Offering the Marketing Strategy to Increase Sales and

Profits of Perkys Espresso Company:

Repurposing Project Report Final

Prepared for:
Prepared by:

Lori Bowden
Owner of Perkys Espresso
Aubrey Bond, Matt Britten,
Maria Okhrimenko
Washington State University
April 10, 2016

Perkys Espresso Stand

11811 Canyon Rd E,
Puyallup, WA 98373

Letter of Transmittal
Date:

April 6, 2016

To:

Lori Bowden, Owners of Perkys Espresso

From:

Aubrey Bond, Matt Britten, Maria Okhrimenko

Subject:

Recommendation Report on Marketing Strategy to Increase Sales and Profits

Attached is our report on the study of marketing strategy to increase sales and profits of Perkys Espresso
thorough the use of discount promotions and social media. In this report you will find the details on the
tasked we completed in the process of making our recommendations.
Research was performed and data and information was collected from both primary and secondary
sources. In order to maintain a diversified view, we group data from several source. Global mapping and
traffic data, long and short term data collection, and statistical information for multiple age groups made
up our assortment of data to pull from. Once we had collected all of our data, it was group and analyzed
to first complete and answer our four tasks, but then the overall objective.
The main finding was that through thoughtful and well planned discounts you can have both increased
customer count and overall profits. With encouraging multi-buy customers both new and old you will see
the difference.
We thank you for your time in reading this report, and we are fully confident that you will share in our
optimism when youre done.
If you have any questions, please dont hesitate to contact us!

Table of Contents

Subject

Page Number

Title Page .

Letter of Transmittal ..

Table of Contents ...

Executive Summary ........

Introduction .....

Research Methods .......

Task 1: The benefit of discounting products..

Task 2: The most beneficial way to offer discounts/promotions .

Task 3: The best time to hold a promotion .......

Task 4: The best social media to communicate to customers about promotions... 5

Results .....

Task 1: The benefit of discounting products.

Task 2: The most beneficial way to offer discounts/promotions

Task 3: The best time to hold a promotion .......

Task 4: The best social media to communicate to customers about promotions... 6

Conclusions .....

The benefit of discounting product .......

The most beneficial way to offer discounts/promotions ..

The best time to hold a promotion ........

The best social media to communicate to customers about promotions . 7

Recommendations ......

Appendices ...........

Executive Summary
Perkys Espresso it a privately owned coffee shop located in Puyallup, WA. Advertising has never
been a core concern for the company but our group has found that with specific marketing techniques,
Perkys Espresso will have more success and greater profits. Through research, it has been found that
discounting products actually results in greater profits. When customers feel as if they are getting a deal,
they are more likely to spend money on bigger purchases such as adding on multiple drinks and food
items. Multi-buying promotional techniques is also a key booster in the marketing in the company and
leads to bigger purchases, so creating buy-one-get-one deals is significant. It is obvious that coffee is
the most popular in the morning, but it is also common in the late evening. With that being said, we were
able to instill the most effective hours for a happy hour special on drinks. These promotions will benefit
the company in a very positive way and increase company profits. Because more and more people are
depending on technology, we also found that social media would be the most effective and cost efficient
way to market these new promotional sales for Perkys Espresso.

Introduction
Perkys Espresso is a privately owned coffee stand located in Puyallup WA. With big competitors
like Starbucks right next door, it is important for the Perkys company to take their marketing strategies
very seriously. After discovering that Perkys does not have any real tactics behind advertising its
business, our group decided to use research to create new ways for Perkys to promote itself. Currently
the stand uses only a word-of-mouth strategy to reach out to new customers. Although this strategy is
great, it is depending on the loyalty of customers to tell their friends about the stand itself. This method is
not ideal in creating a greater name for the company and Perkys needs to focus on executing where they
can to promote products and services to their people.Therefore our group suggests that that Perkys begins
to execute their marketing strategies through 4 main recommendations:
-

Offering Deal-of-the-Day drink specials

Promoting Buy One, Get One deals on drinks and foods

Instilling Happy Hour times

Advertising through social media

Our team as found that the customer base will increase as marketing techniques are executed via
discounting products, offering multi-buying options, attacking the busiest hour of the day and advertising
through social media.
Research Methods
As a team we sent out to find the best way of using discounting and promotions to increase the
number of customers and profits for Perkys Espresso. In order to accomplish this goal, we set four tasks
that we felt were the most important to answer.
Task #1 Determine the benefit of discounting products
Task #2 Determine the most beneficial way to offer discounts/promotions
Task #3 Determine the best time to hold a promotion
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Task #4 Determine the best social media to communicate to customers about promotions
Task#1 Determine the benefit of discounting products
In order to determine if there are indeed beneficial effects to profit by creating discount
promotions research was done. We found multiple articles that gave insight into this from multiple
professionals. The data gathered from the periodic journals as well as studies from some of the leading
firms in marketing and advertising analysis allowed us to draw a well informed decision.
Task #2 Determine the most beneficial way to offer discounts/promotions
Research had to be done in order to find the most efficient way to offer these offer
discounts/promotions to customers. In order to do this articles were located that were written by industry
leading experts in the field of both small businesses and coffee shop operations. We went with both coffee
shop and non-coffee shop input in order for use to have the widest range of impute that we could in order
to facilitate the best recommendations that we could.
Task #3 Determine the best time to hold a promotion
Timing is everything and we needed to know when the best time would be to have daily deal or
time sensitive deal. In order to make a well informed prediction on when the best time would be to have a
promotion traffic data was collected on the area. Along with this research was done in order to locate and
statistics on the coffee drinking habits of people that had been collected. From this data patterns were
identified and analyzed for the maximizing participants.
Task #4 Determine the best social media to communicate to customers about promotions
We needed to find that best method to communicate to customers about promotions. In order to
do this data was collected the cost of advertising and benefits to small businesses. As well data was
collected on demographics of people who drink coffee and people that use different social media sites.
This data was used to determine the benefit of its use a form of communication.
Results
After spending some time researching this topic we ended up with a large assortment of data and
articles to reference. All of this data was analyzed in order to completely answer the tasks.
Task #1 Results Determine the benefit of discounting products
From the data collected it was determined that discounting is beneficial to you profit margins if it
is done in the proper amount. The main benefits to small business that come from discounting are the
attraction of new customer to shop at your establishment, as well as the encouragement of undecided
customers to make added purchases. Discounts have also been found to entice past customers that have
not been back for some time become active once again.
Task #2 Results Determine the most beneficial way to offer discounts/promotions
In this situation marketing advisers agree that multibuy promotions are the most effective. A
multi-buy promotion can be a few different things, it can consist of a buy one get one free or a buy one
and save so on the second one. What this promotion does is drive sales at other products and one of the
key items to a successful business and or coffee shop is multiple sales. Promoting multiple sales is

important as it funnels consumers at the higher profit items. Most advisers set the goal of coffee shops as
having no more than 40% of sale be coffee.
There are also multiple studies demonstrating the beneficial effects of the use of loyalty cards.
With these cards businesses are able to pass on discounts to repeat customers. Studies have found that
repeat customers spend 67% more on a purchase. A combination of these two tactics would result in a
strong program of customer recruitment and customer retention.
Task #3 Results Determine the best time to hold a promotion
From the data collected it was determined that the most active times of the day as predicted were
early morning and late afternoon. These time are justified by the fact that this is the time that most of the
population are in transit to and from their jobs. As well for the same reason the weekdays tend to see a
more predictable similar pattern as the most active time. This is right on track with data that was
collected on people drinking habits of coffee. It was found that of the people that drink coffee 81% of
them do so at breakfast.
Task #4 Results Determine the best social media to communicate to customers about

promotions
All the data supported the use of social media as the most cost effective way to send promotional.
Facebook seemed to be the most used and suggested format in connecting to customers and potential
customers. This method has been proven as a useful tool by many companies like Starbucks. Multiple
studies have found that the use of a Facebook page is far more effective advertising tool verses email and
newspaper ads.

Conclusions
In this section, we provide the conclusion that we made based on the conducted researches and their
results
The benefit of discounting products
Table 1 shows the relationship between Amount of Discount and Gross Margin which are usually used in
marketing. According to the results we conclude that the discounting will increase substantially the
overall profit of Perky's Espresso company. So, this type of discounting is very effective for this company.
The most beneficial way to offer discounts/promotions
According to our research, we conclude that the use of multiple sales proves to be effective especially if it
is used with other types of involvement of the customer, such as a loyalty card. After the customer
becomes a regular frequenter of Parkys Espresso, he or she will also purchase products without
discounts, and with time this tactic will start to bring many benefits.
The best time to hold a promotion
Results presented in the report indicate that the time and day of the week have a significant effect on the
sale. The table 2 allows us to see the overall picture of the activity of drinking coffee in various coffee
houses, therefore we conclude that we should use this information to attract customers at the less popular
hours of the day.
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The best social media to communicate to customers about promotions

According to the data, about 72% American users of Internet have their account on Facebook (Table 4).
We conclude that this system of social communication between people dominates among social networks.
And we also conclude that its most appropriate to achieve our target group.
Recommendations
We recommend that Perkys Espresso follow these recommendations.
To attract more customers, we recommend to use discounting of 10%, given that the initial cost is roughly
$ 5.00 per 16 oz drink, the final product price should be $ 4.50. Because the lowest sales occur during
evening and dinner hours (15% and 12%, Table 2), we recommend to make promotion sales during these
hours. It will also bring benefits because young people use to communicate at coffee house in the
evenings, so they are more likely to buy drinks at discounted price.
We also recommend to use the multi-buy promotion with loyalty card program which will keep regular
and attract new customers, and this will also allow our consumers to spend 67% more on a purchase.
Advertising services provided by Facebook, are also very useful for Perky's Espresso. With Facebook Ads
we would promote a post or page. We recommend to use Facebook to launch your menu, you would
invite customers to share photos of their favorite drinks with the hashtag #PerkysEspresso. Using
Facebook to attract new customers and to improve customer service is essential to the growth and
stability of your business.

References

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Coffee drinking consumers in the U.S. by age group, 2015 | Statistic. (n.d.). Retrieved April 09, 2016,
from http://www.statista.com/statistics/250091/coffee-drinking-consumers-in-the-us-by-age-group-2010/
Coffee drinking consumers in the U.S. by time of day, 2015 | Statistic. (n.d.). Retrieved April 09, 2016,
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Gottsman, D. (2014, June 3). 5 Common Business Card Myths. Retrieved April 09, 2016, from
http://www.huffingtonpost.com/diane-gottsman/five-common-business-card_b_5440295.html
What's The Secret To A Successful Coffee Shop? (2012, December 20). Retrieved April 09, 2016, from
http://www.forbes.com/sites/quora/2012/12/20/whats-the-secret-to-a-successful-coffeeshop/#43a32ddf46d3
Williams, J., & Swanciger, J. (2014, April 25). Why Small Businesses Should Be Utilizing CustomerLoyalty Programs. Retrieved April 09, 2016, from http://www.entrepreneur.com/article/233362
Bailey, D., & Woodall, B. (2010, April 01). Discounts drive auto sales rise, Toyota surge. Retrieved April
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Appendices
Table 1 How discounting affects your sales targets

Table 2 Share of coffee drinking consumers in the United States in 2015, by time of day

Table 3 Share of coffee drinking consumers in the United States in 2015, by age group

Table 4 The Demographics of Social Media Users

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