Pricing Strategy
Internet Café bases its prices for coffee and specialty drinks on the "retail profit analysis" provided by our supplier.
Determining a fair market, hourly price, for online use is more difficult because there is no direct competition. Therefore, Internet Café considered three sources to determine the hourly charge rate. First, we considered the cost to use other Internet servers, whether it is a local networking firm or a provider such as America Online. Internet access providers use different pricing schemes. Some charge a monthly fee, while others charge an hourly fee.
Promotion Strategy
Internet Café will implement a pull strategy in order to build consumer awareness and demand. Initially, Internet Café has budgeted $5,000 for promotional efforts which will include advertising with coupons for a free hour of Internet time in local publications and in-house promotions such as offering customers free Internet time if they pay for an introduction to the Internet workshop taught by Internet Café computer technician.
Internet Café realizes that in the future, when competition enters the market, additional revenues must be allocated for promotion in order to maintain market share.
Sales Strategy
As a retail establishment, Internet Café employs people to handle sales transactions. Computer literacy is a requirement for Internet Café employees. If an employee does not possess basic computer skills when they are hired, they are trained by our full-time technician. Our full-time technician is also available for customers in need of assistance. Internet Café commitment to friendly, helpful service is one of the key factors that distinguishes Internet Café from other Internet cafes.
Sales Forecast
Sales forecast data is presented in the chart and table below.
Sales: Internet Café is basing their projected coffee and espresso sales on the financial snapshot information provided to them. Internet sales were estimated by calculating the total number of hours each terminal will be active each day and then generating a conservative estimate as to how many hours will be purchased by consumers.