This paper details the pitfalls affecting Tom’s Coffee Cup, a local Baltimore coffee shop. Tom, the owner, has hired Justin Tyme, a self-employed management consultant, to examine why business at the coffee shop has faltered. We will evaluate the initial start of the business and what the business was doing correctly to produce profitable sales. Once changes were enacted by the new manager, Willie, business has suffered. The reasons behind the changes will be examined and the outcomes of the changes will be highlighted. Additionally, what Tom needs to enact to get his coffee shop running smoothly again will be examined and these changes will be implemented.
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This made customers aware that the new business was available for their coffee shop needs. Advertising puts the idea of the new product, Tom’s Coffee Cup, into a customer’s mind. When a customer is craving a hot cup of Joe, they may remember the ad they heard about Tom’s Coffee Cup on the radio. Advertising also increases Tom’s customer base, maybe people hadn’t seen or heard about the new coffee shop until they heard about Tom’s Coffee Cup on the radio. Tom’s advertising efforts also fights competition who may also be running ad campaigns themselves. As Tom’s brand becomes synonymous with exceptional quality food and coffee, advertising will also hold the business to a high standard of quality. Nobody hears or sees an advertisement from a name brand and goes to the business expecting poor service.
Tom also used high quality ingredients in all of his coffee beverages and food selections. His menu was also diverse enough to cater to the needs of a wide customer base. Customers are willing to pay more for the quality of a better product if they think the added cost is justified (Zeithaml pg.4). Tom’s initial growth and sales tell him as a business owner that the customers within his market are willing to pay the price increase. Tom’s Coffee Cup also needed to differentiate itself from other coffee shops within the area, and it did so by providing premium food selections and health conscious food options.
Once Tom’s business increased, he hired a new manager, Willie, to oversee the operation of Tom’s Coffee Cup. I believe that the first mistake that Tom made as a business owner is that he removed himself and his influence from the business. If Tom is going to own a coffee shop, he needs to be aware of what is occurring within the business. For Tom to not be aware of the changes that are occurring within the coffee shop is unacceptable. Especially on the part of the new manager, Willie.
Willie’s compensation plan for working at the coffee shop leads the manager to cut corners and cost at every chance he gets. The more money that Willie saves for the business, the higher his paycheck will be. While this may be a good theory in thought, Tom is now losing more money than he would have originally had he kept the service of the coffee shop at a high level. This is due to Willie’s greed in trying to increase his own personal paycheck, without giving a second thought about how his actions are affecting the business as a whole.
Unbeknownst to Tom, Willie also changed the coffee and food suppliers of Tom’s Coffee Cup. This in turn led to a lower quality product for customers. If customers do not see the justification of a higher price within the quality of a product, they will not buy it (Zeithaml pg.5). This is exactly what is happening; customers who used to come to the coffee shop regularly are no longer returning. A company’s product must also be consistent because customers are always expecting a certain level of quality...