Coffee Shop Case Study Answers

• Subject Name : Management

Case study

Hugs and mugs is one of the most eminent coffee shops in the entire region. It was established with an aim to provide a coffee arena where people can spend time with their friends and enjoy the ultimate taste of coffee. Hugs and mugs had a very good initial start, many of the customers started visiting the coffee place on daily basis. They not only enjoy the coffee shop decorum but also find the taste of the coffee delicious. The coffee shop provided a wide list of coffees for its varied customers. The best thing about the caf was that people started feeling connected. They were happy with the service provided by the waiters. The profit percentage of coffee was also good. Everything was in place the shop was slowly and steadily becoming one of the favourite places of the youngsters. Majority of the customer were youth. According to them, coffee was not a beverage, it was their happiness. Customers acclaimed that the first sip of the coffee makes them feel as if they are into the world of coffee. They used to find coffee as a pleasure and thus used to visit caf almost every day.

Sam Manchester is the owner of the coffee shop. He used to visit the place sometimes on Sundays to see how the caf is working and our customers satisfied with the coffee or they are not. He used to monthly audit the sales percentage and also review how many new customers have started visiting his caf. While discussing with one of the customers Sam identified that Hugs and Mugs provide one of the best coffee experiences for its customers because it always treated and valued its customers by giving them the priorities. Hugs and Mugs caf gained momentum in a year. The caf was a huge success it can be evaluated from the fact that caf was almost full even in the odd hours of the day. It is all because of its fanatically designed caf arena and decent coffee experiences of its customers and organically roasted coffee beans. Sam is the owner always asked the manager of the coffee not to compromise with the quality of the coffee beans because he knew that it is the taste of the coffee that attracts customers towards them. He even used to inspire the coffee makers to create an exotic coffee for its customers.

He knew that the credit for successful caf goes to the coffee makers and waiters who work all day long just to please customers so that they visit again. Some of the old customers used to come and appreciate about coffee provided to them. Sam even increased the area of the caf for those customers who want to work and spend time drinking coffee. It helped Hugs and mugs to attract more potential coffee lovers to the place. Caf customers used to describe coffee as a flavour just like heaven. The soothing music of the caf is another point of attraction for coffee lovers.
Hugs and mugs cafe was prioritized by customers until another cafe inaugurated in the nearby area. Though Hugs and mugs caf has been leading the coffee cafes for the last few years its rivalry caf diverted the customers. Customers often reported about degrading taste of the coffee. Reviews of the caf and food items were mostly about the abolishment of the palate that cafs food and coffee earlier had. People often appreciated the nearby newly opened caf against hugs and mugs caf. Hugs and mugs caf soon observed a deflation in the customer framework.

Most of the times, caf was all empty. With an increased demand for coffee drinks, it has become difficult for the caf to keep up with the changing needs of the customers. Customers mostly compared the hugs and mugs caf with the nearby rivalry caf. Hugs and mugs caf though was good at what it was serving but it lacked the ambience that the new caf had. Most of the customers were diverted to another caf. It experienced a decline in customers. It affected the overall performance of the staff and members. This resulted in a lack of motivation in the staff members and managers as well. Apart from waning customers, a team of the caf was also demotivated with this scenario. Management related problems such as delay in placing orders became common, which impacted the customers in a negative way. Sam Manchester, being the owner of the caf realized the same and he too was demoralized with the scenario. This, in turn, affected the service being provided to the customers who visited the caf. They reported about poor service of the caf.
Because of the lack of motivation team was not enthusiastic about serving the customers. Delay in service provision created a bad impression over the customers. It poorly affected the customers and reputation of the caf. Limited coffee drinks offered by the caf were another reason for the diversion of customers to another caf that offered a wide range of coffee drinks. Choices of customers vary from one customer to another, thus demand for a wider menu is mandatory. But hugs and mugs caf failed to align with changing needs of the customers and twigged to the older men. Another reason for the decline in profitability of the caf is the lack of new inventory. Hugs and mugs caf failed to align with new drifts being followed in coffee serving processes. Such drifts include icing styles, serving bravura, presentation and embellishment of the coffee drinks. These factors though not contribute to the overall taste of the coffee, but make the drink attractive and eye-soothing. Such eye-catching techniques play an imperative role in attracting customers. Moreover, the location of the caf is not in busy places of the city but is located in the outskirts of the city which has resulted in the reluctance of customers to travel a long distance to reach the caf. Transportation system also not touches the caf which makes it difficult for customers to reach caf on a regular basis.
The coffee shop had faced an immense challenge in surviving in the market. Sam Manchester had decided to take a big step to make the coffee shop popular as it was before. Sam has created a marketing team for the marketing and competition analyses of the coffee in nearby places. The team was provided with the proper training to make the market analyses more effective. Every day, every member of the team was supposed to visit in the different coffee shops and observe the ambience, services and many other factors. All the members of the team are gathering in the evening and discuss the points observed by each of them. The team use the brainstorming technique to generate new ideas from the collective observation of the team members from the visits to another cafe. Sam conducts this meeting and takes out some steps to increase the sales of the cafe.

The target audience is college students and office going bachelors. Sam has decided to change the ambience of the caf according to the preference of college students and office going people. An additional area has been constructed for the people who carry a laptop and need an area for sitting and doing the work for a longer time. The playlist has been changed completely and two different playlists are set. One is according to the preference of the college students and another is as per the preference of the office going people. A remix of romantic, disco songs are listed for the college students and slow, pleasant music is played for the working individuals. Sam has invited the famous personality Tom Hunt, who is the owner of the famous cafes and bars, for the quality check of the coffee. The caf has enhanced the quality of the coffee.
Moreover, the price of the coffee has been reduced and fixed as per the competitors price. Sam has lowered the price to attract customers. He has also decided to increase the variety of coffee and added latte, cafe mocha, cafe Americano and so on. Moreover, he has also added some cookies and toast with the coffee as a complimentary with the coffee. Sam has started to take the feedbacks of the customers through a questionnaire on a tablet. In order to attract new customers, he has launched some offers like getting 50 as cash back in the 1st order, enjoy free food in 5th order of the coffee and so on. Sam started observing the improvement of the sales of the caf. The sales have increased by 20 in the first week. The existing customers are also retained after the implication of these strategies. Furthermore, the e-payment system has been introduced in the caf. This system is very convenient for most of the people as they do not carry much cash in hand. Most of the target audience uses credit or debit card for the payment. The customers can also earn the loyalty points in every 50 of order. These points can be redeemed through cash backs.