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/
Management 306
Mauna Loa Café (Example 1)
To: Mauna Loa Café Executives
From:
Krystal Rodriguez
Date: February 12, 2014
Subject: The Vision Model-Mauna Loa Café
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.
First, I would like to talk about the setup of the caf茅. A new innovative way to increase customer service and decrease long irritating lines would be to split the café. 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.”
The next thing is discussing what makes these two 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 15% and employees have reported to feel less stressed. In the “Ku’u aku” side you pay 12 dollars and it’s all you can eat. In 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 like 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 café 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 cafés will feature warm bright colors like yellow and orange. When using warm colors in places where you eat you will tend to eat more by 17%. The music that plays will be soulful and empowering. The genres will vary 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 little 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.
Our store hours will convert into a 24 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 cafés 24 hours we will accommodate to customers that are sobering up from nearby bars and clubs and people starting their morning active workouts from nearby 24 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. If we utilize this, we will see another 15% 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 40% 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 call them the “kupa’a” cards. They both mean the same thing. It’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.
Oh man, and how can I forget our valuable employees! As an employee at Mauna Loa Café 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’okupa’a” card, which means “stay loyal”. As an employee stays loyal in company their incentives increase. Incentives 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.
“A’ohe hana nui ke alu ‘ia.” (“No task is too big when done together by all.”)
Management 306
Mauna Loa Café (Example 2)
To: Mauna Loa Café Management
From:
Drew Allensworth
Date: February 9, 2017
Subject: Proposal of New Strategies to Increase Sales and Customers
In the past seven years, Mauna Loa Café 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 Cafés 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 cafe redesigns, and a new focus on food offerings. Implementing these three solutions is projected to expand our customer base by 14% 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 cafe’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% 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. Instead, they must know that the only place that will ever offer the experience of these highly rare treats is Mauna Loa Café. With this strategy, sales of higher priced鈥攁nd higher profit-margin鈥攑roducts are projected to increase dramatically.
My second proposal addresses the physical store locations. The general “warm, friendly atmosphere” of Mauna Loa’s Cafés are bland, indistinct, and unfriendly to technology. Students are not catered to in the current cafe designs and the decor 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 cafe will carry our branding to brand-conscious peers and college campuses. Second, students who choose to study in Mauna Loa cafés 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 individual’s private enclaves to study. The decor should embrace modern Hawaii, pop-culture, and a rotation of art from young artists local to the cafe 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 decor and cafe 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 cafe’s redesign is expected to be only four months, but the redesign will attract and retain new customers for years. In 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. In the lore of the company, the original cafe 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. In recent marketing analyses, flavor pairings of new drinks with the new foods has been shown to increase sales of both by 17%. 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 Café 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 Café are at stake.
My detailed analysis is available as a report and I would be happy to answer any questions.
Management 306
Mauna Loa Café (Example 3)
To: Mauna Loa Management Team
From:
Shasta Standon
Date: October 27, 2015
Subject: Shiny New Ideas
First off, I want to thank you for giving me the chance to prove to everyone how excited and grateful I am to be a part of the Mauna Loa family. I genuinely appreciate the chance for you to hear 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. It’s deeper than that and can even be described as a way of life. We can integrate each of these into our business core:
A – “ala” or watchful, alertness
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 cafe, allowing our customers to get their coffee fix at any time that is convenient to them (thus keeping them “alert” and more “watchful”). To help keep labor costs low, during less peak hours of 11:30pm-4am, we would keep only a skeleton crew to manage the stores and only brew “to order” to ensure no waste. Longer hours and less waste would bring an additional 24% sales into our revenue stream after expenses.
L – “lokahi” or working with unity
Sometimes when we are shorthanded, we experience slower service times and our customers’ have expressed their impatience for the long wait. Looking 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 – “oia’I’o or truthful honesty
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 10,000 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 (I 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.
H – “ha’aha’a or humility
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.
A – “ahonui” or patient perseverance
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 enough! We must do all the 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. It will take a lot of patient perseverance to keep a step ahead of Starbucks, but I believe we can do it!
In closing, I hope you like some of these ideas and if anything needs further details or clarification, please feel free to ask me. I’m so excited to be a part of these changing times with you.