The Daily Perc

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Coffee Kiosk Business Plan

Strategy and Implementation Summary

The Daily Perc will penetrate the commuter and captive consumer markets by deploying Drive-thru facilities and Mobile Cafes in the most logical and accessible locations. The Drive-thrus are designed to handle two-sided traffic and dispense customer-designed, specially ordered cups of specialty beverages in less time than required for a visit to the locally owned cafe or one of the national chains.

The Daily Perc has identified its market as busy, mobile people whose time is already at a premium, but desire a refreshing, high quality beverage or baked item while commuting to or from work or school.

In addition to providing a quality product and an extensive menu of delicious items, to ensure customer awareness and loyalty, as well as positive public and media support, The Daily Perc could be donating up to 7.5% of revenue from each cup sold in individual Drive-thrus to the charities of the customers' choice.

5.1 Strategy Pyramid

The Daily Perc's strategy is to show people that TDP has an excellent product, convenient accessibility, and with a community benefit. To execute on this strategy, TDP is placing the Drive-thrus and Mobile Cafes at easily accessible locations throughout the metropolitan area. TDP is pricing its product competitively and training the production staff to be among the best Baristas in the country. Then, through coupons and display ads at the locations, TDP will involve the customers in community support efforts by explaining that a portion of their purchase price will be donated to a charity of their choosing.

In so doing, TDP has:

  1. Provided a customer with a quality product at a competitive price.
  2. Provided the customer with a more convenient method for obtaining their desired product.
  3. Demonstrated how TDP appreciates their loyalty and patronage by donating money to their personal cause.

5.2 Value Proposition

The Drive-thru facilities provide a substantial value proposition in that the customer does not have to find a parking place, exit the vehicle, stand in line to order, wait for the beverages ahead of him to be produced, pay a premium price for average product, find a place to sit, clean up the previous patron's mess, then enjoy their coffee ... assuming they have sufficient time to linger over the cup.

The Daily Perc concept is that the customer drives up, places the order, receives a high quality product at a competitive price, and drives away, having wasted little time in the process.

The Daily Perc is also providing a significant community value to patronizing TDP. For every purchase a customer makes from us, TDP will donate up to 7.5% of the sale to the local charity selected by the customer.

5.3 Competitive Edge

The Daily Perc's competitive edge is simple. TDP provides a high quality product at a competitive price in a Drive-thru environment that saves time.

5.4 Marketing Strategy

First and foremost, The Daily Perc will be placing its Drive-thru facilities in locations of very high visibility and great ease of access. They will be located on high traffic commuter routes and close to shopping facilities in order to catch customers going to or from work, or while they are out for lunch, or on a shopping expedition. The Drive-thrus are very unique and eye-catching, which will be a branding feature of its own.

The Daily Perc will be implementing a low cost advertising/promotion campaign which could involve drive-time radio, but not much more.

The Daily Perc will rely on building relationships with schools, charities and corporations to provide significant free publicity because of its community support program. By giving charitable contributions to these institutions, they will get the word out to their students/faculty/employees/partners about TDP. Word of mouth has always proven to be the greatest advertising program a company can instill. In addition, the media will be more than willing to promote the charitable aspects of TDP and provide the opportunity for more exposure every time TDP writes a check to another organization.

5.4.1 Promotion Strategy

The long-range goal is to gain enough visibility to leverage the product line into other regions and generate inquiries from potential inventors. To do that, The Daily Perc needs:

  • Public relations services at $1,000 per month for the next year intended to generate awareness of editors and product information insertions, reviews, etc. It is anticipated that the school fundraising program will generate a fair amount of publicity on its own and will, perhaps, minimize--or even eliminate--the need for a publicist.

  • Advertising at $1,000 per month concentrating on drive time radio. The Daily Perc will experiment with different stations, keeping careful track of results. As with the school fundraising program, TDP expects the facilities and signage to be a substantial portion of our advertising. However, in the start-up phase, TDP needs to let people know where to look for the facilities.

5.4.2 Distribution Strategy

The Daily Perc will locate Drive-thru facilities in high traffic areas of the city where it knows working commuters will be passing.

The Daily Perc will also make arrangements for the Mobile Cafes to be at as many schools, businesses, and events as possible every year, so that new customers, those who come in from areas where TDP may not have a Drive-thru facility, can be reached and those who didn't have the time to stop off that morning at their favorite Daily Perc.

5.4.3 Marketing Programs

Distinctive Logo:
"Papo" is a very happy and conspicuous sun. The sun is one of infinite mental pictures. The sun touches every human being every day. Obviously, TDP wants to touch every customer every day. That is why the use of the sun lends itself to being the corporate identifier. Papo is already an awarding winning logo. Papo won in the New Artist Category of the 2001 Not Just Another Art Director's Club (NJAADC).

Distinctive Buildings:
TDP is using diner style buildings for its Drive-thru facilities. TDP has worked closely with the manufacturer to make the building distinctive, so that it is easy to recognize, and functional.

The Fund-raising and Catering Trailer:
The Mobile Cafe will be a key marketing tool. The similarities between the Mobile Cafes and the Drive-thru facilities will be unmistakable. The exposure these units will provide cannot be measured in dollars. The Daily Perc will negotiate visits with the Mobile Units at schools, hospitals, corporations and other entities. In the case of schools and certain corporations, a portion of all sales made while on their campus could go to a program of their choice. The organization would promote its presence to their constituency and encourage them to frequent the Drive-thru establishments so that their charitable cause is nurtured. This will give those patrons an opportunity to taste the products and become a regular customer of the Drive-thru facilities. The Mobile Cafes will also be appearing at community events such as fairs, festivals, and other charitable events.

Advertising and Promotion:
In the first year, The Daily Perc plans to spend moderately on advertising and promotion, with the program beginning in September, after the opening of the first Drive-thru. This would not be considered a serious advertising budget for any business, but TDP feels the exposure will come from publicity and promotion, so most of the funds will be spent on a good publicist who will get the word out about the charitable contribution program and how it works in conjunction with the website. TDP also believes that word-of-mouth advertising and free beverage coupons will be better ways to drive people to the first and second locations.

In the second year, The Daily Perc is increasing the budget, since it will need to promote several locations, with particular emphasis on announcing these openings and all the other locations. TDP will continue to use publicity as a key component of the marketing program, since TDP could be contributing over $70,000 to local schools and charities.

In the third year, The Daily Perc will double its advertising and promotion budget, with the majority of the advertising budget being spent on drive time radio. As in the previous years, TDP will get substantial publicity from the donation of nearly $200,000 to local schools and charities.

5.4.4 Positioning Statement

For busy, mobile people whose time is already at a premium, but desire a refreshing, high quality beverage or baked item while commuting to or from work or school.

5.4.5 Pricing Strategy

The Daily Perc pricing will be comparable to the competition, but with the value-added feature of immediate, drive-thru service and convenience.

5.5 Sales Strategy

There will be several sales strategies put into place, including posting specials on high-profit items at the drive-up window. The Baristas will also hand out free drink coupons to those who have purchased a certain number of cups or something similar. TDP will also develop window sales techniques such as the Baristas asking if the customer would like a fresh-baked item with their coffee.

5.5.1 Sales Forecast

In the first year, The Daily Perc anticipates having two Drive-thru locations in operation. The first location will open in the third month of this plan and be fully operational beginning on the 1st day of September. The second Drive-thru will open six months later. TDP is building in a certain amount of ramp-up for each facility while commuters become familiar with its presence. The Drive-thrus will generate 288,000 tickets in the first year of operation.

In the second year, The Daily Perc will add two more Drive-thrus and, in the third year, TDP will add an additional nine Drive-thru facilities. The addition of these facilities will increase the revenue from Drive-thrus with a total of over 1,000,000 tickets in the second year and 2,675,000 tickets in the third.

In addition to the Drive-thrus, The Daily Perc will deploy one mobile unit in the fourth quarter of the first fiscal year. TDP expects  this mobile unit to generate 10,000 tickets each, at an average ticket price of $2.45.

In the second quarter of the second fiscal year, The Daily Perc will deploy a second and third mobile unit. TDP expects all three mobile units to generate 150,000 tickets in the second year. In the third fiscal year, with an additional fourth mobile unit deployed, TDP expects to see 264,000 mobile unit tickets.

The Daily Perc is also showing revenue from the commerce portion of our website, where it will sell "The Daily Perc" t-shirts, sweatshirts, insulated coffee mugs, pre-packaged coffee beans, and other premium items. TDP is not expecting this to be a significant profit center, but it is an integral part of the marketing plan -- as a function of developing our brand and building product awareness. TDP expects revenues from this portion, to begin in the second fiscal year, to reach as much as $3,000 per month in the third fiscal year.

Total first year unit sales should reach 298,402. The second year will see unit sales increase to 1,177,400. The third year, with the addition of such a significant number of outlets, we will see unit sales increase to 2,992,000.

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Drive-thru #1 202,913 300,000 325,000
Drive-thru #2 85,489 300,000 325,000
Drive-thru #3 0 275,000 325,000
Drive-thru #4 0 150,000 325,000
Drive-thru #5 0 0 300,000
Drive-thrus #6 & #7 0 0 450,000
Drive-thrus #8, #9, & #10 0 0 450,000
Drive-thrus #11, #12, & #13 0 0 225,000
Mobile Cafe #1 10,000 60,000 66,000
Mobile Cafe #2 0 45,000 66,000
Mobile Cafe #3 0 45,000 66,000
Mobile Cafe #4 0 0 66,000
Website Sales/Premium Items 0 2,400 3,000
Total Unit Sales 298,402 1,177,400 2,992,000
Unit Prices Year 1 Year 2 Year 3
Drive-thru #1 $1.85 $1.90 $1.95
Drive-thru #2 $1.85 $1.90 $1.95
Drive-thru #3 $0.00 $1.90 $1.95
Drive-thru #4 $0.00 $1.90 $1.95
Drive-thru #5 $0.00 $1.90 $1.95
Drive-thrus #6 & #7 $0.00 $1.90 $1.95
Drive-thrus #8, #9, & #10 $0.00 $1.90 $1.95
Drive-thrus #11, #12, & #13 $0.00 $1.90 $1.95
Mobile Cafe #1 $2.45 $2.50 $2.55
Mobile Cafe #2 $0.00 $2.50 $2.55
Mobile Cafe #3 $0.00 $2.50 $2.55
Mobile Cafe #4 $0.00 $2.50 $2.55
Website Sales/Premium Items $0.00 $11.00 $12.00
Drive-thru #1 $375,389 $570,000 $633,750
Drive-thru #2 $158,154 $570,000 $633,750
Drive-thru #3 $0 $522,500 $633,750
Drive-thru #4 $0 $285,000 $633,750
Drive-thru #5 $0 $0 $585,000
Drive-thrus #6 & #7 $0 $0 $877,500
Drive-thrus #8, #9, & #10 $0 $0 $877,500
Drive-thrus #11, #12, & #13 $0 $0 $438,750
Mobile Cafe #1 $24,500 $150,000 $168,300
Mobile Cafe #2 $0 $112,500 $168,300
Mobile Cafe #3 $0 $112,500 $168,300
Mobile Cafe #4 $0 $0 $168,300
Website Sales/Premium Items $0 $26,400 $36,000
Total Sales $558,043 $2,348,900 $6,022,950
Direct Unit Costs Year 1 Year 2 Year 3
Drive-thru #1 $0.64 $0.61 $0.59
Drive-thru #2 $0.64 $0.61 $0.59
Drive-thru #3 $0.00 $0.61 $0.59
Drive-thru #4 $0.00 $0.61 $0.59
Drive-thru #5 $0.00 $0.61 $0.59
Drive-thrus #6 & #7 $0.00 $0.61 $0.59
Drive-thrus #8, #9, & #10 $0.00 $0.61 $0.59
Drive-thrus #11, #12, & #13 $0.00 $0.61 $0.59
Mobile Cafe #1 $0.64 $0.61 $0.59
Mobile Cafe #2 $0.00 $0.61 $0.59
Mobile Cafe #3 $0.00 $0.61 $0.59
Mobile Cafe #4 $0.00 $0.61 $0.59
Website Sales/Premium Items $0.00 $6.50 $6.50
Direct Cost of Sales
Drive-thru #1 $129,864 $183,000 $191,750
Drive-thru #2 $54,713 $183,000 $191,750
Drive-thru #3 $0 $167,750 $191,750
Drive-thru #4 $0 $91,500 $191,750
Drive-thru #5 $0 $0 $177,000
Drive-thrus #6 & #7 $0 $0 $265,500
Drive-thrus #8, #9, & #10 $0 $0 $265,500
Drive-thrus #11, #12, & #13 $0 $0 $132,750
Mobile Cafe #1 $6,400 $36,600 $38,940
Mobile Cafe #2 $0 $27,450 $38,940
Mobile Cafe #3 $0 $27,450 $38,940
Mobile Cafe #4 $0 $0 $38,940
Website Sales/Premium Items $0 $15,600 $19,500
Subtotal Direct Cost of Sales $190,977 $732,350 $1,783,010

5.5.2 Sales Programs

Corporate Tasting Events - TDP plans to host tasting events for customers on a quarterly basis. Each quarter, at the introduction of each season, TDP will be adjusting its menu to reflect the changes in the flavors served.

Drink Coupons - At fundraising events for schools and corporate events, we will be giving away drink coupons as door prizes or awards. This encourages the person to come in for their free beverage and bring a friend or buy a baked item or a package of our premium coffee. The Drive Thru units will also be distributing coupons for special menu items or new product introductions.

Chamber of Commerce and Professional Memberships - Because of the need to sell the Mobile Cafe services, TDP will be an active participant in the Regional Chamber, local Chambers of Commerce, Food Service Associations, and Specialty Beverage Associations. The exposure and education that these organizations provide is outstanding, but equally important are the contacts and opportunities made available for deploying a Mobile Cafe--or even two--at a special event.

5.6 Strategic Alliances

The Daily Perc has and will continue to depend heavily on our alliance with PJ's Coffees, as well as our alliances with the Mobile Cafe and Drive-thru facility manufacturers and consumable products providers. However, we will always be looking for better quality products, more favorable pricing, or more timely delivery from other potential alliances.

We also consider the schools, non-profit organizations, and even corporations who host one of our Mobile Cafes as a strategic alliances, since they are providing exposure to our products and we are providing them a financial benefit.

5.7 Milestones

The Milestone table reflects critical dates for occupying headquarters, launching the first Drive-thru and subsequent Drive-thrus, as well as deployment of the mobile units. The Daily Perc also defines our break-even month, our website launch and subsequent visitor interaction function, and other key markers that will help us measure our success in time and accomplishment.

Milestone Start Date End Date Budget Manager Department
Light Website 6/1/2001 8/15/2001 $5,600 COO Mktg.
Open First Drive-thru 7/15/2001 8/31/2001 $105,400 COO Admin.
First Break-even Month 12/1/2001 12/31/2001 $0 COO Finance
Open Second Drive-thru 12/15/2001 2/1/2002 $105,400 COO Admin.
Receive First Mobile Unit 3/1/2002 3/30/2002 $86,450 COO Admin.
Launch Website Voting 5/1/2002 6/1/2002 $12,500 COO Mktg.
Open Third Drive-thru 4/15/2002 6/1/2002 $105,400 COO Admin.
Receive Second and Third Mobile Units 7/15/2002 9/1/2002 $172,900 COO Admin.
Open Fourth Drive-thru 12/15/2002 2/1/2003 $105,400 COO Admin.
Install Point-of-Sale System 12/1/2002 2/1/2003 $21,000 CIO MIS
Occupy Headquarters 4/1/2003 5/15/2003 $45,000 COO Admin.
Open Fifth Drive-thru 4/15/2003 6/1/2003 $105,400 COO Admin.
Receive Fourth Mobile Unit 4/15/2003 6/1/2003 $86,450 Equip. Admin.
Open Drive-thrus 6 and 7 7/15/2003 9/15/2003 $210,800 COO/Dir. Mgnt.
Open Drive-thrus 8, 9 and 10 10/15/2003 12/15/2003 $316,200 COO/Dir. Mgnt.
Open Drive-thrus 11, 12, and 13 1/15/2004 3/1/2004 $316,200 COO Admin.
Expand to Kansas City 1/15/2004 6/1/2004 $176,943 COO Mgnt.
Open First Franchise 10/31/2003 9/1/2004 $45,000 CFO Finance
Initiate Exit Strategy 10/1/2004 1/1/2005 $100,000 CFO Mgnt.
Totals $2,122,043