management essay
To: Mauna Loa Café Management From: Ryan Adams Date: Business Improvement Concepts Subject: October 29, 2014
I very much appreciate this opportunity for Mauna Loa Café management to consider my ideas for improving our business. The Mauna Loa staff has been like a family to me these last few months that I have started working here. As you may know, I quit my last job as CEO of Microsoft to join as and entry level worker here with Mauna Loa Café. I have never been more satisfied with a career change, working here has been very fun and fulfilling to my everyday life. The opportunity to lay out my ideas for management to hear is one I will most certainly take full advantage of. The following three concepts have been my top thoughts for how to get Mauna Loa back on track to become the powerhouse of coffee chains.
1. Sprinkle a little bit of crack into each coffee
Crack cocaine has been known to be one of the most addictive substances to men and women alike. Much like Coca Cola did during the start of their business, we can gain lifetime customers through adding this ingredient to our coffee. Not only will this add to customers' energy levels, but they will start to crave our product more after a cup or two. I understand this plan is a hefty initial investment, which could run us upwards of half a million dollars to supply all of our stores with this ingredient, but research suggests this will more than triple our net income, which more than covers for the price of crack. Also this plan is very risky with the possibility of law enforcement stepping in. However, if we package the ingredient ourselves and call it by a different name, like "caffeine additive," we have a very big possibility of pulling this off.
2. Offer alcoholic coffees
Adding alcohol to our menu will not only attract a new, untapped customer base, but will also add to our net income by offering this alcohol at a higher price than regular coffee. With the option of adding a few shots to your coffee, this will attract the elusive younger crowd we have tried so hard to pull in. 99% of adults age 21-25 get their coffee from Starbucks (bastards). Research also shows that about 60% of that demographic drink alcohol on a weekly basis. With the addition of alcohol to our coffee we can pull about 40% of this age group to our franchise, which will dramatically increase our sales while hurting any competing Starbucks in our area. The average retail price of alcohol is about three times the cost of bulk prices. This means we can charge $3 per shots of alcohol, which only costs up $1 to add, leaving us with an additional revenue of $2 per added shot. This can increase our overall income by about three million dollars a year.
3. Book live music to play at our shops
Many of Mauna Loa Café customers are long term dedicated consumers. We need to reach out to the younger age groups if we are to thrive in this business. Drinking coffee at a young age has become an epidemic, these young drinkers, ages 16-22, are commonly referred to as "hipsters." Hipsters pride themselves in three things: drinking coffee, dressing like sensitive little girls, and listening to "undiscovered" bands. With a little research, we can find and book whichever bands are popular in the area of each shop. Most of the hipster bands are willing to play for as few at $10, but they will bring in potentially thousands of dollars worth of hipster money to the shop that booked them to play. Calculations suggest that if every current Mauna Loa Café booked a band a month for the next year, we can add more than two million dollars of revenue!
At the very least, I hope this sparks movement among the Mauna Loa management to implement one or more of these ideas, or a variation of them. Thank you for your time, and for this opportunity. Mahalo and aloha.
To: Mauna Loa Café Management From: Drew Allensworth Date: February 9, 2017 Subject: Proposal of New Strategies to Increase Sales and Customers
In the past seven years, Mauna Loa Café has become my ohana and I care deeply about its success. As such, I am truly grateful for the opportunity to present my solutions to our lagging sales. Consumers have a multitude of choices for coffee and Mauna Loa Cafés must stand out as places of particular benefit. To increase sales in current Mauna Loa locations and enlarge the customer base, I propose new product marketing, cost-effective cafe redesigns, and a new focus on food offerings. Implementing these three solutions is projected to expand our customer base by 14% annually and increase monthly profitability by 22%.
Marketing Mauna Loa's products as "Premium," "Hawaiian," or "Kona" is not enough. Currently, this core selling feature of Mauna Loa products is hurt by Starbucks and other coffee shops when they introduce coffees sourced from other "exotic" locations. The cafe's experience must be exclusive. Likewise, the beans should be viewed by customers as a fleeting commodity. Recent marketing studies show that consumers will pay 28% more for a product they perceive as having limited availability. Additionally, consumers are 42% more likely to purchase a "scarce" product over the highly-available one, regardless of actual scarcity. To take advantage of this tendency, Mauna Loa should introduce "seasonal, " "new crop, " and "small-lot" as key words with a harvest date mentioned for emphasis. Hand-crafted seasonal drinks should be offered with coffees named by a particular farm, dirt-patch, hillside, micro-climate, or other unique location (i.e. "Pilau Farm, February 2017 Limited Harvest: small-lot organic pulmeria-shaded Arabica and Robusta hybrid."). Customers should not be expected to care about the origin details. Instead, they must know that the only place that will ever offer the experience of these highly rare treats is Mauna Loa Café. With this strategy, sales of higher priced鈥攁nd higher profit-margin鈥攑roducts are projected to increase dramatically.
My second proposal addresses the physical store locations. The general "warm, friendly atmosphere" of Mauna Loa's Cafés are bland, indistinct, and unfriendly to technology. Students are not catered to in the current cafe designs and the decor fails to resonate with the 18 to 29 demographic based on a recent customer survey. My proposed tactic has two benefits. First, younger customers who do not stay in the cafe will carry our branding to brand-conscious peers and college campuses. Second, students who choose to study in Mauna Loa cafés will attract friends and study groups. This provides both additional customers and a high probability of repeat sales as the study session progresses. To capture these customers, Mauna Loa should make three changes. First, purchase new tables, chairs, and couches to be arranged in a manner that gives groups places to work, and individual's private enclaves to study. The decor should embrace modern Hawaii, pop-culture, and a rotation of art from young artists local to the cafe location. Second, power outlets must be made abundant and easily accessible from every seat. Lastly, Wi-Fi should be upgraded to accommodate many concurrent users at speeds conducive to downloading files or gaming. This new focus will require an initial investment in new decor and cafe redesign, plus additional monthly internet costs. However, the increased monthly costs will be more than offset by additional daily sales. Likewise, the payback period for an average cafe's redesign is expected to be only four months, but the redesign will attract and retain new customers for years. In all three cases, the return on these investments is exceptionally high.
To expand market share, Mauna Loa must renew their focus on high-quality foods with a much broader scope of offerings. Current Mauna Loa food offerings are average in quality, have remained unchanged for several years, and focus solely on traditional breakfast pastries. In the lore of the company, the original cafe offered Hawaiian-influenced foods made from locally sourced ingredients in the kitchen of our founder, Joshua Kai. Mauna Loa has let down the vision of our late founder, and shows no financial benefits in its current food strategy. The contract with our current bakery is up for renewal in April, allowing Mauna Loa to renegotiate or change vendors without penalty. I propose starting a new search for bakeries that offer high-quality seasonal and organic breakfast, lunch, and anytime snack items. The items must pay homage to our Hawaiian heritage where possible, prove current with food trends, and be transportable in a frozen state to keep spoilage costs low while taking advantage of our current food storage methodology.
The goal should be to provide novel foods for customers that are readily available and reasonably priced for us. Our bargaining position for a new baker and food vendor gives the company an advantage when negotiating for prices. Additionally, new ovens should be purchased for serving hot items in every cafe-similar to Starbucks. The exclusive taste of Hawaii must be marketed heavily and vegan options should be available to cater to the higher proportion of college students. New limited-availability items should be test-marketed regularly and food stock should be kept ever-so-slightly low to allow for the perception of scarcity. In recent marketing analyses, flavor pairings of new drinks with the new foods has been shown to increase sales of both by 17%. The higher food quality, scarcity perception, and expanded selection will work to increase sales of food items beyond current offerings. This is based on the same marketing principles that should be used for our coffees.
With the changes of new marketing, redesigned cafes, and foods selected to appeal to current tastes, Mauna Loa Café will experience a revitalization of its sales and brand image. Marketing costs will remain similar, renovation costs have a strong return on investment, and food vendor renegotiations offer an opportunity to procure better items at acceptable prices. The legacy of Joshua Kai and his vision for Mauna Loa Café are at stake.
My detailed analysis is available as a report and I would be happy to answer any questions.
To: Mauna Loa Café Management From: Melissa Farias Date: October 21, 2015 Subject: Business Development
It's the golden era for coffee lovers. Despite cafes always being in trend, consumers have grown to be particular when it comes to the quality, taste and presentation of their coffee. Mega corporations, such as Starbucks, have taken the lead in the coffee industry, invading cafe and leaving little room for them to flourish, if not, survive. Mauna Loa Café is an empire that has yet to blossom to its full potential, but just like other coffee shops who were conquered by the big companies, it too can dissipate. To prevent such occurrence, especially since our corporation is struggling, we need to shift in a different direction. With so many diverse tools at its disposal, this company has yet to use them properly due to shortages of various products, poor marketing and the deprived atmosphere that we have presented. The following information that I will offer is my business perspective on how I think we can salvage Mauna Loa Café.
Product
We pride ourselves in using one of the most expensive coffee beans in the world to our consumers, yet, we lack variety. We have pastries to compliment our products but we don't have an exquisite menu for an exquisite cup of Kona coffee beans. We have to change the menu and add savory dishes that doesn't only consist of sweet desserts. Since we value our motto of providing the finest grade of coffee beans and give a taste of luxury to our consumers, we need to keep our stance on that belief and provide hedonistic plates to the cafes. Gourmet sandwiches, bistro salads, and appetizers rich in flavor with a Hawaiian flair are menu concepts to look into. Also, not every consumer is set on loving Kona coffee beans. Diversity in coffee beans is a necessity for every coffee shop. Aside from providing Kona beans, we should indulge other types from around the world, especially Kopi Luwak beans. Kopi Luwak, also known as civet coffee, is a type of coffee berry that is eaten and excreted by the Asian palm civet. Remarkable, isn't? There are many customers who enjoys an acquired taste of civet droppings and since it's refreshingly different, but still luxurious, it can attract a new crowd of revolutionary patrons.
Marketing
Without a marketing plan, no matter how good the product is, a business cannot prevail. A strong marketing team is needed in order to make the foundation of any organization, next to human resources. And our company desperately needs a marketing plan that is innovated. A few things that can be added to the plan is the way we attract our clients. A lot of clients love to sample before they buy, especially if he/she is indecisive of what to get due to not knowing how a certain coffee tastes like or what is tickling to his/her liking at the moment. By offering coffee samples, it can provide a deeper connection between the customer and the items we are selling. Advertisements of happy hour menus and the occasional event of buying any drink or meal and get the other half is another route to go. Most consumers likes a bargain and despite the indulgent investment they are making for themselves when they go to a luxurious cafe, they like knowing they can get more than their dollars' worth. Setting up specials on the menu, having half off events and even giving away free sample bags of coffee beans when they spend over $20.00 is a way to keep clients intrigued. We can also host monthly events of book signings, support local artists and have them perform live music or any artistic lesson that may interest our clients. Another thing I would like to elaborate on is service. Service sells and marketing our shops with impeccable provision is a way to boost sales. We are retailing an exclusive service to our consumers, therefore, customer amenities should be top notch. Training our staff to carry on their duties in a professional fashion is crucial. From the moment our client enters the door, he/she should be treated with the outmost respect and be given the attention that he/she deserves by our staff. No exceptions.
Atmosphere
Imagine this—You're walking around the city on a cold autumn day. The light breeze touches your skin, ever so gently. As your feet wanders around, your eyes soaking up the warmth of the fall colored leaves, and your nose softly catches a sniff of the scent of roasted coffee, you notice Mauna Loa café. You step into the dark wooded doors and find yourself approached by a staff member, who is greeting and welcoming you to the luxurious world of coffee and savory dishes. As you sit down to look at the menu, you look around and feel as if you've been transported to a different place. The atmosphere is warm, cozy, with rich camel leather seats, mahogany colored tables and touched by a modern Hawaiian decor. You instantly feel as if you've traveled back to Hawaii, and got caught on a tropical rainstorm as you explored the island, only to have found a cafe and went in for a rich cup of coffee as you watch the rain drops hit the ground from the glass window. Yes, this is also considered marketing, but it's so important that it has to become an element on its own. Atmosphere is an extremely important component in a cafe where customers will be in and out of. The environment that we provide has to satisfy not only our concept as a company, but it has to meet the demands of the consumers who are willing to sit down and enjoy a fresh brew of coffee or plate. The setting has to be warm, inviting, luscious, and have that peaceful effect where we can mentally transport the consumer into a different space where they can feel special and at ease. Colors, furniture, lighting, decor, the layout of the front register section and the display of the products we sell, are all essential to have a successful and blooming cafe.
Please feel free to contact me for any questions, I would be more than happy to assist with more elaborate information involving statistics, financing, marketing polls or any other information you may seek. I sincerely believe that the three concepts I mentioned is a good starting point to look over and cogitate. Every business needs a good variety of products to sell, strong marketing techniques and a vivid atmosphere that will make the costumers feel right at home. I would like to thank you for even considering me in proposing a plan to benefit this company. I do have a strong vision for Mauna Loa café and I am confident that together we can fulfill the vision that we all have for this empire that has yet to blossom.