Analysis Of Caffiend Wellington And Possible Income Streams For Revenue Generation

Discuss about the strategic approaches for increasing the revenue streams for Caffiend, Petone, New Zealand.

Coffee culture in New Zealand

The following study is based on the existing business practice of café bars and other organization in the section. The study investigates how the café in Wellington, New Zealand is serving the customers. The study examines whether the café in Wellington is serving the customers with the traditional practice of taking orders or they are using the websites to reach the customers. Likewise, the study leans towards the solutions that Caffiend Wellington, New Zealand could apply to generate more revenue. The purpose of the report is to gain an understanding about how a business follows a current trend and applies it to the operation and make profits. It is observed that business industry in each sector has become dynamic. The organizations are in the rush of adopting innovation to the business. In such a dynamic environment, technology plays a big role- it helps to change mode of operation, which is observed in the case of Caffiend, Wellington, New Zealand. Caffiend is a beverage firm and it started the operation with traditional practice of operation but due to the advancement of technology, the organization adapts to the online platform. The following report provides a critical analysis Caffiend with respect to possible income stream and revenue generation.  In order to conduct the analysis with the real world context, the report includes both an analysis of previous studies and an analysis of primary data. Based on the analysis a suitable recommendation has been provided in the following.

It has been identified that people in New Zealand maintains a strong coffee culture, which is reflected in their disposable income (NZD 28.3%). The disposable income here is one-step behind Australia. Going forward, there is an increasing demand and trend of sustainable the products that hold a social responsibility in world’s market but particularly in new Zealand such trend certainly impact on how customers are selecting their coffee items. As put forward by Noone, McGuire and Rohlfs (2011), there has been temporary slowdown in the coffee industry of NZ because of the increase in international coffee price, but this fact does not affect the fresh organic coffee, as it increases up to 12% with respect to value. Furthermore, the bars as well restaurants contributed nearly $2,647 million to New Zealand economy in 2012. Moreover, the economic status was stabilized with the increase rate of 3.2%pa in the last five years to 2007 but at nearly 0.3% per year over the next five years (Hall & Rusher, 2013). This is because the recession has caused customers to slash discretionary expenditure on entertainment. Furthermore, the café bars and hospitality industry has much higher proportion of younger workers than the national economy. Thus, due to the availability of workforce and the technological base, the industry is rapidly growing. Fletcher et al., (2012) mentioned that driving growth in employment in the sector could be increasing patronage in cafes. Nonetheless, it is expected that the industry has been growing rapidly and many small and medium size organizations coffee organizations are entering the industry due to low cost model of café business. This increases the level of competitiveness in the market.

Economic status of the café and hospitality industry in New Zealand

Going forward, the food and beverage service sector remains as single biggest sector across all tourism-related sectors of the visitor economy. Service skills New Zealand’s tourism, travel and hospitality environment 2014 presents that a growing domestic demand as well as increasing tourism base is considered to be lead a natural employment growth in the visitor economy, especially in café, restaurants and other takeaway food sector. Hall & Rusher (2013) mentioned that employment growth might exceed any other in New Zealand’s economy with the projected growth of 43,700 employees or with the increase of 8.5%. The survey on the Department of Employment signifies that the accommodation as well as food sector could demonstrate a projected growth of 7.1% by November 2018 (Luo & Miln, 2014).

It is observed that Caffiend is an organization, which gains a tremendous popularity within a short period; however, the organization has served its customers for more than a hundred years. Caffiend has been able to gain attention due to its high quality of products. Considering the needs of the customers, the owner, Luis had taken the café to a more enhanced level in terms of high profit margin and high level of customer satisfaction. Inside the café, a healthy work culture has been developed with limited number of staffs. The organization followed and implemented an open management style considering the goals of teamwork. Even, sometime of the owner of the company is observed to be working with the front managers. The organization has a large customer base due to the attractive location. The café is located near the Wellington Institute of Technology, the institute has more than 6000 students and they crowd at Caffiend.

The following project investigates how the café and beverage firms in Wellington, New Zealand is serving their customers; this means the study finds out whether customers prefer to purchase  coffee visiting the outlet and or they prefer sending orders online. The study is developed in such a manner that helps to develop the possible ways of generating revenue stream for Caffiend Wellington, New Zealand. To meet the research goals and objectives, a primary analysis has been conducted. In order to collect the primary data, both quantitative and qualitative data collection techniques have been applied. Following the guidelines of quantitative data collection, a survey has been conducted among the customers of Caffiend while implementing the guidelines of qualitative method an interview has been conducted among the organizational members of Caffiend.

Primary analysis of Caffiend Wellington

Moreover, to conduct the survey and interview method, two different type of research questionnaire has been formed- such as the close-ended questions for the survey and the open-ended questions for the interview.  In order to conduct the literature review, 40 different journals have been selected that are conducted on the present topic of the study.  Nonetheless, five journals have been rejected due to the lack of relevancy, validity and reliability; the data provided in those journals were not reliable. Besides these facts, the current study is limited to primary analysis, which means the research lacks a comparative analysis between two organizations. In addition to this, the sample size for collecting data is very limited. The analysis would have been more extensive, had the sample been extended.

Even though, Caffiend has a large customer base, the firm is facing certain issues in terms of enhancing the level of services. New Zealand is technologically a developed nation and people access to technology but Caffiend has yet not developed its own website to take orders. In order to increase the sales margin, the café decided to take orders online as well but it has to rely on www.menulog.co.nz, which is a third party vendor taking order from the customers on behalf of many organization in the sector. Moreover, the organization has to spend a large amount of money as the charges for using the website.

This is certainly affecting the organizational operation; nowadays people are more attached to the technology- smart phone devices. However,  Caffiend did not develop a smart-phone app which would help the customers to order online. The customers will find it easy to take their beverage items. In addition to this, in the era of smart-phone app, people do not follow the traditional trend of ordering on calls. It is also observed that due to the stability in the economy, people have more enhanced lifestyle and they do prefer to go out for beverage items; instead, they would find an easy option to get their work done. Caffiend Wellington is trying to create a strong awareness among the customers about their products and services. The firm is determined to adopt the online system to penetrate in the large market. As the consequence, the organization felt the need of diversification in the business by developing a website and mobile application app for taking orders online.

It is necessary for Caffiend to examine the issue and find a speedy solution, which would increase the sales and customer base. Hence, the investigation is necessary because technology is the only thing now that is rapidly evolving. Besides the large firms, many small and medium size organizations have started adopting the technology in their operation to have more control over the operation.  Due to the adoption of technology, the level of competition is high in each sector and the organizations are rushing towards the innovation. In such a context, Caffiend will lag behind if it does not go with the flow. The organization has a large customer base, which enables them to run the operation with traditional practice, but traditional practice remains as the threat to the organization in the field of modern digital practice of operation. Thus, if the organization does not wish to apply innovation to its business, it might have to lose its existing customer base. Once the customers start visiting other nearby café bars, they might not come.

Diversification in revenue streams for Caffiend Wellington

This section presents the facts and findings provided in the previous studies related to generation of multiple revenue streams. The studies claim that most business models look for ways to genera revenue stream. Nevertheless, this might not always be the standard technique in restaurant business. Noone, McGuire and Rohlfs (2011) put emphasis on the fact that café bars get bogged down trying to do best for a market that is less receptive than the anticipated. The studies have mentioned that diversifying revenue stream is something that most small businesses consider; though not all restaurants consider the same. Zott, Amit and Massa (2011) mentioned that progress of the coffee segment, in which the consumers tend to look for more than coffee from such brands and increased the range of competition from other fast services. A study performed by Fletcher et al., (2012) mentioned that multiple revenue streams could be significant in any franchise because they provide a time effective way for an employer to reduce the risk and allow an anticipated cash flow from different sources; instead of depending on a single and conventional products and services. Furthermore, it has been observed that Tourism, Hospitality as well as Recreation sector employs more than 2000,000 employees and creates 4.8% of NZ’s GDP. A study conducted by Poulston and Jenkins (2013), presented the fact that such sector provides a large number of part time and lower-skilled jobs, meeting a significant role for those working during their studies. The Hospitality sector in New Zealand has wide spread geographic reach, especially, food and beverage includes everything from fine dining to fast food franchisee, clubs and pubs. Schiff and Becken (2011) mentioned that food and beverage services remains as the largest sub sector in hospitality industry, which generates $3.4 billion in 2015.

When the business reaches the peak point, it has to develop or arrange an alternative strategy to grow further and sustain the business. Especially, in hospitality sector, if the customers embrace the quality of service, the business is usually considered to be sustainable in the market. However, to remain active or keep this sustainability, the business must think of a sustainable or expansion strategy.  Kim and Mauborgne (2014) argued that when it comes to expansion of strategy, the small business may find it difficult, as to make a competitive position in the market, the small businesses have to offer specialized products, serve the regional or local market first and provide an individual level of customer service. Supporting the above-mentioned statement, Howard and Jaffee (2013) mentioned that large businesses have the advantages in finance, purchasing marketing, which means small business certainly have to face the difficulty of budget.  Levy, Reinecke and Manning (2016) proposed some of the important ways of expanding business in the coffee sector that are analyzed in the following.

Conclusion

Open up food cart in a new market: As discussed above, the small firm in the coffee sector needs to serve the local market by providing them with a specialized product. As put forward by Elder, Lister and Dauvergne (2014) the coffee shops mostly depend largely on customer traffic as well as they are mostly located in areas with the most convenient access for pedestrians. The major location for opening up a coffee shop usually include downtown, retail centre, office building, college campus and shopping malls.  An experimental study conducted by Alejandra Gonzalez-Perez and Fernando Velez-Ocampo (2014) mentioned that it is always effective for a coffee organization to select the crowded location. For example, if an organization is located at the downturn of the city, to expand the service area or market, it can open up another shop at University Campus establishing a food cart.  To be more specific, it was observed that the organization Coffee Club presently has 62 stores throughout New Zealand; however, at the initial stage, the firm first expanded its shop by establishing a coffee van near the Victoria University of Wellington, New Zealand (coffeeclub.co.nz. 2017)

Target market: According to Jaramillo et al, (2011), to expand the business through a food cart, the organization first needs to select a target market. Hence, the target market should include a university campus or crowded downtown of a city.

Coffee van:  As mentioned by Reinecke, Manning and Von Hagen (2012), it is always effective for the small and medium size organizations to expand business on with a low budget. Jaffee (2014) also mentioned that the organization should not make any large investment on the first expansion of the business, because the risks exist due to poor understanding of the market.  Therefore, establishing a coffee van at the target market location is could be significant strategy for the small and medium size firm. It is cost effective and attainable.  For example, a small coffee organization called Coffee Bella earned NZD$1920 (Dibellacoffee.co.nz. (2017). 

Activities (Weekly Income)	Cost and Profit and other variables
Investment	$60,000
Cups per Day	$120.00
Days per Week	5
Per Cup	$4.00
Total	$2,400
Less Costs Cost per cup	$.80
Gross Profits	$1,920

Table 1: Coffee Bella profit statement through coffee van

(Source: Dibellacoffee.co.nz. 2017)

Expansion through Coffee Trailer: A study conducted by Murthy and Naidu (2012), demonstrated that there are some small and medium size coffee organizations in New Zealand are penetrating in the market through cost effective business strategies such as coffee trailer or opening a shop at the front gate of a shopping mall. According to Mussatto et al., (2011) small and medium size organizations earn revenue applying such strategies. In addition to this, coffee trailer is movable, based on the crowd, the trailer can move from one place to another place. For example, the firm Coffee Bella has been observed to be earning the profits by expanding the service through coffee trailer (Refer to Appendix

Activities ( Weekly Income)	Cost, profit and other variables
Investment	$31,350
Cups per day	80
Days per Week	5
$ per cup	$4.00
	$1,600
Less cost per cup	$0.80
	$320
Gross Profit	$1,280

Table 2: Coffee Bella profit statement through Coffee trailer

(Source: Dibellacoffee.co.nz. 2017)

Increasing the number of stores:  According to Matzler et al., 2013), many small and medium size organizations have been observed to be concentrating on its footprint but they are also changing its store mix. In this context, Ruben and Zuniga (2011) commented that the when the demand of the product or service in the market is high, coffee firms could concentrate on drive-thrus in the outer edge of urban as well as sub-urban areas. Moreover, a study conducted by Ferreira & Harrison (2012) presented the fact if the market is competitive, it is always sensible to do something unique to maintain the growth of the business. For example, the large coffee giant Starbucks is seen to be opening an express store, which necessarily functions as work-thrus in the large cities.  This is an inspiring strategy, which the small and medium size organizations can apply to expand their business instead of opening more dine-in restaurants. In this context, Line and Runyan (2012) mentioned that this strategy focuses on maximizing organization’s store penetration.

Elevating the coffee experience- A study performed by Wiist (2011) mentioned that expansion of store, diversification and other related elements could be effective for an organization when the quality of the product is high or up to the standard. When the coffee sector is all set to grow multi-fold in the next few years, the firms should pull all stops to position themselves as the most preferred coffee shop. For example, the following picture shows a glimpse of the Starbucks’ expanded store portfolio, providing highly customized and elevated experience (Starbucks.co.nz, 2017). On the top of pyramid sits Roasteries, which is aimed at premium customers such as reach of uber and coffee connoisseurs. The organization should look for and coffee connoisseurs.  As put forward by Elliott (2012) the organizations should look forward to the potentially 10 Roasteries providing different sort of coffee experiences. The organizations should look forward to open new stores particularly targeting the middle class income group providing the premium Roastery experience but at the lower cost.  Nonetheless, in the implementation of all these strategies, the firms need to maintain a high quality of service.

Creating new customer Occasion: As put forward by Andreyeva, Chaloupka and Brownell (2011) the lunch hours could be the fastest growing day-part type of service. Hence, the organizations could concentrate on the type of items. Such sort of service can be done by increasing the number of items in the food menu. As mentioned by Davis et al., (2013) this strategy can be driven by enhanced food offering, more fresh food items with beverage. Moreover, the organizations could launch new service like Nitro cold brew in each store of their operation. All of these elements certainly help to aim at enticing a large number of customers to its stores by providing new as well as innovative food and beverage options.

Making investment in gifts cards and Tailored loyalty Schemes: As mentioned by Rosenblum, (2015) while the effective loyalty schemes is not exclusive to coffee firms, the major brands in the sector have generated revolutionary rewards programs that have increased the bar.  The large organizations like Costa Coffee, Starbucks have created this scheme that drives excellent interaction from the consumers and enhances the range of service on offer (Mengistie, 2011).  According to Ou et al., (2011), the loyalty scheme needs to be built around an excellent mobile experience, which certainly enables the customer experience to develop stairs and increase free beverage. The coffee firms need to create an immersive scheme that drives interaction and improves the customer experience.  For example, Starbucks has successfully been able to enhance its revenue to a staggering $2.65 billion with up to 22% of all sales (Starbucks.co.nz, 2017).     

Select the right point- of Sale promotion:  It is quite often that most of the retailers and shops now days generate strategic promotions at the sales points with an opinion to optimize the turnover as well as the bottom line range. As put forward by Ståhlberg, and Maila (2012) this strategy could play a significant role on the principle of human psychology, with the impulse purchasing related to a host of emotions involving sadness, anxiety and the mood. Hultman, Katsikeas and Robson (2011) mentioned that these sorts of emotions often work or also remain as the key drivers of consumer behavior, where it is observed that almost 82% of purchasing decisions are apparently made in the store. The major objective of such strategy is to create targeted promotions at the point-of-sale, where the market research plays a significant role at the time of understanding the needs and behavior of each customer. Going forward, (Manzur et al., (2011) also mentioned that point-of sales items must boast the competitive pricing as well as a clearly defined value proposition; this is because, the consumers should not b discouraged from making impulse decisions. Thus, this process ensures that the marketers could sell the point-of sale items in volumes by maximizing the turnover and the profitability in the process.

As mentioned by Tumanan and Lansangan (2012) the income growth is associated with the strategies of increasing revenue, which means if an organization is able to maximize the revenue growth, it might be able to increase the level of income growth:

Implementation of technology to the business: Basker, Klimek and Hoang Van (2012) claims that technology has made it easier for the marketers to penetrate in the wide market and once the business is able to reach the wide market, the source of income increases. This means, to get in a wide market or increase the customer base, coffee shops could adopt social media, which would help to reach the wide audiences. MacKenzie,  Meyer and Noble (2013) backed the strategy in their strategy by mentioning the fact that social media has a wide platform and millions of people are regularly active on such platforms. Tu, Wang, and Chang (2012) mentioned that when people know about the service, it is quite evident that they pay a visit. Thereby, when the customers base is large, sales margin increases and when the sales margin increases, the income level increases.

Simply the menu and eliminate low-margin items: As put forward by Wansink and Love (2014), one of the significant things that undermines profitability is the lack of adequate level of focus, because the brands look to diversify.  However, this might cause the firms to lose sight of their fundamental products and primary functions, while maximizing the cost bases as well as cultivated margins. In addition to this, coffee shops tend to provide a relevant case in point, as while they have increased to provide a host of beverage, supplementary menu items and food, the only product coffee that remains their potential drivers of the revenue. Thus, identifying this strategy as the key item, as this starts the process of streamlining firm’s offering to customers as well as creating more clearly described philosophy as well as menu proposition.

As put forward by Kolk (2012), eliminating low margin items that neither support the sales of coffee or reinforcing the image of the brand helps in this context, while this also reduces the costs without having a detrimental influence on the profitability. Moreover, when it comes to multiple revenue stream, the large and medium size coffee organizations like Monmouth Coffee and Costa Coffee have seen to be sourcing their own coffee for more than three decades. By paying visit to coffee cooperatives as well as continually sourcing new varietals, they effectively developed the relationship, which leads to higher quality beans at the same time supporting “fair and equal trade”. This has expanded a wholesale supply to other shops and through mail order. Such opportunities enable marketers to find new sources for increasing their revenue.

Business perspective: Business model and revenue steam

According to Leung et al., (2013), in the last decade, the organizations started to realize and observe that customers are interested in services but not the products. The recent trend toward “everything as a service” referred to as hyper-digitalization, which is considered as one of the major direction in the digital economy. This refers to an economy that is entirely based on the digitalization of information and the respective information and communication platform. Such type of economy consists of not only the technological elements but especially of business benefits and challenges. Hence, Eggert et al., (2014) mentioned that commercialization of technology through a sustainable business model unleashes its latent economic potential. Nonetheless, Stockdale, Ahmed and Scheepers (2012) mentioned that while organizations are making a considerable amount of money in the underlying technology –be it for extensive factors or to be capable of keeping up with the competitors, the revenue stream are neglected.  The study conducted by Hsu (2012) the revenue stream is referred to the money a company generates from every consumer segment. In addition to this, the revenue model is blueprint that explains how organizations generate value for itself by describing the sources of the revenue and mechanism to create values for itself by describing the sources of the revenue as well as the process to generate the revenue.

 This particular definition insists on the fact that an organization could have multiple revenue streams with variety of revenue generation mechanism. Hence, the revenue model is considered as the key segment of a business model by several authors. The revenue is considered as the hub with strong connection as well as interplays with other business models. Hence, Bughin, Chui and Manyika (2013) commented that the core of the business model conventionally contains the revenue model and the value proposition. It is also observed that besides the revenue model and the value proposition, there are some business models developing the blocks that involve the key resources, significant process, and the structure of the cost, distribution as well as the customer relationship. This major interplay of business model elements- “revenue model” occurs between the elements customer segments and distribution channel, value proposition and the customer relationship.

The study conducted by Galbraith?Emami and Lobstein (2013, presents the business as well as technological perspective are brought together and the authors have mentioned that with the diffusion of the Internet, a large range of studies have been performed to enhance its understanding of the mechanism to revenue models in the digital economy. More specifically, based on the previous studies, it can be mentioned that the revenue streams already have been analyzed with respect to digital content such as newspaper, magazine, digital music, electronic commerce or online games. From the studies, it can be mentioned that as cloud computing is certainly recent phenomenon, but only a little has been written regarding the revenue perspective on cloud computing until now.

Thus, to identify the consistent patterns and relationship of primary as well as secondary revenue stream of cloud-based platforms, a more descriptive qualitative content analysis was performed. Thus, this research technique was selected, as it is very flexible as well as provides a systematic approach of synthesizing a large set of data. The evidences from the prior cited studies indicate that in the digital economy, the Internet especially assists multi-sided business model and this clarifies that the revenue are made through interaction among many stakeholders instead of through one to one transaction, which is the conventional way for physical products in the real economy.

Conversely, it is also observed that cloud-platform providers receive a significant part of the revenue from the customers. This significant portion is generated indirectly by claiming a revenue share from developer of third party products and services. In addition to this differentiation between the direct and indirect revenue stream, the frequency of revenue generation could be useful discriminative criterion or the benchmark (Subashini & Kavitha  2011). However, the charges for an app or the add-on download are conventionally paid once, the smaller in amount but the consistent payments have derived considerable stand.  An increasing number of organizations are securing additional constant revenue by providing other services like continuous training as well as certification with the core value proposition. Going forward, the analysis of 25 cloud based platforms and detail literature review on revenue stream with the context of digital economy, a different types of suitable revenue streams for Platform as a service (PaaS) providers were derived (Marston et al., 2011). The previous studies demonstrated that many revenue streams are treated as the sub-genres of a generic revenue steam type. Furthermore, the relevant and suitable revenue stream types for cloud-based platforms include transaction-based revenue, subscription and additional platforms services.

When the value provided by the cloud-based platforms to the service consumers is characteristically the on demand provision of a service, the value proposition toward the technical users. As put forward by Zissis and Lekkas (2012) under the cloud computing architecture, Platform as a service could be classified according to their value proposition to the service provider. In addition to this, Xu (2012) mentioned that classification on the basis of the value proposition is especially relevant as value proposition is at the heart of a business model and it relates organization internal as well as external business model components. The differentiation of Platforms was derived by analyzing the value proposition of 25 cloud-based platforms. Hence, the evaluation of 25 platforms in respect with the major services that PaaS service provider provides three different and distinguishable sub-class of Platform as a Service as the service such as focus on the development, application-based integration and focus on the distribution network.

Focus on development: Platform based service provider’s major value proposition revolves around on supporting the enhancement of application Google App Engine, Bungee Connect and others.

Application-based integration: According to Gupta, Seetharaman and Raj (2013) major value proposition is the integration of developed application into an existing SaaS solution. The examples include SAP Business By Design and these can be integrated into their existing SaaS Solutions.

Focus on the distribution channel- It has been identified that the distribution channel is the most significant value offered service.

The organizations in the café industry could use this technology-based service and create the ways of generating revenue. The studies claim that technology is certainly a significant aspect of business that is rapidly growing. Thus, for generating revenue, the technology is a significant medium that can be leveraged to generate expected outcome. In this context, Aljabre, (2012) commented that in order to fill the gap between the current state with its shiftless use of business model concept as well as the use of technology towards the next evolutionary phase, the marketers and the information technology sector paid the attention to  the cloud based system. In this context, Gupta,  Seetharaman and Raj (2013) commented that commercialization process of emerging technologies should involve and consider social, technical, economical, political and legal factors. Zissis and Lekkas (2012) mentioned that for a start-up organization or the middle size organizations, the cloud based platforms providers are effective, where the firms could find the option for generating the direct revenue.

Apart from the technology, other possible ways that organizations in the café sector could follow to generate revenue such as the personalized membership, best member recognition, repeat guest rewards.

To generate review, the small and medium size firms in the café industry could rely on the loyalty cards and other value added services. In this context, Dhar and Varshney (2011) commented that most of the regular customers prefer the benefits service both in digital mode and traditional mode of businesses. The rewards should be given after revenues are generated. The following are the preferred option for generating revenue from the operation.

Personalized Membership-This new trend in café empowers the existing customers or the regular visitors of the café to personalize their own choice of items in accordance to their own lifestyle. The organization could set the price for new membership based on what the particular members could select. According to Hsu (2012) such trend could be treated as the carte membership programs.

Take advantages of outside funding-As put forward by Bughin, Chui and Manyika (2013), the small amount of outside funding can be applied to support a community’s vision as well as plans that could help to increase local interest and commitment in the area and encourage private investment.

Member recognition –Especially, in the café sector, the local residents mostly pay the visits on a frequent basis (Hall & Rusher 2013).  The customers who visit the café for more than a year, they should be recognized providing them with additional facilities- such as they could buy all products at 15% discounts throughout the year.

As put forward by Rotaris and Danielis (2011), the coffee sector is not a significant example of varying extent of intensive analysis given in different sustainability report. Many organizations accept the fact that a feasible feature for coffee enhancing remains as the significant materials are for the sustainability of the service foundation. However, the level of extension in multiple action plans might not remain same. For example, when some particular brands like Nestle and Keuring show more realistic and significant approaches to the challenge of coffee growing sustainability, other scenarios might be affected.  Thus, it can be mentioned that sustainability initiatives also contribute to the revenue generation. However, a study conducted by Eggert et al. (2014) provides the ways for generating revenue.

Appealing storefront- An easiest way to obtain new customers is, making the coffee shop attractive to people passing by.  The customers of the coffee shop should ask the visitors about the recent time and how they found the shop. This means that the customers could discover the location by passing the physical location.

Figure 1: How customer discover coffee shops

(Source: Eggert et al. 2014)

The above-mentioned graph helps to observe that if the coffee shops are not able to attract the customers by developing or designing the storefront, they might lose significant opportunities to increase customer base. In spite of the growing trend of sign-less storefronts, several shops find them critical. As put forward by Hsu (2012) when it comes to storefront design, signage could be a significant choice for implementation. This means it could help to point the traffic towards the coffee shop whether it is downtown or the outskirt.

Free sample- As put forward Rotaris and Danielis (2011), if a shop has the opportunity to have foot traffic outside the shop, it could get the opportunity of slowing the customers down with the free sample which remains as the significant way to introduce the customers to new products and services.

Visual appeal -As mentioned by Lindgaard et al. (2011), the first impression is something that needs to be considered is the storefront.  This means the visual appeal of the shop could influence or steal the attention of the individuals who pass by the shop.

According to Rotaris and Danielis (2011) every customer that pays a visit to the coffee shops, brings new marketing opportunity. This occurs because whenever a customer is satisfied with the service of the coffee shop, she/he can refer others or bring others such as friends, families and relatives. The study conducted by Li and Du (2011) mentioned that when the customers were asked about the coffee shop, the significant way, the authors discovered was friend recommendation.  It is certain that average things might not inspire or impress people to talk but they like telling other regarding an exceptionally good or bad experience of the service. A study conducted by Ye et al., (2011) mentioned that an effective customer experience could boil down to two separate aspects such as quality coffee and customer service. A coffee shop needs to pay significant attention to the quality of coffee and the standard of customer service to make customers pay a second visit. Here, the option for generating revenue is increasing the customer base by developing the quality of products and the quality of service.

As put forward by Ang (2011), social media certainly does not fall in the list of new trends but it still has a strong influence on small and medium size organizations. Social media is a wide platform and it could connect millions of people. The small and medium size organizations have the opportunity to connect with or attract thousands of customers online, which certainly increase the customer base. Some of the coffee shops and their customers use Facebook, Instagram, Twitter but the coffee shops are widely absent from other large platforms like YouTube and Snapchat.  Millions of people are regularly active on Facebook, Twitter, YouTube and other social networking sites and this certainly provides a significant opportunity for making people aware of the brand, products and services (Lovejoy & Saxton, 2012). Such platforms also provide the opportunity for promoting the brand in the international business environment. When a brand is globally known, the customers certainly prefer to select that brand. This means it is important to place the brand in the mind of people. If the awareness increases, the possibility of customers and the profit margin also goes high. In addition to this, if the organizations create a community page on the social networking sites, they can engage the customers in their organizational activities such as positing pictures, information about the products and service and other deals and offers. Checking out such information on a regular basis could positively influence the buying habit of customers. As the consequence, the growing engagement of customers could be reflected on the profit margins.

In order to conduct the research, both primary and secondary analysis has been conducted. To collect the primary data for the analysis, quantitative data collection method has been applied to the research. As put forward by Short et al., (2012), the quantitative data collection methods have the base of mathematical data collection in different format. In the present research, the techniques of quantitative data collection include questionnaire with the close-ended questions. To collect the quantitative data a survey has been conducted among the customers of Caffiend. In the survey, a set of close-ended questions have been directly provided to the customers. Taking the consent of the customers, the questionnaire has been provided to the visitors. After collecting the data, they are converted to the numerical digits and presented them in the table and graph. Likewise, the analysis has been performed linking the data with the findings found in the literature review. The respondents have been selected based on the probability sampling technique.

This chapter of the study presents the data finding that have been collected by performing a survey among the customers.  For conducting the survey, a probability sampling method has been used in the study. The population size for survey was 150 customers of coffee shops located in Wellington, New Zealand. However, the responses of 100 customers have been considered in the analysis. To conduct the analysis, first, the data has been converted to numerical digits and then they are presented with the help of graphs and tables.  Furthermore, to perform the analysis, the data has been linked to the literature review.

The present study is limited to primary analysis only. The study lacks a secondary analysis such as a thematic analysis, which would have increased the efficiency and relevancy of the research. In addition to this, the population size is also limited in the present study; the large size of sample would have increased the efficiency of the study.

The above mentioned data and findings indicate that the organization Caffiend has a strong customer base due to the high quality of services. However, the customer service of the organization is not in accordance with the expectation. The possible solutions to these issues are discussed below.

Implementation of technology- The organization Caffiend needs to take help from the social media tools such as Facebook, YouTube and Twiiter. The social media is a large platform to promote the products and services. Millions of people are involved in social networking sites. The brand could create a community page, where they could update the information about the products and services.

The firm could create a Facebook page, which should remain public for all visitors; thereby, the visitors could see the posts of latest products, offers and deals and avail the service. The firm should do it because social media is certainly a large platform and fast communication medium; thus, any message, which the firm wants to convey, reaches quickly to the target audience. Moreover, the target audiences of Caffiend are young adults who are college goers and the professionals who usually visit the coffee shop with friends. These young adults and professionals are regularly involved in the social media activities. Once they join the Facebook page, they could see the updates of the services and based on the frequency of liking and sharing the posts, the customers can be individual tracked. Likewise, that customer can be approached with appropriate deals and offers. Hence, while sharing the posts, the firm must ensure that it provides the details of the products and service in the content.

However, the offers and deals should be written in bold, so that it steal the attention of the audiences and along with the details, the post must contain the graphical images.  Along with the content, all external links should be shared, so that the customers could visit the official website of the firm for more details. Similarly, another social media tool like Twitter is also useful for communicating with the target customers. Caffiend should create a profile on Twitter and the marketing executives of the firm should run the profile on a daily basis. On every single, the posts containing the details of the products should be shared on Twitter. Hence, the profile must follow all regional celebrities and popular personalities. In addition to this, the video sharing website YouTube is widely popular, where all young people created an account. As the communication initiative, the firm could develop a video consisting of the contents of the products and services. As per the regulation of YouTube, the video should be played with another popular video.

The organization Caffiend needs to develop a website where the customers could order the products online. In addition to this, as the smartphone apps are popular among the people, the organization could develop a smart app, which needs to be user-friendly. The customers could easily order the beverage items and receive their products on time. By implementing such initiatives, the organization could access the large market or it could reach people located in the remote areas. This will certainly helps the organization to increase their customer base.

Due to the technological development in New Zealand, all young and young adults use Smartphone. Caffied should develop its own app where they could include all features and functions associated with the list of the products, which should be there on the app. In fact, a helpline number should be provided on the app, which could help the customers to reach the shop for any query. In addition to this, app needs to be programmed in a way that it could be supportive to all operating systems.

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