands of the psychographic segment of higher social class (or class wannabe) which is present at the location we would strongly recommend the alteration of the design is necessary in order to reconstruct the physical evidence of the caf in order to communicate the message that the caf seeks to be placed among the leading cafeterias of the island. 6.7 Process Management

Process management is mostly concerned with the ways in which customers are dealt with from the moment of initial contact right through to the sales follow-up and the after sales service. As

we mentioned before the company invests a lot in the training their staff because they know how important is to treat the customers in the proper way from the time they get in to the time they leave the place. In Flocaf they try to be as polite as possible with everybody that enters the cafeteria and after serving the waiters try to be close to the customers by visiting their table often and also changing their ashtray when needed, by asking them if they need anything else and generally by being close to all their customers. When a customer decides to leave the cafeteria the manager that is in charge is obliged to thank the customer for the preference of the specific cafeteria and very politely leads him to the exit by saying goodbye to them. In general the whole process of production and serving the customer is highly standardized and based on the strict regulations imposed by the franchisor which includes models of behavior, dress code and most importantly, measurements of the proper quantities of raw materials in the production process which reassures the uniformity of the product and a constant quality control. We find this very important but we have some comments that derived through the interviews where problems arise with products that expire in the stock room thus creating risk of bad service and increased cost of destroyed stock. We recommend applying Just-in-Time inventory management strategy for stock control, the quality of the raw materials will remain high and will avoid costs related with obsolete or destroyed stock and correspond to the objective to offer good quality service. 7. ACTION

Planning good strategies is only a start, towards successful marketing. A well designed strategy without a proper implementation is not valuable to an organization. Marketing implementation is the process that realizes marketing strategies and plans into actions to accomplish the strategic objectives (Vrontis 2004). Based on what we have seen we would propose to change first of all the decoration of Flo in Stasicratus which is the central and directly related to competition. Our suggestion would be a renovation of the service factory in order to improve the physical evidence of the outlet. We believe that a minimum number of 80,000 Euros must be invested for this goal. 8. CONTROL

Control is the process of measuring results, diagnosing the results and taking corrective actions if necessary. This allows to the organization to monitor and review the strategic marketing plan and direct possible methods of improvement and updating (Vrontis 2004).

Naturally, in order to achieve the goals set, correct monitoring is necessary. We believe that the top management must be in constant contact with middle management and lower management as well as employees in order to get constant feedback concerning the implementation of the strategies and tactics as well as to identify potential mistakes of the strategy. Moreover, the marketing department must constantly monitor the perceptions, needs, wants and demands of the targeted segments as well as to measure the effect of the strategies and tactics in order to be able to evaluate their effectiveness and efficiency an be able to form new strategies to improve mistakes and take advantage of new opportunities in the market. 9. CONCLUSION Flocafe has managed to create around its name a strong brand that made it a key player in the market. The fact that there are strong competitors exists and this is what is giving Flocafe a lot of room for improvement. The Cypriot market still allows improvement to cafs like Flocaf and people will not give second thought to change the caf they prefer. References Drousiotis A & Austin J, Job Satisfaction of managers in Cyprus, EuroMed Journal of Business Vol. 2 No. 2, 2007 pp. 208-222 [electronic] .Available from: Emerald Group Publishing Limited 1450-2194, Article DOI 10.1108/14502190710826068 [2007]. Kotler Philip, Armstrong Gary, Saunders John, Wong Veronica. (2002), Principles of Marketing, 3rd European Edition, Prentice Hall, UK Mind Tools Ltd, 1995-2008, [online] Available from http://www.mindtools.com/pages/article/newTMC_08.htm Ticehurst G W and Veal a J, 2000, Business Research Methods a managerial approach, Longman, London. Vivartia S. A., 2007, Flocafe [online]. Available from: http://www.flocafe.gr/en [1 May 2008].

Appendix Perceptual Map High quality Service . .Flocafe Pralina .Flocafe .Venue .La Mode .Da Capo .Likno .Monaco Least Prestigious .Mondo .Pizza Hut caf .Cafe City highly Prestigious .Le caf

Low quality Service

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