I.
Market Summary
Colloquy Grog Shop possess good information about the market and knows a great deal about
the common attributes of the prized and loyal customers. Colloquy Grog Shop will leverage this
information to better understand who is served, their specific needs, and how the Grog Shop can
better communicate with them.
Market Analysis
2001 2002 2003 2004 2005
Potential Customers Growth CAGR
Singles 9% 210,987 229,976 250,674 273,235 297,826 9.00%
Non-singles 7% 134,432 143,842 153,911 164,685 176,213 7.00%
Other 0% 0 0 0 0 0 0.00%
Total 8.23% 345,419 373,818 404,585 437,920 474,039 8.23%
Market Trends
The market trend is headed toward a more sophisticated customer. The restaurant/bar patron
today is more sophisticated in a number of different ways:
Food quality: the preference for higher-quality ingredients is being reinforced as customers are being
subjected to an increasing number of options.
Quality conversation: patrons are recognizing intellectual conversations can be had in bar settings
and would prefer this over normal bar talk.
Access to meeting people: people are tired of being single and are looking for ways to meet like-
minded individuals.
C. Environmental Analysis
Opportunities
A growing market with a significant percentage of the target market still unaware of the Grog Shop.
Increasing sales opportunities as people become familiar with the advantages of the structured conversation
system.
The ability to lower variable costs through efficiency gains.
Threats
Competition from taverns.
Competition from other sources of singles meeting events.
A slump in the economy which will decrease discretionary spending.
Keys to Success
Attracting customers who find value in the Grog Shops offering and who will frequent the Shop
regularly in order to meet like-minded single people.
Excellent customer service.
Maintaining a cost of goods on foods at below 50%.
II. competitive analysis
A.Competitive Positioning
The Colloquy Grog Shop will position itself as a reasonably priced tapas/bar/coffee house that has an innovative, effective system for
allowing single to meet each other.
The Colloquy Grog Shop's positioning will leverage their competitive edge:
A unique approach to getting singles together called the structured conversation system. This system was
detailed in the Product and Services section, please refer to that section for more information.
This system is a competitive edge because most bars/taverns do not have a niche that they are concentrating
on. While every bar or coffee shop has a certain "flavor" and that is why someone will choose one bar or
another, the flavor is only surface deep. The business model of the establishment is to sell alcohol and
provide a social setting. Beyond these two values, there is little other genuine value that the establishments
try to provide.
Colloquy Grog Shop is distinguished by the fact that their business model concentrates on developing value
for customers beyond serving drinks. The Grog Shop develops an effective, albeit inherently structured,
social setting that encourages meeting like-minded individuals. Providing the drinks is the source of
income, an ancillary part of the business model. Generating value for the customers is the main focus, if
the customers are happy then the revenue will follow (assuming of course that proper marketing and
financial controls are employed). Concentrating on the client's needs beyond serving alcohol is the
distinguishing characteristic that will allow Colloquy Grog Shop to rapidly gain market share.
C.Marketing Strategy
Colloquy Grog Shop's strategy will be based on communicating Grog Shop's value to the targeted
segments. This will be done through a variety of methods. The first method will be strategically placed
advertisements. One place that will be used for advertisements is the Willamette Weekly, the liberal arts
magazine that details all of the entertainment in Portland. This will be the main source of advertisements
because the demographics of their readership are fairly similar to Colloquy Grog Shop's demographics.
Another source of marketing will be done with strategic relationships with companies that have similar
customer demographics. One prime example is the Multnomah Athletic Club. While the club's patrons are
not necessarily overwhelmingly single, the rest of the demographics match up. The MAC is a fairly
exclusive downtown athletic club that by virtue of the membership costs, attracts professionals. The
strategic relationship with be mutually beneficial where both organizations will develop visibility for each
other.
The other form of advertising will be using "grassroots" methods where customers will be given coupons
for their friends to try Colloquy Grog Shop for the first time. The coupon will be an economic incentive for
the newcomer to try Colloquy Grog Shop. The coupon also has the added force of a referral from a friend.
III.
A. Colloquy Grog Shop is a unique local bar/coffee/tapas house that provides a friendly, effective
place where singles can meet. Colloquy Grog Shop is not your typical bar where people go to
meet other singles. Colloquy Grog Shop has a unique service called the structure conversation
system that is quite effective for allowing singles to meet each other and provide them with
valuable insight into the other person through reflective conversation. The structured system
provide an atmosphere that lowers inhibitions and breeds confidence allowing singles to meet
other singles and gain insight into their personality by way of thoughtful discourse.
Meeting people is one of the largest hurdles 25-45 year old singles face. Colloquy Grog Shop
provides this group with an effective solution to this problem.
C. Strengths
Strong relationships with third party vendors.
Excellent staff who are highly trained and customer attentive.
The structured conversation system.
Weaknesses
The Grog Shop's limited brand equity.
The struggle to continually have current and new conversation topics.
A limited marketing budget to develop brand awareness.
D. Market Segmentation
Colloquy Grog Shop's customers can be broken down into two groups: singles, and non-singles.
The non-singles group is smaller by virtue of the fact that if you are meeting someone whom you
already know, the two of you can come up with the topic of conversation yourself, therefore, Grog
Shop offers this group less value. The demographics for the non-singles is similar to the singles, to
be listed below. The demographics of the singles are:
Single: self evident.
Professional: this characteristic is intuitive since the the underlying element of Colloquy Grog
Shop is thoughtful conversation, and most, if not all professionals are intelligent and appreciate
thought-provoking conversation.
Income over $40,000: this to a large degree correlates to the fact that they are professional.
The one exception are teachers who are underpaid relative to their contribution to society.
Age 25-45: the largest group of singles looking for companions.
2. Market Needs
Colloquy Grog Shop is a unique bar/coffee shop/tapas house that is organized to try to facilitate
new friendships. The Grog Shop will offer a changing menu of tapas, microbrews, and assorted
coffee drinks in conjunction with a structured conversation system. Colloquy Grog Shop seeks to
fulfill the following benefits that are important to their customers.
Selection: a creative choice of food and drink and a well-constructed structured conversation system.
Accessibility: the patron will gain access to the Grog Shop with minimal waits and long business hours.
Customer service: the customer is ALWAYS right.
Competitive pricing: all products will be competitively priced relative to the competition.
3. Competition and Buying Patterns
The competition comes from several different sources.
Bars: there are many different types of bars or taverns. Some are better than others for
meeting people, however, none have the business mission to bring together singles.
Coffee shops: coffee shops are typically an easy-going social setting that does lend itself for
people to meet others. Conversations occur in part because of the historical underpinning of
coffee houses, in part by virtue of the fact that the background music is not blaring. Coffees
shops rarely have any type of organized activities to bring singles together.
Other events activities aimed at bringing together singles: one phenomenon that has started
in New York City and moved to a few other larger cities (not including Portland) is an activity
that has a long rectangular table that always has one seat opposing the other. People will sit
down and with females on one side and males on the other (this seating arrangement is for
heterosexual gatherings, the homosexual gatherings will obviously have the same sex on both
sides) and will have a limited number of minutes (usually 10) to chat. Typically, conversations
can be be about anything, however you are not to reveal the job/profession that you are
involved in, beyond that, anything is fair game. The table rotates and you end up speaking
with a lot of different people. You then create a list of the top five that you would like to speak
with again and if the matching person also has you on their list, phone numbers are released to
the two people. Another activity might be some sort of outdoor activity like hiking or rafting
and it is organized as a singles event. There are also other type of singles events, too numerous
to mention. Lastly, there are resources like personal sections in local papers where people
can post or respond to personal advertisements.
Every person has their own method of meeting people, some more useful than others. Colloquy
Grog Shop predicts singles will abandon or at least supplement their current method of meeting
people with the Grog Shop's activities as they are thoughtfully designed to achieve the goal of
introducing like minded individuals.
E. PRESENT MARKETING STRATEGY
1. Target Market Segment Strategy
Colloquy Grog Shop strategy will be based on communicating Grog Shop's value to
the targeted segments. This will be done through a variety of methods. The first
method will be strategically placed advertisements. One place that will be used
for advertisements is the Willamette Weekly, the liberal arts magazine that details
all of the entertainment in Portland. This will be the main source of
advertisements because the demographics of their readership are fairly similar to
Colloquy Grog Shop's demographics.
Another source of marketing will be done with strategic relationships with
companies that have similar customer demographics. One prime example is the
Multnomah Athletic Club. While the clubs patrons are not necessarily
overwhelmingly single, the rest of the demographics match. The MAC is a fairly
exclusive downtown athletic club that by virtue of the memberships costs, attracts
professionals. The strategic relationship with be mutually beneficial where both
organizations will develop visibility for each other.
The other form of advertising will be using "grassroots" methods where customers
will be given coupons for their friends to try Colloquy Grog Shop for the first time.
The coupon will be an economic incentive for the newcomer to try Colloquy Grog
Shop. The coupon also has the added force of a referral from a friend.
2. Marketing Mix
Colloquy Grog Shop's marketing mix is comprised of these following approaches to
pricing, distribution, advertising and promotion, and customer service.
Pricing: the pricing scheme is based on standard industry practices.
Distribution: all services and products will be distributed from Colloquy Grog
Shop's retail space.
Advertising and promotion: the most successful advertising will be with
Willamette Weekly. Additionally, strategic relationships will be developed with
companies such as Multnomah Athletic Club as well as use of a grassroots
promotion system.
3. Competitive Edge
Colloquy Grog Shop's competitive edge is based on their unique approach to getting singles
together using the structured conversation system. This system was detailed in the Product and
Services section, please refer to that section for more information.
This system is a competitive edge because most bars/taverns to not have a niche that they are truly
concentrating on. While every bar or coffee shop has a certain "flavor" and that is why someone
will choose one bar or another, the flavor is only surface deep. The business model of the
establishment is to sell alcohol and provide a social setting. Beyond these two values, there is little
other genuine value that the establishments try to provide.
Colloquy Grog Shop is distinguished by the fact that their business model concentrates on
developing value for customers beyond serving drinks. The Grog Shop develops an effective,
albeit inherently structured or artificial, social setting that encourages meeting like-minded
individuals. Providing the drinks is the source of income, an ancillary part of the business model.
Generating value for the customers is the main focus, if the customers are happy then the revenue
will follow (assuming of course that proper marketing and financial controls are employed).
Concentrating on the client's needs beyond serving alcohol is the distinguishing characteristic that
will allow Colloquy Grog Shop to rapidly gain market share
IV. IDENTIFIED MARKET OPPORTUNITY
A growing market with a significant percentage of the of the target market still unaware
of the Grog Shop.
Increasing sales opportunities as people become familiar with the advantages of the
structured conversation system.
The ability to lower variable costs through efficiency gains.
V.PROPOSED TARGET MARKETS
A. DEMOGRAPHICS
B. PSYCHOGRAPHICS
C. BEHAVIORAL
D. GEOGRAPHIC
VI. A. Marketing Objectives
Develop brand awareness through a steady, month to month increase of new
customers.
Develop an increase in sales while achieving a status quo state or decrease in
marketing expenses.
Develop awareness of the structured conversation system measured by customers
coming to the Grog Shop solely for meeting people.
Financial Objectives
A double digit growth rate for each future year.
Reduce the variable costs through efficiency gains.
Reach profitability within the first year.
VII. Marketing Strategy
Colloquy Grog Shop's strategy will be based on communicating Grog Shop's value
to the targeted segments. This will be done through a variety of methods. The
first method will be strategically placed advertisements. One place that will
be used for advertisements is the Willamette Weekly, the liberal arts magazine
that details all of the entertainment in Portland. This will be the main source of
advertisements because the demographics of their readership are fairly similar to
Colloquy Grog Shop's demographics.
Another source of marketing will be done with strategic relationships with
companies that have similar customer demographics. One prime example is the
Multnomah Athletic Club. While the club's patrons are not necessarily
overwhelmingly single, the rest of the demographics match up. The MAC is a fairly
exclusive downtown athletic club that by virtue of the membership costs, attracts
professionals. The strategic relationship with be mutually beneficial where both
organizations will develop visibility for each other.
The other form of advertising will be using "grassroots" methods where customers
will be given coupons for their friends to try Colloquy Grog Shop for the first time.
The coupon will be an economic incentive for the newcomer to try Colloquy Grog
Shop. The coupon also has the added force of a referral from a friend.
VIII. Marketing Mix
Colloquy Grog Shop's marketing mix is comprised of these following approaches to
pricing, distribution, advertising and promotion, and customer service.
Pricing: the pricing scheme is based on standard industry practices.
Distribution: all services and products will be distributed from Colloquy Grog
Shop's retail space.
Advertising and promotion: the most successful advertising will be with Willamette
Weekly. Additionally, strategic relationships will be developed with companies
such as Multnomah Athletic Club as well as use of a grassroots promotion system.
Customer service: obsessive customer attention is the mantra. The Grog Shop's
philosophy is to do whatever needs to be done to impress the customer. While
this could reduce short-term profits, it will strengthen long-term profitability.
IX.
A. Sales Forecast
The first two months will be used to set up the physical location, hire personnel, establish
vendor relationships and obtain an alcohol license. The third month will be the grand
opening. Business during the second month will be understandably slow as a steady customer
base takes time to build. By month four it is forecasted that sales will steadily grow.
P30,000
P25,000
P20,000
P15,000
P10,000
P5,000
P0
P30,000
B. Expense Forecast
Marketing expenses are budgeted to remain fairly steady throughout the year.
There will be an initial ramp up of spending to generate visibility. After this ramp
up advertising will be fairly consistent month to month.
P1,00
P900
P800
P700
P600
P500
P400
P300
P200
P100
P0
C. The following table will indicate projected profit and loss.
PRO FORMA PROFIT AND LOSS
YEAR 1 YEAR 2 YEAR 3
Sales P175,829 P450,282 P492,811
Direct Cost of Sales P55,842 P143,005 156,512
Other Production Expenses P0 P0 0
TOTAL COST OF SALES P55,842 P143,005 P156,512
Gross Margin P119,987 P307,277 P336,299
Gross Margin % 68.24% 68.24% 68.24%
Expenses
Payroll P144,900 P162,980 P167,980
Sales and Marketing and Other P2,400 P2,400 P2,400
Expenses
Depreciation P9,996 P9,996 P9,996
Permits P1,200 P1,200 P1,200
Utilities P2,400 P2,400 P2,400
Insurance P3,000 P3,000 P3,000
Rent P18,000 P18,000 P18,000
Payroll Taxes P21,735 P24,447 P25,197
Other P0 P0 P0
Total Operating Expenses P203,631 P224,423 P230,173
Profit Before Interest and Taxes (P83,644) P82,854 P106,126
EBITDA (P73,648) P92,850 P116,122
Interest Expense P0 P0 P0
Taxes Incurred P0 P24,856 P31,838
Net Profit (P83,644) P57,997 P74,288
Net Profit/Sales -47.57% 12.88% 15.07%
X.ATTACHEMENTS/ APPENDICES
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