Executive Summary
This paper presents a marketing paper focused on discussing Shavasana Hammock Café that offers a unique format of a dining establishment. The paramount goal of the café is to provide a new customer experience and create brand loyalty via social media marketing and direct communication. In the era of a high risk of stress both at home and work, there is a need to relax, which is taken as a basis by the proposed project. Namely, customers are invited to try a new way of combining eating, communicating, and relaxing in comfortable hammocks and swings. Healthy foods and fresh juices complement this oasis of pleasure that can be visited during a lunch break or family holidays.
Current Marketing Situation
Market Description
The restaurant industry is one of the largest sectors of the global economy, and drinks and foods play an important role in society. In 2018, the US restaurant industry outperformed at $800 billion, which shows its expansion compared to previous decades (Dubey, Davies, & Gupta, 2018). In the conditions of the modern metropolis and globalization, a lack of free time extremely increases the demand for such services.
The identified industry is an extensive business area that is characterized by a variety of forms of services and a large range of products offered. Cafes and restaurants offer their services to different types of customers while not forgetting to take care of protecting their reputation. Today, this industry encounters a challenge of increasing prices and high competition, which may be addressed by diversification and optimization of the quality of foods and drinks.
The current trend is that the industry experiences the need to create new formats of dining, having lunch, or visiting a coffee shop as a way to negotiate with business partners and friends. Such a diversity of purposes dictates the establishment of various segments on the market. In general, it is possible to distinguish between four major areas, including fine-dining, casual-dining, fast-casual chains, and quick service (Dubey et al., 2018).
The first of the mentioned sectors focuses on customers who visit restaurants with partners or families to spend at least two hours or the whole evening on dining and communicating with others. For example, Capital Grille or Fleming’s are positioned as restaurants that strive to provide customers with a unique experience not only through an extensive menu but also an atmosphere of hospitality and design. Fast-casual chains and casual-dining establishments target people who enjoy the limited table service and moderately priced food, which is offered, for instance, by TGI Friday’s. A quick-service segment includes McDonald’s, Taco Bell, and many other fast-food chains.
One of the most demanded segments is the one that helps customers to practice healthy lifestyles and proper nutrition. Overweight and obesity are two main concerns stated by the Centers for Disease Control and Prevention (CDC). It is reported that “the prevalence of obesity was 39.8% and affected about 93.3 million of US adults in 2015~2016” (“Adult obesity facts,” 2018, para. 1). In this connection, it is especially important to increase awareness of the population and assist them in changing their lifestyles. This initiative tends to be supported by plenty of establishments, beginning with large restaurants and ending with movable fast food trucks.
Benefits and Product Features
While the restaurant industry has a lot of segments that can be identified by customers, purposes, and costs, it seems more appropriate to focus on types of establishments and their services. At the same time, it is possible to note that the segments may be positioned in a line, where certain factors will be decisive for customer choices. In particular, the line may look as follows: fine-dining, casual-dining, fast-casual chains, and quick service.
The factors of price and convenience may be assigned to the extreme points since fine-dining restaurants are the most expensive ones, and, by the very definition, fast foods provide the most rapid service. Fine-dining restaurants have such benefits as high-quality foods, a wide choice of drinks, and a great hospitality environment. In their turn, fast food chains attract by their cheap meals, quick service, and convenient locations that can be found almost anywhere.
The two more segments have much in common, yet casual-dining and fast-casual restaurants distinguish by the quality of services and offered food. Basically, casual restaurants provide table service and prepare dishes directly in their kitchens. They are usually a part of a wider chain, but some of them may be independently owned by different people (Dzhandzhugazova, Blinova, Orlova, & Romanova, 2016).
A casual atmosphere along with moderately priced foods and drinks are two benefits that are regarded by customers as the most appealing ones. In their turn, fast-casual restaurants may be located between casual dining and fast food cafes in terms of food quality, service, and atmosphere. Therefore, customers who want to have a dinner and a higher quality may choose fast-casual restaurants.
Product Review
Shavasana Hammock Café is a newly emerged company that was introduced to the market six months ago. The primary idea of this fast-casual restaurant is to offer customers a place where they can relax, eat, and communicate with colleagues, friends, and families. The word Shavasana refers to yoga practice and means a body position that is used to achieve the fullest relaxation. This position promotes the most vivid experience of a full-fledged existence, replenishment of energy resources, and a deep connection with one’s internal world. Customers have the opportunity to add inspiration to their everyday life, turn an ordinary date into a truly romantic evening, or relax during a lunch break.
The interior design reminds of raves in the middle of a fairy-tale forest or psychedelic parties on distant sea beaches – there are cozy hammocks and swings. Pictures 1-3 in Appendix show the interior that can be used for this café (there is no such a company in reality). The unique atmosphere of the establishment is supported by ultraviolet evening decoration and fragrant aromas. In addition, wigwams suspending from the ceiling provide even more comfort and pacification.
Convenient hammocks, large windows overlooking the park, light brick walls, an open kitchen, and stands with letters and photographs are details that make the cafe truly home-like. In Shavasana Hammock Café, one can not only eat well but also have a great time. The poster of the cafe pleases with a variety of events – from master classes on various types of yoga to an evening of piano music. In particular, master classes on drawing, meditation, singing, and other activities are provided depending on the preferences of customers. In this regard, the café cooperates with professionals who are invited to participate in these activities, which ensures their high quality and customer satisfaction.
This café may be identified as the one that strives to create a place for creative art, effective communication, and relaxation. The discussed products may be useful to such customer segments as office workers tired of daily routine and families with children who want to spend evenings together. Couples that are in search of new experience and people who want to dive into a new world of pleasure may also be noted.
Competitive Review
The hammock café concept is a relatively new type of establishment that offers dining services. However, the growing popularity of yoga practices makes more and more people aware of its benefits. The given café has two main competitors: Oasis of Relax and Yoga Café, which offer similar services. Healthy food and yoga masterclasses are the features that are presented in all these establishments. However, the internal design of the competitors is casual with conventional seats and decorations. Shavasana Hammock Café’s competitive advantage is its décor with hammocks and wigwams that add new experiences.
At the same time, Yoga Café seems to be too professional to attract a lot of customers as it is rather a place for those who practice yoga every day. On the contrary, the proposed café is open to anyone who is in search of a place to relax during or after a busy day. In other words, it allows combining eating, relaxing, and practicing if required.
Oasis of Relax in the space with large mirrors and chandeliers in the form of glasses created for true gourmets who love delicious food and, at the same time, try to keep themselves healthy. The idea of the restaurant is to treat the guest with dishes prepared using only healthy ingredients with minimal taste sacrifices in a guilt-free format. The slogan of this place is pleasure and wine without guilt: why eat unnecessary and sometimes harmful calories if one can come up with a lighter alternative? The point is not to strive for minimum calorie content in a dish but to remove useless elements from a gastronomic equation, in which the main thing is taste. Oasis of Relax is more suitable for adult visitors without children since they offer alcoholic drinks and hookahs.
Distribution Review
The distribution strategies used by the mentioned competitors are brochures disseminated on the streets and social media presence. Both of them have no official websites and rarely post news in their social media groups on Facebook. In turn, Shavasana Hammock Café strongly supports the idea of gaining more customers by publishing announcements of the upcoming events, news, and feedbacks left by happy customers. In general, the marketing strategy used by Shavasana is more comprehensive and active compared to its rivals.
Strengths, Weaknesses, Opportunities and Threats Analysis
Since the external and internal environment changes under the influence of a company and other factors, it is necessary to identify current strengths, threats, opportunities, and weaknesses by using a SWOT analysis. On the basis of the results obtained, the marketing strategy recommendations will be formulated. It should be stressed that strengths and opportunities are the key areas that help in determining a proper marketing mix.
Strengths
The internal capabilities of the proposed company are likely to help it in achieving the goal of attracting more customers and retaining the existing ones. The first strong point that can be mentioned is its relevance to modern realities. When a person has a very tense working day, it is critical to turn his or her attention to something else. Shavasana Hammock Café is a perfect choice for those who dream of diving into a new reality without traveling to other cities and countries.
The second strength is a wide choice of healthy foods and fresh juices, which is definitely important for changing lifestyles and having quality leisure time. For example, smoothies and soup puree items in the menu are unique positions that can be found in a limited number of establishments. The third essential strength is the special focus on yoga, especially for those who are beginners or persons who want to learn more about this issue. The growing demand for diverse physical activities is a trend that creates interest in new areas.
Weaknesses
Even though the strengths are evident, some limitations should also be noted to have a full picture of the proposed company’s performance. First of all, there is a lack of a brand creation process, and many customers are unaware of the existence of such a café. The inability to ensure that the management does its best to create brand loyalty may lead to the fact that there will be insufficient profit.
Second, yoga practice is not fully new to the US, while it is still regarded as something that came from the East. In this connection, potential customers may think that the format of the café will not meet their needs and expectations. Poor management and a relatively moderate level of service may also be included in the list of weaknesses. Since Shavasana Hammock Café was launched recently, not all the managers and administrators have mastered their responsibilities, and some misunderstandings may occur.
Opportunities
Modern life is full of stresses and tensions: people have to encounter difficult situations at home, work, and on the way to the ultimate destination. The hectic pace of life leads to overvoltage, which is especially evident in large cities, where people are full of ambitions and desires to achieve material well-being and glory. Today, an increase in stress and a decrease in the ability to cope with it, followed by balancing and stabilization, are characteristic. Since stress takes a lot of energy, people quickly get tired and need to relax. To relieve the tension of a busy day and calm the mind, Shavasana is the most effective means. The technique of this position performance is simple, but the difficulty lies in reconciling the work of the body and the mind.
Accordingly, the pivotal opportunity is associated with creating a winning customer experience by applying a highly personalized approach. For guests who want to spend a couple of hours alone, there are cozy hammocks in which they can wrap up. For companies of 3-4 persons, wigwams with comfortable seats and combo offers may be offered. In other words, the opportunity lies in diversifying services and targeting several customer segments. In addition, loyalty programs may be used as a means to make customers return due to feelings of engagement and sincerity of the café.
Threats
Among the threats, one may list economic and cultural factors that may adversely impact the café. Adverse demographic changes, inflation, and the decrease in the general level of purchasing power are the main issues that should be taken into account by the company’s management. Since the global economic environment remains volatile, the mentioned factors may turn out to be critical for the success of the café when many startups have to close because of the increased costs. Also, changes in consumer preferences, as well as potential customer dissatisfaction with product quality, may be identified as threats. Due to the fact that the topic of yoga is an element of another culture, it may be met wary and detachedly even in terms of globalization that integrates various countries and nations.
Objectives and Issues
The first objective is to build brand awareness among the target customers. One of the important areas is the development of an advertising message. It is necessary to analyze advertising messages from competitors and determine the functions they perform, including the transfer of information and familiarization of potential consumers with the features of the advertised product. It should be noted that marketing is closely connected with the process of formation of the image of the restaurant. The goals of marketing are informing consumers about the opening of a new establishment, forming a positive opinion about the restaurant, and attracting as many customers as possible.
The second objective is referred to as the moderate expansion of the company. In the condition of dynamically growing demand, it is also possible to open cafes in other areas of the city, creating a network (Baker & Hart, 2016).
This objective is to be accomplished via the steady growth that will be measured by unit sales volume on a monthly basis. Another important factor is the need to increase the volume of customers, focusing on long-term guests who may also provide their feedback. While the first objective will be realized in the first year, the second one is for the subsequent year of performance. In case the very idea of the café will be unsuccessful, it is proposed to renovate it and adjust to the needs of customers in a similar niche. One more significant issue is the limited budget, which makes some restrictions on the marketing strategy.
Marketing Strategy
Positioning
The opening of the café is now quite a popular investment object, which pays off on average for 1-3 years, depending on the region and location. A café is one of the few enterprises that are in demand among the population to meet the public needs for these products and make a profit (Hudson, Huang, Roth, & Madden, 2016). Moreover, the increase in establishments such as free-flow is noticeable throughout the country. Shavasana Hammock Café is positioned in a unique manner since there are only two similar establishments that essentially differ. In particular, the aspect that distinguishes the given café from others is its style: the combination of bohemian and industrial designs. The furniture and the menu create the atmosphere of an oasis of relaxation in a megapolis.
Product Strategy
The café is located on one of the main streets of the city, while its other side leads to a quiet courtyard, where customers may sit in the summer. The design is made in an eco-friendly way so that guests may also contribute to preserving natural resources and becoming closer to nature. The need to rest and experience a peaceful state of mind will be ensured by the provision of specific hammocks, wigwams, and swings, in which people would take the most convenient position (Kumar, Jain, Rahman, & Jain, 2014).
As for food and drinks, a menu for vegetarians as well as traditional healthy dishes will be offered. In order to warranty the benefit of dining in Shavasana Hammock Café, the local farmers will be contacted for buying meat, fruits, vegetables, and dairy products. In other words, the highest food quality will be achieved as one of the most critical product strategies.
Speaking of the brand creation, a special logo with a schematically presented hammock between two trees will be developed. For customers’ convenience, packaging and take-home orders will also be available. This will contribute to brand awareness as well since bags and brochures with the company’s logo will be observed by other people on the streets and at the home of the customers who purchased. Various master classes as an attribute of the modern world are likely to create additional interest in visiting the café.
Pricing Strategy
A skimming pricing strategy that implies a relatively high initial price will be used for the given café. With regard to marketing, price skimming will establishment a high price for a novelty product based on customers who are ready to buy this product. Skimming prices is a temporary version of price discrimination, which makes the product as desirable not as accessible to the mass market, but allows skimming by selling goods on more favorable terms (Parente & Strausbaugh-Hutchinson, 2015).
Such a strategy will allow the company to debug mass production, quickly restore its costs associated with the development and release of new items before the direct competition with rivals. After a one-year period, the price of the café will be reduced to attract the remaining part of customers who want to visit the given place but are limited in terms of money.
Distribution Strategy
The products purchased from the farmers will be prepared directly at the kitchen of the café to ensure its safety and control expiration dates. Both online ordering and an in-café menu will be available to customers. More to the point, the pre-order system and booking will be provided with the aim of helping customers to plan their visits. The main distribution channel is the café environment, and the people who will deliver services are waitresses and managers. The official website and social media will be used as cover to enter the restaurant industry and customer segments that were described earlier in this paper.
Marketing Communication Strategy
For this project, the following strategies will be used: advertising, public relations, sales promotions, direct communication, and personal selling. Considering that the proposed company will present a unique product, it is essential to apply a range of strategies and distribution channels. One of the strategies that will be used is the invitation of famous persons such as singers, bloggers, or coaches who practice yoga, especially at the initial stages of the product introduction. This is likely to clearly demonstrate the value of the new product and motivate customers to try it.
The advertising media will be used to develop a marketing campaign and plan several holiday programs for future visitors. A good result is expected to be provided by advertising leaflets that are scattered at the reception desk of sports clubs, gyms, swimming pools, and other establishments related to a healthy lifestyle. In social networks, including Facebook, Instagram, and Twitter, the public will be created to promote the product and engage customers (Kim, Koh, Cha, & Lee, 2015).
The website will detail all the information about the establishment, its features, and differences from other facilities of the city. Direct marketing communication that is also known as word of mouth will allow spreading valuable information about the café. All the mentioned means will be utilized to try to keep customers happy and satisfied, thus increasing their flow and profits.
Marketing Research
To research customers’ attitudes regarding the described café, it is planned to create the feedback option on the official website, which will be viewed by managers. All the guests will be notified of the opportunity to bring some new features to the café environment (Chernev, 2014). In case they forget to provide immediate feedback, it will be possible to leave it via social networks. A specially assigned social media manager will work with customers’ messages and report about necessary adjustments.
Marketing Organization
For customers to come again, Shavasana Hammock Café will deliver top-quality products, a friendly atmosphere of communication, fast service, and openness to new ideas. Every opportunity should be used to show customers how much they are appreciated and how they hope that they will tell about cafe products and services to their friends (Ashley & Tuten, 2015). The art of successful marketing will be practiced based on the following principle: the more communication with people, the more one can learn about their culinary tastes and overall dining preferences. It should be remembered that this business, in fact, consists in establishing and maintaining good friendly relations with the best customers.
In turn, the latter will provide the company with the most effective advertising that will help develop the company with the highest return on investment and positive public opinion. To handle marketing needs and objectives, several personnel members should be hired. A marketing coordinator will be required to create and monitor the implementation of the strategies, which will be performed by two managers. The recruiting process will include an interview with candidates and a brief survey.
Budgets
The profit and costs forecast is a document with a simple structure. It includes the following indicators: proceeds from the sale, production costs, total profit, net profit, and overhead costs. The purpose of this paper is to show how profits will change and form. Among the main costs, there will be technological equipment, furniture, design creation, space to rent, and product purchases. The amount of revenue will depend on seasonality when summer and fall attract more guests. For a period of five years, it is expected that net profit will be approximately $50,000 per month. It is expected that the company will reach the planned sales volume in the second year of work. Evaluating the results of the above costs, it can be stated that this project will achieve a break-even point in 3-4 years from the opening of the café.
Controls
The unit sales volume will be used as the primary control measure to maintain control over the café’s performance. Customer satisfaction will be evaluated based on their feedback and preferences regarding the menu. In addition, monthly sales and expenses will be assessed to compare these measures with the planned indicators. In case any of the identified factors will show that the company needs to change its marketing strategy, adjustments will be provided based on the comprehensive market review.
Appendix
References
Adult obesity facts. (2018). Web.
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Baker, M., & Hart, S. (2016). The marketing book (7th ed.). New York, NY: Routledge.
Chernev, A. (2014). The marketing plan handbook (4th ed.). Chicago, IL: Cerebellum Press.
Dubey, A., Davies, C., & Gupta, P. (2018). How the U.S. restaurant industry is negotiating a challenging environment. Web.
Dzhandzhugazova, E. A., Blinova, E. A., Orlova, L. N., & Romanova, M. M. (2016). Innovations in hospitality industry. International Journal of Environmental and Science Education, 11(17), 10387-10400.
Hudson, S., Huang, L., Roth, M. S., & Madden, T. J. (2016). The influence of social media interactions on consumer–brand relationships: A three-country study of brand perceptions and marketing behaviors. International Journal of Research in Marketing, 33(1), 27-41.
Kim, S., Koh, Y., Cha, J., & Lee, S. (2015). Effects of social media on firm value for US restaurant companies. International Journal of Hospitality Management, 49, 40-46.
Kumar, V., Jain, A., Rahman, Z., & Jain, A. (2014). Marketing through spirituality: A case of Patanjali Yogpeeth. Procedia-Social and Behavioral Sciences, 133, 481-490.
Parente, D., & Strausbaugh-Hutchinson, K. (2015). Advertising campaign strategy: A guide to marketing communication plans (5th ed.). Boston, MA: Cengage Learning.