Market Analysis For Starting A New Café In Australia

Customer Preferences and Profitable Location

Discuss about the Social Entrepreneurship and Sustainability.

The paper would delve into market analysis to measure the profitability of new café in Australia. The proprietor of the entrepreneurial venture conducted the market research to gain knowledge about the customer preferences and customer segments. The management of the restaurant had very limited knowledge about the preferences of the consumers in Australia and did could locate a convenient location for the business. They entrusted the responsibility of gaining information about the market to a consultancy firm (Scarborough, 2016). The paper would suggest the upcoming entrepreneurial café firm about customer preferences and a profitable location. The research would require delving into the market conditions of Australia. It should consider using models like PESTEL which alignment to food industry. The research would pave ways for the business to form important strategies in terms products, pricing, location, financing and salient aspects which have to be taken into account. Appropriate decision making based on the market research would play significant role in ensuring success and expansion of the café business in the Australian market (Kirzner, 2015).

The main purpose of the research is to gain information about information about the market condition of Australia prior to embarking on food ventures like cafes. Success of new business organisations, irrespective of sizes and scale is dependent on its power to deliver products aligned to the needs of the customers. This is due to several factors which exist in the market. First, the entrepreneurial ventures, especially the sole proprietorship ventures have limited resources which they invest in the business. Secondly, new ventures face competition from existing companies in terms of customer base, capital generation and revenue generation (Drucker, 2014). Thus, they have to acquire considerable customer base and earn sufficient profit to succeed in the face of this competition. They thus have to introduce appropriate products which are in line with the customer preferences. Moreover, customer preferences are dynamic in nature and the business organisations require to remain abreast with it. This main purpose would give way to forming strategies pertaining to marketing mix of the café.

The research design should consist of gaining both secondary and primary research. This is because the formation of an appropriate marketing strategy requires knowledge about present customer preferences and future market trends. Entrepreneurial ventures, unless subsidiaries of multinational companies have limited financial resources compared to the cut intense competition in the global market. Hence, they require to allocate their resources judiciously in areas like acquiring raw materials, human resources and production. This justifies use of primary and secondary research. The primary research would consist of conducting surveys of customers to gain knowledge about their expectations from cafés and restaurants (Dees, 2017). The questionnaire would aim to gain certain specific pieces of information that would guide formation of the marketing mix of the café. The information would revolve around their product preferences form cafes, their pricing expectations, frequency of visits and their expectations as far product range is concerned. The information would also revolve around expectations customers have about ambience, services and location. The researcher should gain information on the expectations which the customers have from the ecommerce portal of the restaurant, like delivery, product viewing, availability of variants of products online and customer service support.

Primary and Secondary Research Methods

The secondary analysis would include study of books, articles, journals, magazines and internet websites. Business firms come under factors like government policies, laws, economic conditions, financial conditions and availability of talent. For example, the firms irrespective of size and industry have to comply with the Safe Work Act and the WHS laws. Thus, the entrepreneurial venture should gain knowledge on these matters. The café management fuirst need to acquire license and approval in order to open and run a café business in Australia. Thus, it requires to gain information from government websites regarding these facts. Proper compliance would the laws and policies would enable smooth running of the business whereas failure to comply with the laws would prove to be hazardous for the business (Parker, 2018). Hence, it can again be justified that the café management should conduct secondary research to gain information on market conditions in Australia.

Location of the outlet plays a very important role in deciding customer footfall and profitability. For example, location of the outlet of the café at a strategic place would enable customers to accede the café easily. This would result in generate a business and high profitability. Similarly, location at a strategic position would enable the café to acquire supplies of raw materials easily. Thus, location at a strategic place would directly impact customer footfall and revenue generation. The researcher requires to apply both primary and secondary analysis. The primary analysis would involve surveying the respondents on their preferred locations. The secondary analysis would involve analysis of market performance of the existing cafes situated in different locations (Kuratko, 2016).

The next analysis would involve collecting data regarding suppliers of raw materials situated in different locations. The researcher would gain information on the different suppliers from which the café can gain raw materials like coffee beans and milk. Then it would require require to obtain quotes from them and gain information about their business conditions. The proprietor(s) would then decide on the suppliers from which the café would acquire raw materials (Storey, 2016).

The discussion shows that both primary and secondary research should be adopted by the café to gain information about the market conditions in Australia. It would then use the findings as the bases of its business decisions as discussed above. The following are the question which the researcher would ask the respondents:

1. How often do you go to a café or a restaurant?
2. What are the factors you consider before choosing a restaurant or café?
3. What is your preferred location?
4. What is your most preferred flavour?
5. To what extent does service quality and ambience matter to you?
6. What are the main food item/drinks you prefer to have at a café?
7. What is your income?
8. Is it important according to you, for cafes to operate sustainably?
9. Is is compulsory for cafes to have ecommerce presence?
10. What suggestion(s) would you give to the café owners?

The target population for the market research of the café would be 200 respondents and the preferred sampling technique would be statistical. The sample size would consist of 200 individuals minimum. This would allow the researcher to gain sufficiently large body of data to carry out the research. The respondents should be from diverse professions, age groups, cultures and other background types. This would enable the researcher to gain immense knowledge about preferences of different individuals. The preferred locations of meeting the respondents would be shopping malls where the researcher would be able to communicate with a large number of respondents (Dentchev et al., 2016).

Marketing Strategies for Café

A large sample would also enable the researcher to get large amount of information among he can choose the best pieces information which he can use to proceed with the research. Incomplete and inappropriate responses can be discarded. The researcher should be particular about the accuracy of the information which he would presenting in the research. The researcher should obtain consent of the respondents before presenting their opinion in the report. The researcher should abstain from asking any personal and inappropriate question to the respondent. He should use the information gained from the interview only for the research purpose.

The data would be gathered by the researcher firm by surveying minimum 200 respondents. The data would be collected using primary and secondary methods. The researcher would analyse the data using software like SPSS and analyse it statistically. He should exercise strict supervision on the accuracy of the information he would present in the research. He should ensure strict supervision on the data he would collect. He should ensure that he does not distort the data and responses. He should present authentic information in the research. He should conduct the research ethically. He should not present counterfeit and fake data in the research.

	Amount ($)
Sources of funds
Allocation from accounts department	1000000
Loan from bank	150000
Total	1150000
Expenditures
Building(Note 1)	100000
Furniture	50000
Vehicle rent	2000
License	5000
Salary (100 employees)	60000
Advertisement	7000
Stationary	5000
Miscellaneous	5000
Raw materials	50000
Total expenditure	284000
Budget surplus	866000

Note 1: The amount in building represents amount which would be spent to acquire a building.

The research firm needs to form a budget to estimate the like sources of income and expenditure related to the start-up café business. It has been assumed that the sources of finanbce for the start-up business in the initial business come from allocation of funds by the accounts department and loan taken from the bank in the initial stage. The expenditures are shown. The budget shows that the business would have around $866000 at the initial phase. The analysis shows that the business requires to allocate more funds to fuel further operations.

The research firm should follow a time line to conduct the research and present its findings before the café management. The time line is as follows:

Activity 1: Conducting marketing research on macroeconomic situation in Australia.-6 months

Activity 2: Presenting findings of macroeconomic research before management- 1 month

Activity 3: Gaining approval from management of the café-1 month

Activity 4: Conducting survey-2 months

Activity 5: Presenting findings of survey before the management of the café-1 month

References:

Dees, J. G. (2017). 1 The Meaning of Social Entrepreneurship. In Case Studies in Social Entrepreneurship and Sustainability (pp. 34-42). Routledge.

Dentchev, N., Baumgartner, R., Dieleman, H., Jóhannsdóttir, L., Jonker, J., Nyberg, T., … & van Hoof, B. (2016). Embracing the variety of sustainable business models: social entrepreneurship, corporate intrapreneurship, creativity, innovation, and other approaches to sustainability challenges. Journal of Cleaner Production.

Drucker, P. (2014). Innovation and entrepreneurship. Routledge.

Kirzner, I. M. (2015). Competition and entrepreneurship. University of Chicago press.

Kuratko, D. F. (2016). Entrepreneurship: Theory, process, and practice. Cengage Learning.

Parker, S. C. (2018). The economics of entrepreneurship. Cambridge University Press.

Scarborough, N. M. (2016). Essentials of entrepreneurship and small business management. Pearson.

Storey, D. J. (Ed.). (2016). Entrepreneurship and new firm. Routledge.