Mauna Loa Café
Mauna Loa Café, a 220-store coffee and pastry company, is facing several challenges. The company is asking you—one of their smart, new employees—for ideas to improve the business.
Write a memo to management proposing your idea(s) for improving the business.
Audience
Your audience is company management. They have specifically asked you for your ideas. This is your opportunity to impress them.
Purpose
Your goal is to convince management to adopt your ideas. Consider what will persuade them and what they need to make a decision. For purposes of this assignment, you can “invent” marketing studies, cost-benefit analysis, profit projections, etc. Be sure to include enough background and evidence to enable them to make a decision. Focus on benefits but also acknowledge obstacles.
Structure
You can include as few—or as many—ideas as you wish. Each idea should be in a separate paragraph. However, if the description of an idea makes the paragraph too long, find a natural break point and continue to another paragraph. Also, arrange your ideas in order of importance. Your first idea should be the most important, your next idea should be the next most important, and so on. How do you determine what is most important? Consider your audience. Decide what is most important to Mauna Loa Café management.
Style
You are writing to people above your position. Choose a sincere, reasonable, and respectful tone. Also, because your goal is to convince your readers, convey confidence in your ideas.
Website
https://www.watnik.net/306/cafe/
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To: Mauna Loa Cafd Executives
From: Krystal Rodriguez
Date: February 12,2014
Subject: The Vision Model- Mauna Loa Cafe
I would first like to start by thanking the executive team for this great opportunity to help our
company expand. I believe with these new and innovative ideas Joshua Kai, our founder, will be
happy that his dream launched to reality.
. A new innovative way to increase customer
service and decrease long irritating lines would be to split the caf6. By utilizing this method we will
see a clear distinction between customers who have time to relax and stay and enjoy their coffee,
and those who have a busy schedule but need their quality Hawaiian coffee. There will be two door
entrances. One will be titled “Aloha,” meaning “Hello” and “Goodbye.” The other entrance will be
titled “Ku’u aku,” meaning “Relax.”/
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The next thing is discussing what makes thesdtwo atmospheres different. On the “Ku’u aku” side
we will use a different of method service, and switch to conveyor belt. Conveyor belts are used in
many sushi restaurants and it has been seen to increase profits by t5% and employees have reported
to feel less stressed. In the “Ku’u aku” side you pay tz dollars and it’s all you can eat. ln the morning
we will feature mostly hot drinks like our signature cappuccinos, and espresso drinks. Our pastry
selection will include warm oatmeal and warm sweet bread, sandwiches, coffees. Towards mid-day
going onto nightfall we’ll switch the beverages to our colder drinks Iike our signature iced coffees
and frappuccinos. With the pastry selection being more of a dessert treats.
On the “Aloha” side we will start by having 3 different lines to decrease traffic. We will also feature a
new drink every 2 weeks with an opportunity for customers to vote if our cafd should keep it or not
by pressing buzzers that light up green for “yes” and red for “no.” Drink prices vary between 4-7
dollars. The colors in both cafes willfeature warm bright colors like yellow and orange. When using
warm colors in places where you eat you will tend to eat more by t7%. The music that plays will be
soulful and empowering. The genres willvary and incorporate respectful upbeat and
instrumentally/lyrically incline music to cater to older customers as well as our young adolescents.
The cool aspect of the “Aloha” side is our lighting. The lighting will constantly change with different
colors from the color scheme wheel every 15 minutes. We will also start a new tradition with
receiving tips. Every time a customer put a tip in this handmade metal bowls from Hawaii a bell will
ring and the lights will flare out a rainbow scheme onto the walls for 5 seconds and a recording of
Iittle Hawaiian children will sing, “Our home, our family, together we are one.” This will promote a
family and community feeling atmosphere that our customers will feel they need, and will continue
to come back.
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Our store hours will convert into a z4 hour schedule with Wi-Fi accessibility. We are located in many
main cities where people do not sleep and neither should the taste of our Hawaiian origin coffee. By
making the caf6s z4 hours we will accommodate to customers that are sobering up from nearby bars
and clubs and people starting their morning active workouts from nearby z4 hour gyms and fitness
centers. By staying late we will help our high school and college students find a place to escape, a
sanctuary to study. lf we utilize this, we will see another t5% increase in net profit.
Last but not least our budgeting plans. How are we going to pay for all of this? That is the easy part.
By spreading the word of our quality coffee on social medias and commercials people like hipsters
will soon make us the place to go. We will also launch our new commercial where in a blind test we
will make our version of the same coffee that Starbucks makes, and because we use fresh and
quality coffee and ingredients customers will pick our coffee over our competitors. Soon people will
want to come and try our coffee and experience what other happy customers have been saying.
Once we do that our sales will increase a total of 4o% and we will see the customer attendance
increase another 65%. To promote our feature coffees for customers to try we will give out coupons
and holiday specials. We will also introduce the loyalty cards, or how I like to callthem the “kupa’a”
cards. They both mean the same thing. lt’s free to become a member and it will start by receiving a
free drink on your birthday. The more you use your “Kupa’a” card the more benefits you get.
Benefits include receiving a free drink every week, a location finder to keep track and see where we
are serving their community at nearby expos and marathon where we will also be promoting our
coffee with our very own street team. As a member you will also receive a schedule of our “shot
hours” where certain drinks are half-off for a full hour, and “caffeine weeks,” where our seasonal
drinks are on special. Lo rl € C * FFC-bd€
oh man, and how can tforget ourvatuabte employees!or r” frnmln*'”f”a cafd you will
receive benefits as a partner in the company. Every employee that dedicates six months with the
company and completes barista training will receive an employee benefit card. Much like the
“Kupa’a” cards but better, this card is called the “Ho’okupara” card, which means “stay loyal”. As an
employee stays loyal in company their incentives increase. lncentives vary from extra days off,
bonuses, priority scheduling for work hours, to managers discount and a package of fresh ground
coffee every week. Employees will also have the opportunity to participate in scholarships for school
and home needs and opportunities to travel with the street team to promote our coffee and answer
some questions from customers themselves. There is no way that we can continue to make our
customers happy if we didn’t make our employees happy first.
I believe if we made these changes we will launch Mauna Loa Coffee into the World’s Best Coffee.
We will make our employees happy, which makes our customers happy, which makes our community
happy, which all goes back in making you happy. Once again I would like to thank the executive team
for taking the time and reading this vision model and I appreciate the opportunity you have given
me.
ftAtohe hana nui ke alu tia.tt (“No task is too big when done together by all.”)
MEMORANDUM
To: Mauna Loa Caf6 Management
From: Drew Allensworth
Date: February 9,2017
Subject: Proposal of New Strategies to lncrease Sales and Customers
ln the past seven years, Mauna Loa Caf6 has become my ohana and I care deeply about its success. As such, I
am truly grateful for the opportunity to present my solutions to our lagging sales. Consumers have a multitude
of choices for coffee and Mauna Loa Caf6s must stand out as places of particular benefit. To increase sales in
current Mauna Loa locations and enlarge the customer base, I propose new product marketing, cost-effective
caf6 redesigns, and a new focus on food offerings. lmplementing these three solutions is projected to expand
our customer base by 14o/o annually and increase monthly profitability by 22%.
Marketing Mauna Loa’s products as “Premium,” “Hawaiian ,” or “Kona” is not enough. Currently, this core
selling feature of Mauna Loa products is hurt by Starbucks and other coffee shops when they introduce
coffees sourced from other’exotic’ locations. The Caf6’s experience must be exclusive. Likewise, the beans
should be viewed by customers as a fleeting commodity. Recent marketing studies show that consumers will
pay 28% more for a product they perceive as having limited availability. Additionally, consumers are 42%o more
likely to purchase a ‘scarce’ product over the highly-available one, regardless of actual scarcity. To take
advantage of this tendency, Mauna Loa should introduce ‘seasonal,’ ‘new crop,’ and ‘small-lot’ as key words
with a harvest date mentioned for emphasis. Hand-crafted seasonal drinks should be offered with coffees
named by a particular farm, dirt-patch, hillside, micro-climate, or other unique location (i.e. “Pilau Farm,
February 2017 Limited Harvest: small-lot organic pulmeria-shaded Arabica and Robusta hybrid.”). Customers
should not be expected to care about the origin details. lnstead, they must know that the only place that will
ever offer the experience of these highly rare treats is Mauna Loa Caf6. With this strategy, sales of higher
priced-and higher profit-margin-products are projected to increase dramatically.
My second proposal addresses the physical store locations. The general “warm, friendly atmosphere” of
Mauna Loa’s cafes is bland, indistinct, and unfriendly to technology. Students are not catered to in the current
caf6 designs and the d6cor fails to resonate with the 18 to 29 demographic based on a recent customer
survey. My proposed tactic has two benefits. First, younger customers who do not stay in the caf6 will carry
our branding to brand-conscious peers and college campuses. Second, students who choose to study in
Mauna Loa cafes will attract friends and study groups. This provides both additional customers and a high
probability of repeat sales as the study session progresses. To capture these customers, Mauna Loa should
make three changes. First, purchase new tables, chairs, and couches to be arranged in a manner that gives
groups places to work, and individuals private enclaves to study. The d6cor should embrace modern Hawaii,
pop-culture, and a rotation of art from young artists local to the caf6 location. Second, power outlets must be
made abundant and easily accessible from every seat. Lastly, Wi-Fi should be upgraded to accommodate many
concurrent users at speeds conducive to downloading files or gaming. This new focus will require an initial
investment in new d6cor and caf6 redesign, plus additional monthly internet costs. However, the increased
monthly costs will be more than offset by additional daily sales. Likewise, the payback period for an average
caf6’s redesign is expected to be only four months, but the redesign will attract and retain new customers for
years. ln all three cases, the return on these investments is exceptionally high.
To expand market share, Mauna Loa must renew their focus on high-quality foods with a much broader scope
of offerings. Current Mauna Loa food offerings are average in quality, have remained unchanged for several
years, and focus solely on traditional breakfast pastries. ln the lore of the company, the original caf6 offered
Hawaiian-influenced foods made from locally sourced ingredients in the kitchen of our founder, Joshua Kai.
Mauna Loa has let down the vision of our late founder, and shows no financial benefits in its current food
strategy. The contract with our current bakery is up for renewal in April, allowing Mauna Loa to renegotiate or
change vendors without penalty. I propose starting a new search for bakeries that offer high-quality seasonal
and organic breakfast, lunch, and anytime snack items. The items must pay homage to our Hawaiian heritage
where possible, prove current with food trends, and be transportable in a frozen state to keep spoilage costs
low while taking advantage of our current food storage methodology.
The goal should be to provide novel foods for customers that are readily available and reasonably priced for
us. Our bargaining position for a new baker and food vendor gives the company an advantage when
negotiating for prices. Additionally, new ovens should be purchased for serving hot items in every cafe-
similar to Starbucks. The exclusive taste of Hawaii must be marketed heavily and vegan options should be
available to cater to the higher proportion of college students. New limited-availability items should be test-
marketed regularly and food stock should be kept ever-so-slightly low to allow for the perception of scarcity.
ln recent marketing analyses, flavor pairings of new drinks with the new foods has been shown to increase
sales of both by !7%.The higher food quality, scarcity perception, and expanded selection will work to
increase sales of food items beyond current offerings. This is based on the same marketing principles that
should be used for our coffees.
With the changes of new marketing, redesigned cafes, and foods selected to appeal to current tastes, Mauna
Loa Caf6 will experience a revitalization of its sales and brand image. Marketing costs will remain similar,
renovation costs have a strong return on investment, and food vendor renegotiations offer an opportunity to
procure better items at acceptable prices. The legacy of Joshua Kai and his vision for Mauna Loa Caf6 are at
stake.
My detailed analysis is available as a report and I would be happy to answer any questions.
-rst
una Loa CafeMa
To: Mauna Loa Management Team
From: Shasta Standon
Date: October2T,2OtS
Subject: Shiny New tdeas
First off, I want to thank you for giving me the chance to prove tqqygryong loy qxcited and grateful I
am to be a part of the Mauna Loa family. I genuinely appreciate fiSg.hrn$tJfr?., some of my ideas
to help our company expand and grow. To be sure, coffee is my life. I grew up on a coffee plantation in
my youth in Hawaii and helped in each and every step of the way, from bean to cup. I would help plant
the seeds, harvest the coffee cherries, dry and mill them, roast and grind them, and of course the best
part: taste the rewards of all that hard work. As you know, changes are needed to keep out the generic
Starbucks that keep popping up all over like so many unwanted pimples. Time is of the essence to keep
us competitive, so I immediately looked into the heart of what I think Mauna Loa represents and the
below are some key concepts I believe we should focus on.
Each time a customer comes into our store, we greet them with the classic greeting of “Aloha!” The
word Aloha means much more than hello and goodbye. lt’s deeper than that and can even be described
as a way of life. We can integrate each of these into our business core:
o A – “ala” or watchful, alertness
o Many of our customers have expressed their desire for our cafes’ to be open earlier or
have longer hours. Due to this demand, it makes sense for us to transform into a 24
hour caf6, allowing our customers to get their coffee fix at any time that is convenient to
them {lhus keeping them “alert” and more “watchful”@o help keep labor costs low,NNoff {auringlspeaLhours of 11:30pm-4am, we would keep only a skeleton crew to manage
s La^, the stores and only brew “to orde/’ to ensure no waste. Longer hours and less waste
would bring an additional 24Yo sales into our revenue stream after expenses.
o L – “lokahi” or working with unity
o Sometimes when we are shorthanded, we experience slower seruice times and our
customers’ have expressed their impatience for the long wait.letgoking into why this
was happening, I saw that newer hires were not trained on how to properly brew our
coffees, and were only being utilized for customer sales and serving drinks. We were
also losing a lot of sales due to improperly made drinks and causing excess waste. To
help combat this, I suggest we immediately cross train every employee in each job
function. To keep our high standards in place, the company should create a
standardized training program that each member is required to pass before being
released into the stores. This way, no matter which location customers go to, they will
enjoy the same high quality product they have grown to love.
o O – “oia’l’o or truthful honesty
o One of the best things I learned growing up was the experience of helping create a
delicious cup of coffee from the ground up. After polling over 10,fr)0 customers via an
app I created and posted on social media, I have discovered that many people would
also enjoy seeing exactly how we make their coffees, Therefore, I suggest we remodel
our beverage counters to have transparent glass walls, with glass openings in the
grinders and millers (l have already contacted our lead espresso maker, Franke Sinfonia,
with the idea and they will be able to process this new unit for us). This way, curious and
first time coffee drinkers can see and appreciate the art we make for them. The cost for
these espresso units will not be too much more than what is already on our budget plan,
as it aligns wonderfully with the preapproved remodeling plan already on schedule.
r H – “ha’aha’a or humility
o We have to understand that we are not above anyone else in this business.
Communication and understanding is critical for our success and that starts with our
own employees. Everyone, from the president of the company, to the newly hired
trainee, should participate in community service projects. We should understand that to
build a better community where people are happy and want to enjoy our products, we
must also contribute to it. We should build a center in each of our stores for people to
drop off unwanted items for donation to charities and shelters. Employees would be
given 5 days each year of paid community service time to help with these efforts, and of
course while they are doing it, they would be wearing our company t-shirts and handing
out samples of our delicious Kona coffee.
o [ – “ahonui” or patient perseverance
o Finally, one of the hardest obstacles we will need to overcome is beating out our
competition. Starbucks recently came out with their mobile app that allows customers
to order and pay online for their drinks for fast and easy pickup. As I understand it, we
are currently in the process of developing our own mobile app for ordering, but this isn’t
enoughl We must do allthe above and more. Customers love giving their opinions on
things they feel should be improved, so we can easily add a suggestion box on the
counter for this purpose. Monitoring and having a very active presence on social media
is also critical. People love when a company responds to them personally on Facebook
or Twitter. Making and keeping those personal connections is the key. lt will take a lot of
patient perseverance to keep a step ahead of Starbucks, but I believe we can do it!
ln closing, I hope you like some of these ideas and if anything needs further details or clarification,
please feel free to ask me. l’m so excited to be a part of these changing times with you.
N$,
MEMORANDUM
To: Mauna Loa Cafd Management
From: Ryan Adams
Subject: Business Improvement Concepts
Date: October 29,2014
I very much appreciate this opportunity for Mauna Loa Cafd management to consider my
ideas for improving our business. The Mauna Loa staff has been like a family to me these last
few months that I have started working here. As you may know, I qq{Jl oqf
Lefel*q1qller here-wilh Mauna Loa Cafd. I have never been more
satisfied with a career change, working here has been very fun and fulfilling to my everyday life.
The opportunity to lay out my ideas for management to hear is one I will most certainly take full
advantage of. The following three concepts have been my top thoughts for how to get Mauna
Loa back on track to become the powerhouse of coffee chains.
1. Sprinkle a little bit of crack into each coffee
Crack cocaine has been known to be one of the most addictive substances to men and women
alike. Much like Coca Cola did during the start of their business, we can gain lifetime customers
through adding this ingredient to our coffee. Not only will this add to customers’ energy levels,
but they will start to crave our product more after a cup or two. I understand this plan is a
hefty initial investment, which could run us upwards of half a million dollars to supply all of
our stores with this ingredient, but research suggests this will more than triple our net income,
which more than covers for the price of crack. Also this plan is very risky with the possibility of
law enforcement stepping in. However, if we package the ingredient ourselves and call it by a
different name, lik” “.u,9$gli!yg,” we have a very big possibility of pulling this off.
2. Offer alcoholic coffees
Adding alcohol to our menu will not only attract a new, untapped customer base, but will also
add to our net income by offering this alcohol at a higher price than regular coffee. With the
option of adding a few shots to your coffee, this will attract the elusive younger crowd we have
tried so hard to pull in. 99%o of adults age 2l-25 get their coffee from Starbucks (bastards).
Research also shows that about 60Yo of that demographic drink alcohol on a weekly basis. With
the addition of alcohol to our coffee we can pull about 40% of this age group to our franchise,
which will dramatically increase our sales while hurting any competing Starbucks in our area.
The average retail price of alcohol is about three times the cost of bulk prices. This means we
can charge $3 per shots of alcohol, which only costs up $l to add, leaving us with an additional
revenue of $2 per added shot. This can increase our overall income by about three million dollars
a year.
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3. Book live music to play at our shops
Many of Mauna Loa Cafd customers are long term dedicated consumers. We need to reach out
to the younger age groups if we are to thrive in this business. Drinking coffee at a young age has
become an epidemic, these young drinkers, ages I 6-22, are commonly referred to as “hipsters.”
Hipsters pride themselves in three things: drinking coffee, dressing like sensitive little girls, and
listening to “undiscovered” bands. With a little research, we can find and book whichever bands
are popular in the area of each shop. Most of the hipster bands are willing to play for as few at
$10, but they will bring in potentially thousands of dollars worth of hipster money to the shop
that booked them to play. Calculations suggest that if every current Mauna LoaCafe booked a
band a month for the next year, we can add more than two million dollars of revenue!
At the very least, I hope this sparks movement among the Mauna Loa management to implement
one or more of these ideas, or a variation of them. Thank you for your time, and for this
opportunity. Mahalo and aloha.