Applying the Marketing Mix (7 P’s) to your coffee shop (or any business) can solidify your marketing strategy and give you a strong marketing section for your business plan. The marketing section includes an overview of your industry and market (Industry & Market Analysis), and then analyzes where you and your competitors stand in the marketplace (Competitive & Internal Analysis). Today, we’ll use the 7 P’s of the marketing mix to strengthen your competitive and internal analysis and build your marketing strategy.
Using the Marketing Mix to Strengthen your Marketing Strategy
As you go through the 7 P’s of the Marketing Mix, keep in mind everything you researched so far in your Marketing section. The competitive matrix actually compares the marketing mix elements of your competitors, and you can use this information to find gaps and fulfill your stance in the marketplace. A strong marketing strategy will determine how to solve customer needs and be set apart from your competition.
1. Product- What does your menu look like, and are you meeting the demands in your market? What you’re selling and why should be detailed in the Products & Services section of your business plan.
2. Price- How much does it cost to produce your products? How much do your products cost to your customers? How do customers perceive your product value? Price is based on positioning (#6), because it sends a very strong message to your consumers about your value perception. Prices should also cover overall costs, however, you don’t have to make each item a primary profit center. For instance, you can sell one product at (or even below) your cost, but make up for it in selling other products with higher profit margins. You can choose a specific pricing method, or a combination of them. Here are a few pricing methods to choose from:
- Competitive pricing (most likely)– based on market and competitive prices
- Value pricing– based on value provided to your customer (such as charging more for organic, fairly sourced coffee)
- Cost-plus pricing– based on covering costs, and then marking prices from there
Generally, your prices need to match up with consumer demand and expectations. Examine competitors and price accordingly. Price too high, and you may have no customers, since they will weigh cost over benefits, and value their money over your product. Price too low and people may undervalue your products, since low price usually means low value perception as they compare you to your competition.
3. Promotion- How do you plan on communicating with your [potential] customers? Overview types of advertising you plan to spend money on. Think about how to use social media to communicate your brand.
4. Place- Where are people coming to buy your coffee? Details of your location will be covered in the operations section of your business plan, but know what features will support your strategy. Consider things like: a drive thru, parking, strip mall vs. stand alone building, industrial vs. homey feel, foot traffic, main streets, neighbors, square footage, etc.
5. Packaging- What are the visual elements of your coffee? Of your store? What is the impression given to customers from walking through the door, receiving their drink and leaving? This includes various visual elements from your brand/logo, store design and decor, presentation and packaging of your coffee, and even employee appearance.
6. Positioning- Where do you stand in the market relative to your competitors? Where do you stand in the hearts and minds of your customers? How do they see and think about you? Do you offer low prices, or are you a premium brand? What features or benefits do you offer that your competitors don’t? What words should come to mind when customers think of you (quality, service, atmosphere, etc)?
7. People- Think about your target market and the customers addressed in your marketing section. Think about what people are necessary to be part of your team. The management section will go into these key roles and responsibilities, as well as your employees.
Thinking through the Marketing Mix and knowing the how’s and why’s of executing this as a marketing strategy is a useful tool in setting yourself up as a strong coffee shop in your market. The more you have a grasp on your industry, market, competition, and yourself, the more strategic and purposeful you can be in your business decisions, which is the beauty of a good marketing plan!
Other Coffee Shop Business Plan Sections:
- Company Description
- Products & Services
- Marketing: Market/Industry Analysis & Competitive/Internal Analysis
- Entrepreuner.com: The 7 P’s of Marketing
- The Marketing Mix
- MSU Business Management Program
Note: As a fellow aspiring entrepreneur that simply wants to share my journey with you, know this is information I’ve gathered from various books on starting a coffee shop, business websites, and courses that have helped me in writing my business plan to start a coffee shop. I only hope to share some of these resources to help you get started and inspired, however this is by no means extensive. All materials available in this series are for informational purposes only, and not to be business consulting or legal advice– so do contact a licensed consultant, accountant, or attorney to obtain advice with respect to any particular issue or problem.