RUNNING HEAD: MANAGEMENT

Management Structure for The Connection
Author: Jane and John Doe
July 25, 2010
DeVry University Online Course #SBE440ON-A

Management Structure for The Connection

1) Company Description
Name of proposed business: “The Connection”
Name of founder: Jane Doe This business would be an internet café, open 24/7, that serves a wide range of breakfast entrees and dinner menus offering a variety of sandwiches, soups, salads and hot or cold non-alcoholic beverages. Free WiFi internet will be made available to our customers at specially designed tables where they can work while they eat. Our customers will also benefit from having printing, copying, scanning, and faxing capabilities; on-site technical assistance which will be available 24/7; and a conference room, complete with a computer networking system that would be available to small groups.

2) Industry Analysis
The two Internet Café’s now available in the Shreveport-Bossier area are only open for twelve hours each day, and only service areas near two of the major colleges. There is a need for additional Internet Café’s to service areas near the other three major colleges and to service customers (both college students and professionals) during early morning and late night hours.
While there are numerous fast-food places and motels/hotels that offer free internet with food or room purchase for those with their own laptops, they do not offer all of the other services and conveniences that will be offered by The Connection.
According to the most recent figures for NAICS 7222135 Coffee Shops, the national average yearly sales is approximately $533,973 per shop, and the annual payroll (for an average of 11 employees) is $137,105 per shop. (Economic Census, 2010) The Federal minimum wage (total cash and tips) for employees is $7.25 per hour. The minimum cash wage allowed is $2.13, with the remaining $5.12 as the maximum tip credit allowed. (Wage and Hour Division, 2010)

3) Marketing Plan
-Market Analysis and Target Market
The overall objective of The Connection is to provide a place where people can grab a bite to eat and, if they wish, use their wireless computers to conduct business, studies, or just socialize on the internet. To accomplish this objective, we plan to offer a menu of tasty entrees and non-alcoholic beverages, as well as free WiFi Internet and additional computer services such as printing, scanning, copying, and faxing to our paying customers. In addition, we will have one or more technical support persons available to help with these services and provide answers to questions our customers may have. Groups can rent a conference room with computer networking capabilities for business meetings. We will also offer classes for senior citizens wishing to learn more about using the internet to keep in touch with friends and relatives.
The target market for a Coffee House would be those people who are 16 years of age and over and fall into one of these categories:
- high school and college students, involved in socializing and studying alone or with friends.
- business professionals, for breakfast or lunch meetings or while on trips away from the office.
- retired persons, socializing with friends, or just enjoying time away from the house.
According to the national averages, people ages 25-54 have the highest incomes (after taxes), and spend the most on food away from home, and on audio/visual equipment and services. The next group would be those 55 and older, followed by those under 25 years of age. (See figure 1- Consumer Expenditures) [ (Labor, 2009) ] According to the population figures for Shreveport, Louisiana, there are roughly 146,345 people over the age of 16 that could fit into this target market. (See figure 2 - Shreveport, Louisiana Target Market) [ (Bureau, 2010) ]

Figure 1 - Consumer Expenditures Age Range | Average Income (after taxes) | Food Away From Home | A/V Equipment & Services | under 25 | $27,907 | $2,117 | $681 | 25-34 | $58,809 | $2,836 | $1,105 | 35-44 | $75,677 | $3,340 | $1,168 | 45-54 | $78,537 | $3,244 | $1,174 | 55-64 | $69,009 | $2,646 | $1,113 | 65 and older | $38,841 | $1,617 | $763 |

Figure 2 - Shreveport, Louisiana Target Market Shreveport Population | Total | 200,199 | under 18 | 53,854 | | | Target Market | 146,345 |

- Marketing Plan The Connection will be open 24/7 for our customers’ convenience. The café will offer breakfast entrees (available 24/7), as well as a variety of sandwiches, soups, salads, and non-alcoholic beverages for their dining pleasure. With specially designed tables, our customers will also be able to check their e-mail, play computer games, watch videos, or catch up on some work or studying while they eat or chat with friends. We will also be able to assist our customers with their printing, scanning, copying, and faxing needs; and will provide them with on-site technical assistance. For small business meetings, a quiet conference room with computer networking capabilities and food/beverage buffet, will be made available on a reservation basis. We also plan to offer a monthly “Business Brunch” where area business professionals can meet, eat, and network. For the high school and college students, we will offer monthly “Career Night” events where they can learn about area businesses and job offerings in the local community. And for the senior citizens, we will offer free computer classes for those who want to learn more about the internet, and how they can keep in touch with friends and family. A website, and monthly newsletter for registered customers, will provide information on our services and upcoming events. And a small selection of computer accessories and gift items will be available for retail sale.

- Market Positioning
The Connection’s positioning strategy and its primary points of differentiation are shown in the product attribute map (Figure 3 – Product Attribute Map) below. As you can see, we are the only establishment that ranks high in both (1) the degree to which it meets the needs of its customers, and (2) the extent to which it offers a high range of amenities for its customers.

Figure 3 – Product Attribute Map

- Points of Differentiation
There are many places to get free WiFi Internet today. Most hotels and motels provide this service to their overnight customers, and many eating establishments are beginning to offer the service to theirs. There are other places that have printing, scanning, copying, and faxing capabilities available for a fee. And, of course, there are places where groups can find conference rooms and buffets when needed. But there are none, yet, that offer all of these services in the same place.
- The Connection will be open 24/7 for our customer’s convenience. - The Connection offers a wonderful menu of great foods and non-alcoholic beverages. - The Connection offers free WiFi Internet connection. - The Connection offers printing, scanning, copying, and faxing capabilities. - The Connection offers on-site technical support. - The Connection offers a conference room with computer networking capabilities. - The Connection offers program events for high school and college students, for business professionals, and for senior citizens.
- The Connection offers a website for information, and ease in making reservations.
- The Connection offers a monthly newsletter to keep our registered customers up-to-date on all our products, services, and events.
- The Connection offers some computer accessories and gift items for retail sale.

- Pricing Strategies
The Connection will adopt a policy of value-based pricing, with these criteria in mind: - Current prices charged by direct/indirect competitors - Perceived value by customers
The proposed pricing and competitor comparisons chart shown below (see figure 4 – Proposed Pricing and Computer Comparisons), will show that The Connection is priced to compete with the current businesses offering the same/similar products and services.

Figure 4; Proposed Pricing and Competitor Comparisons Menu Items | The Connection | Olive Garden | Columbia Café | (Restaurant, 2010) | breakfast pastries | 1.99 | do not offer | do not offer | (Cafe, 2010) | breakfast entrees | 6.99 | do not offer | $5.99 to $7.99 | | sandwiches | $4.99 to $9.99 | do not offer | $7.99 to $12.99 | | single pizza | $8.99 | $9.95 | do not offer | | soups | $4.99 | $4.65 | do not offer | | salads | $2.99 to $7.99 | $5.35 to $9.25 | $3.99 to $8.99 | | cold beverages | $1.50 | N/A | N/A | (Library, 2010) | hot beverages | $1.50 | N/A | N/A | (WalMart, 2010) | Customer Services | The Connection | Public Library | WalMart | | black & white | color | black & white only | black & white only | print (per page) | $0.25 | $0.50 | $0.10 | do not offer | scan (per page) | $0.25 | $0.50 | do not offer | do not offer | copy (per page) | $0.25 | $0.50 | $0.10 | $0.06 | fax (per page) | $1.00 | $2.00 | $1.00 | $1.00 | Special Customer Services | The Connection | Columbia Café | El Dorado Casino | (Dorado, 2010) | conference room rental (per hour) | to be determined | N/A | N/A | | conference room buffet (per person) | $10.00 | N/A | N/A | | technical advice | Free | do not offer | do not offer | | classes and activities | Free | do not offer | do not offer | | WiFi Internet (with food purchase) | Free | Free | Free | | Items for Sale | The Connection | Office Depot | Office Max | (Depot, 2010) | 2GB Flash Drive | $10.00 | $7.99 | $8.99 | (Max, 2010) | 4GB Flash Drive | $15.00 | $9.99 | $12.99 | | 8GB Flash Drive | $25.00 | $20.95 | $24.99 | | "The Connection" Travel Mug | $10.00 | do not offer | do not offer | | Gift Cards | $10, $25, or $50 | $10 to $200 | $25, $50, or $100 | |

- Market Segmentation and Target Market The chart below shows the national averages for income after taxes, amount of money spent on food away from home, and the purchase of A/V equipment and services for people in the age groups we plan to include in our target market. (See figure 5 – National Averages). [ (Labor, 2009) ] Also below is a chart showing the population figures for Shreveport, Louisiana, which is our geographical target area. (See figure 6 – Shreveport Population) [ (Bureau, 2010) ]

Figure 5 – National Averages National Averages | Age Range | Average Income (after taxes) | Food Away From Home | A/V Equipment & Services | Student | under 25 | $27,907 | $2,117 | $681 | Student/Business | 25-34 | $58,809 | $2,836 | $1,105 | | | | | | Business | 35-44 | $75,677 | $3,340 | $1,168 | | | | | | Business | 45-54 | $78,537 | $3,244 | $1,174 | Business/Retiree | 55-64 | $69,009 | $2,646 | $1,113 | Senior Citizen | 65 and older | $38,841 | $1,617 | $763 |

Figure 6 – Shreveport Population Shreveport Population | Total | 200,199 | under 18 | 53,854 | Target Market | 146,345 |

- Promotion and Public Relations Our advertising and promotions will start with brochures outlining our products, services, and proposed events. These brochures will be distributed first to the local businesses, professionals, and students located near the Louisiana State Medical Center – Shreveport’s largest teaching hospital. A website and a newsletter will each be designed, published, and maintained as further advertising tools.
1) Prospecting (or sales lead):
Brochures will be sent to local High Schools and Colleges, as students use their laptops to study, as well as for entertainment and communications with friends and family.
Brochures will be sent to local business owners and business professionals, as they are the group most likely to need a place with complete computer services while they grab a bite to eat and complete their work away from the office, alone or as a group. A website will be developed, and appropriately advertised on social networks such as Facebook, LinkedIn, etc. 2) The initial contact: All employees will be properly trained in greeting, assisting, and serving the customers. Customers will be provided with brochures outlining our products and services.
3) Sales presentation: All customers will be offered a tour of the facilities during their first visit. Customers will be given the opportunity to register with The Connection, to receive notices of up-coming events and specials.
4) Meeting objections and concerns: All employees will be properly trained on handling customer complaints, suggestions, and questions, in a professional and courteous manner.
5) Closing the sale: Wait staff will be available at all times to take the customer’s order and provide any needed assistance while the customer is at The Connection. Customers will be able to meet with a manager (in person, by phone, or online), at the customer’s convenience, to make reservations for using the conference room, and/or to discuss the details of their personal/group needs.
6) Follow-up: All customers who register with The Connection, will be contacted by phone within 30 days after their registration, as a courtesy. Monthly newsletters will be sent to all registered customers. All customers will be encouraged to submit comments and/or suggestions they feel might help The Connection better meet their needs.

- Promotional Activities
Other promotional activities The Connection plans to offer are: - Monthly Business Brunch – for area business professionals to get together and network. This will be held one weekday each month, and will be open attendance for local business professionals.. - Monthly Career Night – for area high school and college students to meet and talk with area business owners and professionals; to learn skills that will help them in their own search for a job or career after they have completed their schooling, and to learn about available jobs in the Shreveport/Bossier area. - Monthly classes for senior citizens to learn or improve their own computer skills. - Monthly newsletter will be sent to all registered customers, with notices of upcoming events and money-saving specials. - Website will be developed so customers, and potential customers, can learn more about The Connection, and take advantage of the products, services, and events.

- Sales Growth
Our sales revenues will be predominantly from our food and beverage sales, with a small portion of revenues from the extra services, conference room rentals, and gift items sold. By targeting high school and college students, business professionals, and senior citizens, we hope to capture a sufficient portion of the industry market to quickly reach and surpass our break-even point. As The Connection grows, we will be able to offer more customer services, and to spend more on our Annual Marketing Budget. The amount now budgeted for marketing is as follows: - Promotional materials (brochures, menus) $10,000 - Website material, updating and support $10,000 Total $20,000

- Customer Motivation to purchase
The Connection’s customers will have all the benefits of good food, WiFi internet and extra computer services, on-site technical advice, and the ability to rent our well-equipped conference room. They will also have opportunities to take part in our community-wide events, and be kept up-to-date with our website and monthly newsletter.
Our prices will be reasonably competitive with other internet cafés in the Shreveport/Bossier City area. In addition to our menu selections and other services, we will offer a number of computer-related products (i.e. flash drives), gift cards, and an official “The Connection” travel mug. Our employee salaries will likewise be in line with those of our competitors – with consideration given to training and experience, thus ensuring that we will be able to hire competent, customer-focused staff that will see to our customers wants and needs as efficiently and courteously as possible.

References

Bureau, U. S. (2010, April 22). State and County Quick Facts. Retrieved July 19, 2010, from U. S. Census Bureau: http://quickfacts.census.gov/qfd/states/22/2270000.html
Cafe, C. (2010). 7-7-7 Menu. Retrieved July 19, 2010, from Columbia Cafe: http://www.columbiacafe.com/aboutfood.html
Depot, O. (2010). Office Depot. Retrieved July 20, 2010, from Office Depot: http://www.officedepot.com/index
Dorado, E. (2010). El Dorado Resort - Casino - Shreveport. Retrieved July 24, 2010, from El Dorado Shreveport: http://www.eldoradoshreveport.com/casino/index.aspx
Economic Census. (2010). Retrieved July 20, 2010, from U. S. Census Bureau: http://factfinder.census.gov/
Labor, U. S. (2009, October 6). Consumer Expenditure Survey. Retrieved July 19, 2010, from Bureau of Labor Statistics: http://www.bls.gov/
Library, S. M. (2010). Hamilton/South Caddo Branch. Retrieved July 20, 2010, from Shreveport Memorial Library: http://www.shreve-lib.org/hsc.htm
Max, O. (2010). Office Max. Retrieved July 20, 2010, from Office Max: http://www.officemax.com/
Restaurant, O. G. (2010). Our Menu. Retrieved July 19, 2010, from Olive Garden Bistro: http://www.olivegarden.com/menus/
Wage and Hour Division. (2010). Retrieved July 20, 2010, from United States Department of Labor: http://www.dol.gov/whd/state/tipped.htm#foot1
WalMart. (2010). WalMart Corporate. Retrieved July 20, 2010, from Walmart Stores: http://walmartstores.com/