2017

MARKETING PLAN FOR MADGE

CAFÉ

CARO, MARIE JOY

CASIPLE, KOLEEN
ESTEBAL, HONEY FAYE
LONGNO, JOSIE

4/11/2017
Executive Summary
Madge Café is a local coffee shop that provides timeless coffee experience. Madge Café had
been serving its pre-war family recipe for quite a long time. With a humble and cozy atmosphere,
it created a venue for every customer to gather, relax, take a pause, unwind or talk anything there
is under the sun while employees cheerfully serve their hot or cold, native coffee. Regardless of
one’s social status, everyone is treated like a family.

Nowadays, the world has undergone significant changes but the company has been
committed to preserve their ways of preparing their coffee and how it should be served. This
legacy sets them apart from other cafes in the market. In this modern age, this café is a remnant
of the past, where life is simple yet extraordinary.

Situation Analysis
Madge Café has been existing for seventy seven (77) years; however, it clearly needs to
market its products and services more efficiently to gain and sustain a growing market share. The
café offers an atmosphere where people meet up for several reasons. Customers are welcomed
with ease and cordial smile. This is the “personal touch” culture the family wants to share with
its customers, whether they are new or old.

 Market Summary
Madge Café knows how to communicate with their customers especially regular ones. The
café has been adequately gaining a growing market share as time goes by. The café’s welcoming
ambiance, local products and excellent customer services that is offered at reasonable prices
seem to capture their customer’s satisfaction and delight.

 Market Analysis
This evaluation will be done through the use of a micro-environment and macro-environment
analysis.
  MICRO-ENVIRONMENT ANALYSIS
Madge Café is a local café that served its pre-war family recipe from generations to
generations. Currently, it is managed by the third generation under Mr. Peter Dela Cruz. The cafe
uses Arabica coffee beans which are grown at selected areas of Visayas. Usually, customers refer
it to other people by word of mouth. However, it will have to consider competitors of
international coffee shops that is ventured in the country. Because of recent technology, the café
is not only referred by word of mouth but also making use of the social media, websites, blogs,
and television programs.

 MACRO-ENVIRONMENT ANALYSIS
Philippines is one of the countries that grows and utilizes coffee beans for business use.
Filipinos shifted from being moderate to heavy coffee drinkers ranging from ages 12-60+ by
single or married individuals. Hiligaynon culture as one of the largest Filipino ethnic groups
had a habit of rushing to work, or appointment or meals. It has become a culture that suggests
the growing market for coffee consumption.
Recently, Philippines is known as one of the fast growing economies in the world. However,
there are threats as to the shortage of raw materials, increased energy costs, increased pollution
levels and changing role of governments in environmental protection. It is a good thing that
Philippines has been considered as one of the growing producers of coffee beans. It is one of
the developing countries that agrees with environmental protection and tries to innovate a way
that lowers increasing pollution levels and energy costs. Today, the world offers technological
advances that make it convenient for people to do business. Moreover, the government had
stricter policies and encourages investment opportunities outside Metro Manila.

 Market Needs
Madge Café is a local café that provides a venue for its target market to communicate and
relax. People from different walks of life come here. Some of them gain new friends by simply
sharing a table with their freshly brewed coffee at hand. With reasonable prices, the café offers a
variety of products to choose from, seeking to bring satisfaction and delight to its respective
customers. Products ordered will be served with by the employees as fast as they can with that
ease and grateful smile.
 Market Trends
Coffee industry is headed toward a more sophisticated setting.  According to research, such
trend can be traced as the follows:
(a) Drip Coffee Drinkers – these are adults that drink coffee on daily basis. This for the
target customers who needs caffeine to survive the day.
(b) Coffee Shop Lovers – these are adults who spend time at shops and cafes where specialty
drinks and regular cups of coffee are available along with an inviting atmosphere.
(c) Specialty Coffee Drinkers – these are adults who love extra ingredients in their coffee-
based beverage and are willing to pay a premium to get what they want.
(d) Whole Bean Buyers – these are people who buys whole bean coffee to make at home or
in the office.

 Market Growth
Research shows that coffee consumption in the Philippines is estimated to increase slightly
due to a predicted increase in overall food and beverage consumption as population and income
continues to rise. This statistic displays the total coffee consumption on the Philippines between
1990 and 2016. In 2006, approximately one million 60kg bags of coffee had been consumed on
the Philippines.

The study further showed that coffee more than doubled its growth from 4% in June 2014 to
10% in June 2015, outpacing the growth of the total beverage segment at 5% for the same
period.
 Madge Café has reached “maturity stage” of its product life cycle. This suggests that there is
great opportunity for the company to earn more profits and continue to grow as a local coffee
shop in the long-run.

 SWOT Analysis
The following analysis captures key strengths and weaknesses within the company and
describes the opportunities and threats facing the café.

STRENGTHS
- Provides excellent customer services
- Promotes simple living (local delicacies and coffee)
- Affordable prices

WEAKNESSES
- Indifferent about branching out
- Very traditional

OPPORTUNITIES
- Growing coffee industry
- Branching out opportunities in Iloilo City

THREATS

- Not everyone knows about it even it has existed for 77 years

- Changing customer preferences

 Competition
Many people have invested in coffee business. There are domestic and international brands
of coffee. It is quite challenging since these coffee shops introduce another method of brewing
coffee using several technologies. International coffee shops like Starbucks, JCo’s coffee
products, Coffeebreak, Ya Kun Coffee & Toast, etc. have been penetrating the market rapidly.
Convenience, art and innovation attract their customers. In a span of time, it has established an
image of quality customer-services and coffee experience.
 Some domestic coffee shops in Iloilo City including Blue Jay Coffee, Bo’s Coffee, etc.
would also find such international brands to be very well-established. However, the café seeks to
improve its product and services even there are a growing number of competitors in the area.
Madge Café passionately adheres to preserve their way of brewing coffee and how it should be
served.

 Product Offering
Madge Café’s pride had been serving their freshly brewed coffee using a takure (kettle) and
kolador (strainer). It offers a variety of coffee blends like media cafe, media regular, media tab-
ang, media puro, puro regular, and puro tab-ang, paired by kakanin and other native delicacies.
They also offer breads like pan de ciosa, betchokoy, cream roll, ham roll, threaded hotdog, royal
bibingka, and banana loaf that is outsource from their trusted suppliers.
Through continuous innovation, Madge came up with their own version of cappuccino,
caramel macchiato, choco caliente, Nai Cha, plain tea, and ginger ale.
Since, tastes can vary wildly, Madge added more products to attract more customers in Atria.
They have different types of lemon grass and turmeric ginger beverages that is served both in hot
and cold drinks, fruitggies which is a combination of fruits and vegetables, shakes and cold
treats, frappés, and lemonade juices. They have also "silogs” or rice meals, pastas, calea cakes
and more of native delicacies as meryendas.
Through experimentation and innovation, the Madge owner, Mr. Peter, is planning to add on
their menu the recently discovered coffee drink with fruit combination called Calypso and
Vanstrawfe. Calypso is a combination of banana, coffee and cream while vanstrawfe is a
combination of vanilla, strawberry and coffee. These were initially tried by various customers.
After it gaining positive feedbacks, it inspired the owner to pursue this new product development
as a potential product offering in the market.

 Keys to Success
- Madge Café’s values inspire their employees in delivering quality service with their
employees.
- It has a market-oriented mission statement.
 - The story of pre-war recipe that has been passed down from generations to
generations makes it even more unique and interesting.
- People looks forward to visit the shop because of the comfort and ambiance it gives.
- Customers love the welcoming and friendly accommodation of the manager, himself.
- Patrons are given personalized mugs as a part of their loyalty program schemes.

 Critical Issues
Madge Café was quietly existing in the market for several years. The management were not
quite active in making use of the Internet that it depended on the public’s word of mouth. Now,
the company is taking advantage of such technologies for promotional purposes and gradually
gaining public awareness.
Furthermore, the management were also hesitant to branch out because they are too careful to
preserve their family recipe and keep the legacy of brewing coffee. And when they do branch
out, they would have to train and find baristas that have the “pulse” to do the brewing process.
However, it is good to note that when the management took this risky move which pave a way
for the café to increase its market share and growth.
Another issue was use of instant coffee powder as a substitute to coffee beans and “dirty
socks” while brewing coffee. The manager himself guarantees that this is a wrong information
because they make sure that cleanliness is being maintained at their workstation. The café uses
clean flannel cloth or “katsa” to filter its brewed coffee. Also, the café refrains from using instant
coffee powder because such would not substitute to the taste of a freshly brewed coffee beans
which could ruin the quality of the product offered.
Lastly, Madge Café had also been stereotyped as another “karinderia” inside La Paz market
because of its appearance. Thus, Madge Café would need to be creative a little more and
renovate some areas of the site to achieve that extraordinary coffee shop “look”.

Marketing Strategy
 Statements
 Mission
Madge Café adheres to a commitment of “bringing warmth and timeless conversations in a
cup”.
  Vision
Madge Café envisions “to be renowned as one of the leading native coffee brewer in the
country by providing excellent customer services and building strong customer
relationship.”
 Values

o MANAGE
o AMIABLENESS
o DELIGHT
o GRATEFULNESS
o ENTHUSIASM

 Marketing Objectives
o To provide high quality products to its customers
o To offer employment opportunities
o To increase 5% market share by 2018
o Launch at least five (5) new products in 2018 and 2019
o Open two (2) more branches in Iloilo or other parts of Western Visayas within
five (5) years
o Enhance more customer relationships
o Achieve at least 95% customer service rating each month
o To improve appearance of the coffee shop to provide convenience and
comfort to customers

 Financial Objectives
o To have a 5% increase in annual revenue
o To become a zero-debt coffee shop
o To improve operations and decrease overhead costs by at least 5% in 2018
 o Be financially stable in five (5) years’ time

 Target Markets
Generally, Madge Café caters to all types of customers in different reasons. They do value
everyone who visits their humble business dwellings. To narrow it down, the café targets to
serve working individuals, college students, shoppers and tourists. This is based on the
demographics of a population from 12-60+ years old, single or married individuals.
 Positioning
Madge Café will position itself as a local café that offers high quality products and customer-
oriented services at a reasonable prices. Madge Café’s positioning will leverage their competitive
edge through
(a) Nurturing bonds between customers, suppliers, employees and co-owners to build trust
and strong relationships
(b) Maintaining cleanliness and provide a relaxing atmosphere that fosters lively
communication among customers
(c) Invest on pro-active promotional activities
(d) Brewing coffee traditionally which is unique, at the same time, innovate preferences from
healthy products at affordable price.

 Marketing Mix and Strategies

Mix (4P’s) La Paz Market Diversion Road and Atria, Smallville
Value Added Pricing Strategy
- the setting of a product or service's price Value Added Pricing Strategy
based on the benefits it provides to - the setting of a product or service's price
consumers. (Investopedia) based on the benefits it provides to
Price It will be a great opportunity for the café to consumers. (Investopedia)
-reasonable adjust its prices reasonably that it will not be It will be a great opportunity for the café to
set too cheap. Customers may conclude that adjust its prices reasonably that it will not be
such products were cheaper because of its set too cheap. Customers may conclude that
low quality. This pricing strategy will also such products were cheaper because of its
boost profits. low quality. This pricing strategy will also
 boost profits.
However, such will be priced a little lower However, such will be priced a little higher
than prices in Atria since operational costs than prices in La Paz market since
incurred in this area are lesser. Also, most operational costs incurred in this area are
customers that come here are frequent higher. Also, this area seems to attract
shoppers and working individuals. working individuals, college students,
shoppers and tourists.
Allow for discounts for customers celebrating their birth month and during Christmas
season and special occasions like graduation days, valentine’s day, etc.
Renovate some areas of the café like the
workstation, countertops, make the entrance
more appealing to the eyes
Some people say it is like a “karinderia
type”. Maintaining the ambiance of the café since
Maybe it because frequent shoppers and it already had its modern touch
working individuals usually stop by this
area. Tourists and college students rarely Usually, working individuals, college
visit the place. students, shoppers and tourists are found in
(i). Shoppers would feel the need to energize this area. It is accessible for them to meet up
Place
themselves with a light breakfast or lunch or because the place is open until evening
-ease of
just have a freshly brewed coffee before (7AM – 9PM). Customers will no longer
convenience
and/or after doing some groceries. endure traffic and its noise to have a cup at
(ii). Working individuals come here to feel La Paz market.
at ease, and relaxed. Many prominent
politicians, doctors, attorneys, and the like
come here to catch up and discuss anything
they want to talk about even when they just
meet there, regardless of their social status.
It is a venue for them to be comfortable as
they are since everyone is treated alike.
Develop an official website where customers can order on online.
 This is to cater some busy customers and have their products available anytime. Such
customer will never have to depend on their instant coffee anymore.
Enable Wi-fi access.
Because of targeting a specific market, the management should also consider this
customers’ needs. Its target market can really benefit from this convenience.
Add more products offered in other Ensure availability of products listed on its
branches of Madge menu and implement quality controls on
Manage and maintain customer – oriented preparing them
services Manage customer – oriented services
Products and Ensure that high quality ingredients will be used on their final products offered
services Continuous product innovation
- solutions (A) Use of green coffee beans as another type of blend
(B) Creamy Popsicles
Use of technology that is somewhat to similar ways of brewing
coffee (a more neat workstation)- Wood Neck Drip Pot
- It is a modern version of brewing coffee using the kettle, flannel cloth and
strainer. It makes the workstation easier clean and maintain.
Create brand awareness and corporate identity
- Re-design a unique corporate logo
- Place adverts on both print and electronic media platforms
- Be open to be featured in TV programs as much as possible
- Ensure that employees wear their uniforms with printed logo of the company
Promotion - Have tarpaulins printed with the company’s logo and contacts in strategic
-active positions
communication - Sponsor relevant community based programs
- Advertise on bill boards at strategic locations
- Distribute our fliers and handbills in areas like airports, malls, etc. from time to
time
- Online Marketing Strategies
*Leverage on the internet and social media platforms like; Instagram,
Facebook ,Twitter, LinkedIn, Badoo, Snap Chat, Google+ (blogs, travel sites
 like tripadvisor..) and other platforms
*Publish website to promote the business and allow for customers to order
online
Increase Customer Retention and Brand Loyalty
- Give freebies on special occasions and allow for loyalty programs for regular
customers
- Sponsor or organize events on special seasons like valentine’s day, mother’s day
and the like
- Encourage the use of word of mouth especially from loyal customers

Financial Projections
This section will offer a financial overview of the Café’s projected profits for a next year as it
relates to the marketing activities.

Other Branches
Projections La Paz (40:60)
2,11 3,450,00
Net sales for the year 5,000.00 0.00
- -
Cost of Goods sold (40% of NS) 846,000.00 1,380,000.00
1,26 2,070,00
Gross Profit 9,000.00 0.00
Operating Expenses
24 960,0
Rent Expense - building 0,000.00 00.00
100,0
Salaries & Wages 74,000.00 00.00
258,0
Insurance 50,000.00 00.00
10 345,0
Advertising (5%:10% NS) 5,750.00 00.00
276,0
Selling Expenses (4%:8% NS) 84,600.00 00.00
328,0
Utilities Expenses 88,000.00 00.00
12 240,0
Professional Services 0,000.00 00.00
180,0
Taxes and Licenses 90,000.00 00.00
Supplies 80,0
 30,000.00 00.00
125,0
Repairs & Maintenance 55,000.00 00.00
- -
Sub-Total 937,350.00 2,892,000.00
33 -
Net Profit 1,650.00 822,000.00

Controls
 Implementation
 Milestones        

End
ADVERTISING Start Date Budget Manager
Date

CPU
Marketing plan completion 07/25/17 11/30/17 P0
Students

Advertising 10/15/17 11/06/17 P 150,000.00 JOHN

Strategic relationships 10/11/17 12/30/17 P 8,000.00 PETER

Printed promotion 11/17/17 12/30/17 P 100,000.00 SAMUEL

Website development 11/06/17 11/28/17 P 50,000.00 LUKE

On-line promotion 11/06/17 11/28/17 P50,000.00 CATHY

Others P 30,000.00 PETER

Total Advertising Budget     P 388,000.00  

End
RENOVATIONS Start Date Budget Manager
Date

La Paz Market 11/30/17 12/15/17 P 50,000.00 PETER

Diversion Road 11/30/17 12/18/17 P 20,000.00 JOHN

Atria 11/30/17 12/20/17 P 30,000.00 ABEGAIL

 Total Renovations Budget     P100,000.00  

End
BRANCH OUT Start Date Budget Manager
Date

Construction 01/15/18 06/19/18 P 880,000.00 PETER

Facilities 04/22/18 07/23/17 P 350,000.00 PETER

Others P200,000.00 PETER

Total Branching out Budget     P1,430,000.00  

PRODUCT End
Start Date Budget Manager
DEVELOPMENT Date

New Product Development 11/30/17 12/11/17 P 250,000.00 PETER

Packaging Re-design 11/25/17 12/19/17 P200,000.00 PETER

Others P50,000.00

Total Product Development

P 500,000.00
Budget

End
OTHERS Start Date Budget Manager
Date

Other 01/31/18 12/31/18 P 1,000,000.00 PETER

Total Other Budget     P 1,000,000.00  

Totals     P 3,418,000.00  

 Contingency Planning
o Problems generating visibility and awareness of the Madge Café
 o Increasing competition in coffee business industry
o Changing customer preferences and wild customers’ tastes

Worst case risks may include:

o Determining that the business cannot support itself on an ongoing basis
o Insufficient available funds
o Poor product development ideas

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