Opening A Cafe In Moscow Russia Marketing Essay

Opening A Cafe In capital of the Russian Federation Russia grocery storeing EssayWe atomic function 18 a newly established company in food and drink industry. We plan to image out up our stolon caf shop in a channel argona in Moscow, Russia. We want to differentiate ourselves from our competitors by providing full(prenominal) harvesting quality and high service quality. Our caf shop is not only a displace for tribe to enjoy life but also a suitable place to work.Russia is a very different in culture (Euro-Asia) comparing to former(a) western countries. It changes so quickly that we consider to work deeply on our marting plan to adapt to this fast changing market.2. Market Analysis2.1. The Market of RussiaRussia is the worlds largest country in terms of bea, str etc.ing from the Baltic to the Pacific across 10 time zones, with an estimated population of 144 million.Russia is one of the fastest erecting uphill markets at present with a GDP moment of 7 percent in 2008. Revenue from crude oil and natural gas exports and strong national demand are contributing to a booming economy, making it the bright spot in an otherwise challenging region.Russia ranked third, in A.T. Kearneys Global sell Development Index 2008, which qualifies it as one of the most attractive retail markets for international investors. Robust income growth, a passinguction in unemployment, consistent government indemnity and a rapidly increasing middle class offer optimistic expectations for the future developing of retailing in Russia.2.2.The Market of Moscowwhere we want to tick off up our first cafMoscow is the capital and the largest city of the Russian Federation. It is also the largest city in Europe, with the Moscow metropolitan ranking among the largest urban areas in the world. Moscow is a major political, economic, cultural, religious, financial, educational, and transportation centre of Russia and the world.2.2.1. PopulationAccording to the 2002 Census the popula tion of the Moscow was 10,382,754, however, this figure only take holds into account legal residents. Substantial add up of internal migrants mean that Moscows population is still increasing.2.2.2. EconomyMoscow is a major economic centre and is home to the largest number of billionaires in the world, which is the reason why we choose Moscow to start our Caf chain course in advance expand to other cities of Russia.Since a signifi put upt portion of Russias profits and development is concent pass judgmentd in Moscow as many multi-national corporations have branches and offices in the city, we may start out whether to target this segment of white-collar working class by providing a fussy quieter area in our drinking drinking chocolate shop especially for them, with Wi-Fi free of charge, making them feel that our coffee shop is a suitable place to work part enjoying their coffee break.2.2.3. CrimeHowever, firearm the overall stability has betterd in the recent years, crime c ontinues to remain a problem hindering business development. Pick-pocketing is back up in Moscow, as well as burglary from vehicles. Organized crime in Moscow and Russia in general, has often been involved with drug trafficking, cyber crime, prostitution, and financial crimes.Thus, we have to consider the security level when we are selecting the location of our coffee shop(s), not only for the safety of our shop itself, but for the safety of our employees and our guests.2.2.4. TransportationAirThere are five primary commercial airports serving Moscow Sheremetyevo International Airport, Domodedovo International Airport, Bykovo Airport, Ostafievo International Airport and Vnukovo International Airport.We may consider whether we open a coffee shop inside the Sheremetyevo International Airport or/and the Domodedovo International Airport, as Sheremetyevo International Airport is the most common entry point for foreign passengers, use 60% of all international flights, while Domodedovo International Airport is the leaveing airport in Russia in terms of passenger throughput, and is the primary gateway to long-haul domestic help and CIS destinations and its international traffic rivals Sheremetyevos.MetroLocal transport includes the Moscow Metro, a metro system famous for its art, murals, mosaics, and ornate chandeliers. Today, the Moscow Metro contains twelve lines, broadly speaking underground with a total of 177 stations. The Moscow Metro is one of worlds busiest metro systems, serving more than nine million passengers daily.Again, when selecting the location of our coffee shop, we have to take into account the transportation factor. We must choose a place where it is not only easy to recognize but also convenient to arrive at.2.2.5. profit UserInternet penetration is lower than in Western countries, although it is developing at a fast pace in Russia, and is currently at 30.2%. The number of internet users has risen from just 220,000 in 1995 to 42,936,000 user s in 2007. Service providers are expanding beyond their traditional markets in Moscow and St. Petersburg into Russias regions. Although still low at close to 38%, PC penetration improved rapidly from less than 1% in 1990. Continued growth in the home ownership of PCs will vertebral column further development in the number of internet users as PC ownership and internet development are closely linked.Possession of PC and growth of internet users 2002-2007Source Euromonitor International from national statistics/ITU3. Industrial Analysis3.1. Foodservice Industry in RussiaCafs and restaurants account for 37.3% of the industrys cling to in 2007.3.1.1. Market Value bespeakThe compound annual growth rate of the industry in the period 2007-2012 is predicted to be 5.1%.3.1.2. Market Volume ForecastThe compound annual growth rate of the industry volume in the period 2007-2012 is predicted to be 0.3%.From the above data, we can see that the market volume for the next 5 years is expected to grow s afternoon teadily but low in growth rate, In 2012, the Russian foodservice industry is forecast to have a volume of 5,112.1 million transactions, an increase of 1.7% since 2007, while the market value during this period will enjoy a healthy growth. In 2012, it is forecast to have a value of $6.5 billion (165.6RUR billion), an increase of 28.3% since 2007. That is to say, the market will be in a trend with low volume of transactions but can generate high value. This information will lead us to differentiate our caf shop from other common coffee shops by providing high quality of products and service with comparatively higher prices.3.2. Hot Drinks Industry in RussiaCoffee sales proved the most lucrative for the Russian red-hot drinks market in 2007, generating total revenues of $2.5 billion, equivalent to 64.1% of the markets overall value. In comparison, sales of tea generated revenues of $1.3 billion in 2007, equating to 33.5% of the markets aggregate revenues.3.2.1. Mark et Value ForecastThe compound annual growth rate of the market in the period 2007-2012 is predicted to be 2.2%.3.2.2. Market Volume ForecastThe compound annual growth rate of the market volume in the period 2007-2012 is predicted to be 0.9%.In 2012, the Russian hot drinks market is forecast to have a value of $4.3 billion, an increase of 11.3% since 2007, and a volume of 285.8 million kg, an increase of 4.7% since 2007.Again, the above data justifies our decision of entering Russia market, as coffee still remains the most popular and important hot drinks among Russians.Buyer PowerSelf-realized muscovite battalion with high consumption potential automatic group of people buying compulsivelyNeeds and wants change very quickly3.3.Porter five forcesIndirect CompetitorsRetail stores and mallsNew PlayersNew large groups same(p) Starbuck chain look at enter the marketLong time to enter the market because of barrier of laws and governmentNumber of new players already in the marketFoodserv ice Industry RussiaNumber of new companies, choice offered to the customer soaringer growth in value than in volumeDifferentiation in product quality and visibilityBrand building is chance on for this market very competitive marketServices alliances (suppliers)Necessity to make alliances with suppliers to surviveImportance of having unassailable quality food at low priceSourceDataMonitor Published September 2008)3.4. SWOT analysisSTRENGTHSWEAKNESSESStrong market growthPurchasing high quality raw materials give us a competitive advantageBeing able to adapt our product and business model to the market need and wants customer changesStrong market study to verify our assumptions on the field and later on adaptation through regular surveysStrong operation attend toAlliances with suppliersStaying aware of the different cultures that exist in MoscowStrong values in accordance with customers own values (e.g. on quality respect)Time to carry out the structure due to our lack of market k nowledgeSeasoned industry (week-end and days off for holidays because of business area)High cost for commodities (high level of equipment required)Build a partnership with business partners can be long and not solid enoughLack of stability of human resourcesOPPORTUNITIESTHREATSTaking into account the market changesHigh capacity for adaptationHaving a leading strategy In Moscow will put us one step ahead from competitors, is a key factor to create a new trendCreate a team spirit in the company that keep Faithful the human resources organization regulationCompetitors the desires of Starbuck Coffee with a financial advantageMarket demand difficult to evaluate4. StrategiesOur strategy is a market penetration strategy, centre r apieceing a new customer market niche.Current productsNew productsCurrentMarketsMarket penetrationStrategyProduct-developmentStrategyNewMarketsMarket developmentStrategyDiversificationStrategySource Strategies for diversification by Igor AnsoffOur approach is to enhance relationships with our customers, the self-realized people that it corresponds to old people with a high consumption potential.4.1. Objectives (a 5-year Plan) investment 100,000 euros for the first caf shopTimetableTimeactionsresultsT0 +6 months market studyT0 + 12 monthsPreparation for the establishment of our first caf in MoscowGet everything done before operation (place, suppliers, HR, etc)T0+30 months (to be consolidated) (Breakeven point) (estimated after 18 months of operation)operation of our first Caf shop and consolidationAt least to reach breakevenT0+36 monthsFind investors and set to open the second caf shopOpen the second caf in the same cityT0+ 60 monthsFind investors and prepare to open more caf shop cast off more caf shops in other cities in RussiaQuantifiableAverage number of customer per dayNumber of days of operation per year (5 days / week) replete(p) sales per yearEstimated profit after 2 years of operation (5%)300 400250 days500,000 euros25000 euros per yearAchievableWe think that our objectives are accomplishable and this lowest estimate will be consolidated.4.2. segmentation/TargetingTo be useful, market segments must rate favorably on five keys criteriaIt has to be measurable, substantial, accessible, differentiable and actionable. (Source Kotler Keller Marketing management second edition)The segment, we have chosen for this marketing plan complies with those criteria.Our target is the Self realized groups of CustomersWhat are their characteristics?Self-realized group is middle-aged people with a higher proportion of women. They have a high consumption potential. Their values go to life quality and healthcare.On the opposite of innovators group or spontaneous ones, they dont like advertisement. They want to make their own choice based on the facts they have access.What are our assumptions regarding to the benefits this type of customers want to find when entering in our Caf?The list of characteristics we need to measure th anks to a marketing survey before applying to our Caf are the followings.Quality 1stQuick to getComfortable when having more timeSegmentationCustomer typeBenefitsInnovatorsSpontaneousAmbitiousSelf-realizedSettledTraditionalistsThriftyHigh quality drinks/food3151526High quality service4262616Relaxing area2544245Nice working area (with wi-fi)6613465Nice place to meet people1326154Takeaway/Phone order delivery service5435334SegmentBACACDDTargetingWe want to target segment A which include Spontaneous and self-realized people. The second largest group, the Spontaneous, is dominated by men and singles, and they often buy goods impulsively. The Self-realised are middle-aged people, with a higher proportion of women, and a high consumption potential. This important group tends to be irritated by advertising, valuing quality and pays attention to healthcare.Explanation of the customer types in segmentationRegion-Media, specialists in Russian advertising, have conveniently identified seven t ypes of consumers in this market. The growing group of Innovators are mainly based in Moscow, prefer to spend their free time involved in sports activities and active leisure and eat out in restaurants featuring exotic cuisine. The second largest group, the Spontaneous, is dominated by men and singles, and they often buy goods impulsively. The cluster of the Ambitious is smaller, and relies on advertising when looking for a product. The Self-realized are middle-aged people, with a higher proportion of women, and a high consumption potential. This important group tends to be irritated by advertising, valuing quality and pays attention to healthcare. The largest group are the Settled (25% of consumers in Russia and 21% in Moscow), a rather traditional group with great brand affinity innovations barely interest them. The Traditionalists pack a low consumer potential, as half of them are retired and loyal to retail outlets that have survived since Soviet times. The last and smallest clu ster, Thrifty, mainly shops in discount shops.(Source www.euromonitor.com Top 10 consumer trends in Russia)4.3. PositioningTo convince customers of our targeted segment that coming in our caf will offer the benefits they need.To spontaneous and self-realized people in Moscow that our caf shop is a nice place for both working and relaxation, because it offers products and services in high quality, free wi-fi access, takeaway/ phone order delivery services,4.4. Designing the Offer ( Marketing Mix)4.4.1. ProductsWe offer high quality drinks and healthy food with first rate raw material.For us, products must be natural and wise.ExamplesCoffeeThe basic offer contains, cappuccino, latte and espressos made with grains from different countries as Brazil, Italia, Colombia or Kenya.ChocolateOur chromatic Chocolate is a creation with cold chocolate, whipped cream and a drizzle of hot caramel syrup.The Canadian chocolate is made with dark chocolate and cranberries. tea leafOur basic offer i s represented by international flavour as Green tea and white tea from japan and China and yellow tea, a very rare and delicate liquify from China. The last one is Ceylon tea, a benighted tea from Sri Lanka.We also offer flavoured teas as Jasmine tea from India, a faction of green tea and oxidized jasmine flowers. The Mint tea from Morocco is Gunpowder tea in which is added, during the infusion, fresh mint leaves and sugar. And finally, Earl Grey tea that is a tea blend with a distinctive flavour and aroma derived from the addition of oil extracted from the rind of the bergamot orange, a fragrant citrus fruit.Our Cafe MenuCOFFEECHOCOLATEEspressoThe essence of coffee extracted into a concentrated one ounce beverageEspresso MacchiatoA shot of espresso marked with a dollop of foamed milkTraditional CappuccinoEspresso combines with a velvety milk foam._ 1/3 espresso_ 1/3 steamed milk_ 1/3 frothed milkMochaEspresso with foamed milk with chocolate syrup or powder addedLatteEspresso co mbines with steamed milk, transcend with a small amount of milk foam._ 1/3 espresso_ 2/3 milkAmericanoEspresso diluted (after brewing) with an equal portion of hot waterLatte ArtLatte RosettaHot ChocolateMexican ChocolateCanadian chocolateCaramel ChocolateTEABushells, Earl Grey, English Breakfast, Irish Breakfast, Vanilla, pivotal Fire.Herbal Teas Red Zinger, Chamomile, Lemon, PeppermintCeylon tea a black tea from Sri LankaGreen tea yellow tea from ChinaWhite tea from JapanJasmine tea from IndiaMint tea from MoroccoSOUPTomato Dill dopeCreamy tomato soup with chunks of sweet tomato. stand out with sour cream.Chicken Tortilla SoupSteamy cowardly broth loaded with smoked chicken, jack and cheddar cheese cheeses, tortilla strips and scallions.Potato Cheese SoupRich and creamy potato soup topped with jack and cheddar cheeses, bacon and scallions.Hot borchtch ()Traditional Russians soups made with beetroot, beans, cabbage, carrots and beef with thick dark bread.Butternut Squash a nd Sage SoupOlive oil, onion, squashes, fresh sage, chicken broth , salt and freshly ground black pepperShrimp and Basil BisqueUnsalted butter, onion , carrots , celery , bay leaf, long-grain rice, chopped tomatoes, basil leaves, reasoned cream, salt and freshly ground black pepperWhite Bean and Rosemary Soup with Roasted Garlic CroutonsUnsalted butter, olive oil, onion, carrots, celery, vegetable broth, fresh rosemaryCreamy Potato Soup with Sour Cream, Bacon and ChivesBacon, onion, garlic, potatoes, chicken broth, salt and freshly ground black pepper , sour cream, Cheddar cheese ,chivesWintertime Tomato Soup with Grilled Cheese CroutonsOlive oil, celery, carrot, tomatoes, crushed tomatoes, tomato paste, vegetable broth, bay leaf, cream salt and freshly ground black pepperStracciatella (Italian Egg Drop Soup)Chicken broth, eggs, grated Parmesan cheese, plus more for garnish, semolina flour, spinach, parsley, nutmeg, salt and freshly ground black pepperMushroom Solyanka cabbage with vinegar, tomatoes, and cucumber pickles, with puny brine, mushrooms, onions, lemon skin.SALADHouse SaladMixed field greens with hearts of palm, red cabbage carrots. Served with your choice of a Candle dressing.Classic CaesarRomaine lettuce with herbed croutons in a creamy caesar dressing and sprinkled with toasted dulse.Chicken SaladMixed leaves, chicken pieces, cucumber, tomato, corn, boiled egg and dijon mustard dressingSoba Noodle SaladSoba Noodles, ginger grilled tofu, shiitake mushrooms, edamame, julienne vegetable carrots, radish andsesame seeds over mesclun with a creamy wasabi dressing.Roasted Pear SaladArugula, roasted pears, shaved fennel, cashew-tofu cheese and toasted walnuts. Served with a cranberry vinaigrette dressing.Aztec SaladBi-color quinoa, black beans, red onions jicama topped with spiced pumpkin seeds and barbequed grilled tempeh. served over interracial field greens with a toasted cumin vinaigrette.Buffalo Chicken SaladFried chicken tossed with spirited Buffalo sauce and served over a bed of obscure greens with Bleu Cheese crumbles, mushrooms, tomatoes and eggs. Best with Bleu Cheese dressing.California Bleu Salad cherubic mixed greens topped with Bleu Cheese crumbles, gamey sugared walnuts and fresh strawberries. Served with Bleu Cheese toast. Best with Sweet Balsamic Vinaigrette dressing.Hawaiian Chicken Shrimp SaladA skewer of spicy grilled shrimp and tender diced chicken tossed in a sesame marinade. Served atop fresh mixed greens with tomatoes, sweet pineapple chunks, walnuts and toasted coconut. Best with Asian Sesame dressing.Monterey Chicken SaladHerb seasoned or Cajun-style chicken atop fresh mixed greens with bacon and egg, tomatoes, jack and cheddar cheeses. Best with Honey Mustard dressing.Spinach Goat Cheese SaladLeaf spinach, red onions, mushrooms, bacon and egg with goat cheese, topped with spicy sugared walnuts. Best with our Hot Bacon Vinaigrette.Asian Sesame SaladDiced fried chicken tossed in our sesame marina de over mixed greens, red onions, tomatoes and mandarin oranges. Topped with Asian noodles. Best with Asian Sesame dressing.Smoked Chicken Cobb SaladSmoked chicken atop mixed greens with tomatoes, black olives, red onions, jack and cheddar cheeses and crumbled bacon. Best with Ranch dressing.Provence SaladChicken, ham, corn, peppers, cheese, cucumber, tomato, egg, mixed salad with a whole grain mustard and herbs de Provence dressingNordic SaladSmoked salmon from Norway, egg, salad, sorrel, chives and raspberry vinegar crenature Caviar SaladFresh scallops, sevrugas caviar, endive, cider vinegar and saffronSMOOTHIES and HEALTH DRINKSOrange, Banana or Berry SmoothieMilkshakesBanana, Strawberry, Mango and Kiwi with pieces of white and dark chocolate on the top.Vitamin PowerStrawberries, kiwifruit, yoghurt, soy milk, wheat germ and honey (high in vitamins)Pick Me UpBanana, pineapple juice, coconut milk, yoghurt, honey, wheat germ and ice (energy booster)San Pellegrino calm down or spark ling waterFreshly Squeezed OrangeApple or Cranberry juiceGlass of MilkDESSERTSCarrot streakDecadent Chocolate CakeDaily Cheese cakeSweet Potato PieSeasonal Fruit Crumb PieChocolate Mousse Pie( For the detailed price, we have to consolidate it during the first 6 months of detailed marketing study)4.4.2. ServicesOur employees are well trained waiters and waitresses. They will always welcome customers with warm smile and serve you in a very polite manner.We also offer takeaway or phone order services for people in a hurry. We just want to provide as much convenience as possible to meet our customers needs.4.4.3. PriceAccording to our marketing research, the average cost for drinks is around 100RUB (3euros), desserts for 100RUB (3euros), a good meal be about 400RUB (12euros) for one person, etc. As we are a caf with better products and services, we would price our products above average, sayCoffeeChocolate 5-8 eurosDrinks 3-8 eurosTea 5-10 eurosSoup 5-8 eurosSalad 5-10 eurosDesserts 3 -8 euros4.4.4. Place (distribution)We plan to find a place near the business area because our main target is business people who care about quality of the products and services.In our future planning, we would like to develop our caf business in Russia through franchising after we have established the model of our caf brand, of course, this idea should be based on the good operation result of our first caf shop.4.4.5. PromotionsAs we are a totally new coffee shop shop in Moscow, it is very necessary to use effective ways to make us known to Moscow people. We plan to use the following methods to promote ourselvesAdvertisingAdvertise our cafe shop on magazines such as business magazines, food magazines, etc. and newspapersAdvertise our cafe through radio, so that Moscow people can get the information during breakfast time, driving a car, etc. We do not plan to do advertisement, for it is too expensive for us, however, radio ads is a comparatively cheaper way.Showing billboard-type ad s in business areasUsing transit ads on buses, subways and commuter trainsInternet MarketingWe decide to build up our own website in order to provide as much information as we can to attract more customers.Sales PromotionEstablish customer management system. Offer a fidelity card for customers when reaches a certain amount of consumption. And each time they consume in our coffee shop, they earn points into his card. The earned points can be used as cash to pay for the products they buy in our cafe shop.Offer coupons occasionallyOffer free goods according to different national holidays (eg. Valentines Day Christmas, etc.5. Action PlanResearch has shown thatRelationship Marketing is the current process of identifying and creating value with individual customers and then sharing the benefits from this over a lifetime association. It involves Understanding, focusing and management of ongoing collaborationBetween suppliers and selected customersFor mutual value creation and sharingThrou gh interdependence and organizational alignment.(From Gordon, Relationship Marketing, pg9.)To implement our strategy with this approach we need to focus on customer benefits on a long time scale basis.The action plan has been established using this approach.WhatObjectivesBenefitWhenWho/LeadTeam organizationOrganize the whole team. What are the objectives, the milestones, people in chargeProject Manager (PM)Align the project strategy with the business customer expectationsBe align on a same set of objectivesGoing the same way.PMProject LaunchStart the new project and let it knowProject team/PMDescribing the process and the people involvedBe aware of the advantages each one has to forecast and organize in advance. Understand the constraints and possibilities offered by the process.By knowing who is doing what and for which purpose, people can improve the whole processTaking into account the customer surveyDesigning the offer, adapt the menuAdapt to the consumer requirementsDesigning t he offer