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1.0 QUESTION 1
1.1 CONCEPT
1.1.1 INTRODUCTION
A concept of a business establishment is the symbol depicted by the total
impression or image of the establishment and they are secured by every aspect of
the establishment so as to appeal to a particular segment of the market. However,
in order to successfully define a concept, it is crucial to work through the right
framework on which the image of the establishment can be suspended. The
framework that is referred to are explained as below:

1.1.2

CONCEPT & MARKET

Caf 8ighty 7even has a very unique but somewhat unclear concept. The caf
specializes in serving high-grade brewed coffee at an affordable price in a nice
warm and cosy ambience. Their market can be divided into three parts, which are
the working adults, students and lecturers in the college. However, the biggest
portion of their market segment is derived only from the students within the
SHTCA faculty that is located in the basement of KDU University College. On
the other hand the establishment also acts as a training ground for students to
learn about caf operation by acting as a part time staff and coffee preparation as
a barista.

1.1.3

LOCATION
Caf 8ighty 7even is located at the lower ground floor of KDU University
College under the SHTCA faculty. The caf is positioned opposite the
Charcuterie (Butchery Kitchen) and sits beside a training restaurant called
Saveur. The caf is also conjoined with the Boulangerie 2 (Bakery Kitchen 2)
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with glass windows in the caf overlooking the inside of the Bakery Kitchen 2
contributing to an open kitchen concept.
1.1.4

MANAGEMENT
Currently, Mr Fuad, who is a full time college tutor, is the sole chief person
managing the caf. In addition, he is also currently responsible for the training of
students to manage the caf (server, cashier, etc) and coffee preparation (barista).

1.1.5

ATMOSPHERE
Caf 8ighty 7even promotes a warm and cosy ambience through a combination of
lighting, wall colours as well as the big comfy chairs positioned within the small
space of the caf. Though space can be quite limited, the feeling of space
constriction is eliminated by the glass window overlooking the insides of Bakery
Kitchen 2, which creates a sort of an open kitchen concept contributing to a
unique environment that generates an illusion of sitting in a wider space area.

1.1.6

MENU
Caf 8ighty 7even currently serves a wide range of coffee menus using highgrade coffee beans called Mokka, which is a combination of the Robusta and
Arabica coffee beans by Coffex. Their coffees are also prepared using a top grade
coffee machine from La Cimbali.

1.1.7

FOOD
Caf 8ighty 7even only offers a limited amount of light food that include
sandwiches, pastries and cakes at the moment and the availability is heavily
reliant on the classes held within the faculty to produce the food.

1.1.8

PRICE
The coffee menu in Caf 8ighty 7even starts from RM 4 to RM 8 while their light
food ranges from RM 3 to RM 7.

1.1.9

SERVICE
Caf 8ighty 7even has a very unique service operation. The caf starts of as a
self-service operation at the beginning of everyday (10 am to 1 pm) as Mr Fuad is
the sole chief person responsible for managing the caf. However, the Caf
8ighty 7even transform its service operation to a more table service operation
starting from the afternoon till closing (1 pm to 4 pm) as students starts their
training in the Caf and the students will be responsible of managing the caf
with the assistance of Mr Fuad.

1.1.10 QUALITY

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If we look at their main selling product, which is the coffee, Caf 8ighty 7even
should be serving good quality coffee because they are currently using high-grade
coffee beans (Mokka by Coffex) and the coffees are prepared using top grade
coffee machine by La Cimbali. However, the quality of the coffee is inconsistent
as the quality differs from one barista to another. Equally, the service quality
differs from the morning section than the evening section as Caf 8ighty 7even
operates using two separate styles of service operations throughout the day.
1.2 TARGET MARKET

Target Market

Working
Adults

Students

Lecturers

Neighbourho
od Offices

SHTCA

SHTCA

The biggest target market for caf 8ighty 7even is currently the student. Because
of the location of the establishment, most of the students who dine in the caf
normally come from the SHTCA faculty. The second target markets are lecturers
of the KDU University College who normally originates from SHTCA faculty as
well. The third target market according to Mr Fuad would be the working adult
who comes from the nearby offices in the neighbourhood.
1.3 SEGMENTATION VARIABLE
1.3.1 GEOGRAPHIC DIFFERENCES
The location of Caf 8ighty 7even at the moment is uniquely located at the Lower
Ground floor of the university. Due to this we could say that the caf would be at
an advantage as they would be able to attract students from within the SHTCA
faculty and this can be categorize as a captive market. On another perspective, the
location of the caf can also be seen as a disadvantage. As the location of the caf
is fairly hidden, this would in turn make the caf to lose its visibility power
towards the main public that includes students and lecturers from other faculties
within the college.
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1.3.2

BENEFIT DIFFERENCES
With regards towards students and lecturers within the SHTCA faculty, they
would have a benefit difference compared to other target market, as they would
be able to dine in the caf in between classes because of the close vicinity of the
caf.

1.3.3

DEMOGRAPHIC
Through our research we have found out that the main target market for caf
8ighty 7even comes down to three parts, which are the students, lecturers, and
working adults from neighbourhood offices.

1.3.4

PSYCHOGRAPHIC
The people who dine in caf 8ighty 7even can be portrayed into three separate
psychographics. Firstly, an extensive portion of the target market tends to be
characterised as coffee lovers. These sorts of people usually go to the caf to
enjoy their cup of coffee as they truly have an appreciation and passion towards
the coffee. Besides this, another portion of the target market are not so much of a
coffee lover but they just have a tendency to follow the friends or classmates to
dine in the caf. We regard these people as the followers. The last portion of the
target market falls under the term known as trendies. This basically refers to those
sorts of people who are most likely present in the coffee scene because of
trending.

1.4 BUSINESS STRATEGY

Caf 8ighty 7even has a very unique business operation. Mr Fuad who is a full
time tutor operates the caf as a one-man show from a day-to-day basis. However
the caf also acts as a training ground for students to learn about caf
management and coffee preparation as a barista. In order to sustain the caf, the
caf separates its operation between two types of services, which are self-service
and table service. As Mr Fuad operates the caf by him self in the morning the
caf starts its operation everyday from 10 am to 1 pm as the self-service operation
due to the lack of staff. Because of this, the caf environment is more
personalised during that time as customers are usually seated at the counter and
makes it more convenient for the barista and customers to communicate. Mr Fuad
then builds a closer relationship with his customers that would attract them to
come back to dine in the caf. Between 1 pm 4 pm, caf 8ighty 7even
transforms its service to the table service, which acts as training ground for
students. The caf will than be operated in a proper caf management flow as
students are trained to greet the guests, usher the guests to the table, open a
captain order, fire the order and deliver the order straight to the customers table.

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Caf 8ighty 7even business strategy can be defined as a unique selling point. The
unique selling point otherwise known as USP refers to a unique factor that
differenciates the product from its competitors. If we look into Caf 8ighty 7even,
they are currently using Mokka coffee beans, which is a combination of Rabusta,
and Arabica coffee beans. This kind of coffee falls under the high-grade coffee
supplied by Coffex Company. Despite this, caf 8ighty 7even sells their coffee at
a lower price (RM 4 RM 8) compared to its main competitor- DEBE (RM 6
RM 12). Besides this, the coffees in caf 8ighty 7even is prepared by a certified
barista which we can regard as an expert in preparing good coffee. On the other
hand, while its location can be a disadvantage for some, it can also be beneficial
for others. The caf tends to have a captive market, as its location would attract
consumers from within the faculty areas. From all this, we can say that caf
8ighty 7even offers coffee conveniently, prepared by an expert and they are sold
at an affordable price. Apart from this caf 8ighty 7even promotes its caf by
handing out flyers and posters. They also appear on social media platform such as
Facebook to promote themselves. In addition to that, they also provide delivery
services known as room service, whereby lecturers are able to call and place
their order and the caf staffs will deliver to the respective offices within the
college.

1.5 PORTERS FIVE FORCES OF COMPETITION

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Threat
of new
new
Threat of
entrants
entrants
Low.
Location situated
Low. Location
situated
in
in college
college campus
campus
causes
of
threat
causes of threat of
of
new
entrants entering
new entrants
entering
low
due to
to limited
limited
low due
space
space

Bargaining
power of
Bargaining power
of
suppliers
suppliers
Fairly
to
Fairly high.
high. Due
Due to
Coffex
are the
only
Coffex are
the only
coffee
coffee supliers.
supliers.

Competitive
Competitive
Rivalry
Rivalry
DEBE-a
cafe
DEBE-a cafe
which
sells a
a
which sells
similar
similar
product.
product.

Bargaining
Bargaining power
power of
of
buyers
buyers
Low.Quality
Low.Quality breed
breed
coffee
coffee beans
beans are
are
used,
the
coffe
used, the coffe is
is still
still
charged
at
a
lower
charged at a lower
price
price compared
compared to
to its
its
compatitor.
compatitor.

Threats
of
Threats of
substitution
substitution
Vitamin
Factory-Fruit
Vitamin Factory-Fruit
juices
juices
7Eleven-tin
7Eleven-tin and
and
packed
packed drinks
drinks
Cafeteria
Cafeteria

Competitive Rivalry
The current competitive rivalry for caf 8ighty 7even is fairly low as there is only
one main competitor, which is Debe. Debe is a coffee shop offering good coffee
using Grande coffee beans, a blend between Rabusta and Arabica, which is very
similar to Mokka coffee beans, used in caf 8ighty 7even.
Threat of New Entrants
Threat of entrants is low. This is because KDU University College location has
space limitation for new businesses to appear within the campus. Besides this, the
barrier to entry is rather high, as new businesses are required to go through rules
and regulations imposed by the college.
Threat of substitution
There are few products of substitute that exist within the college and they are
Vitamin Factory (fruit juices), 7eleven (assortment of beverages), cafeteria
(assortment of beverages).

Bargaining power of buyers

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Bargaining power of buyers is reasonably low. This is because Caf 8ighty 7even
uses quality breed of coffee beans used but charges the coffee at a lower price
compared to its competitor-Debe.
Bargaining power of suppliers
Bargaining power of suppliers is relatively high as Coffex Company are the main
and only coffee bean supplier for caf 8ighty 7even.
2.0 QUESTION 2
2.1 MOLECULAR MODEL
Distribution
Price

Teaching/Training

Expertise

Certified Barista

Personalised Service

Atmosphere

Student

Coffee

Table Service

Coffee Counter

Training Platform

Experience

Open View Kitchen

Light Food

Tangible

Market Positioning
(Weighted towards evidence)

Intangible

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2.2 MARKETING MIX

For this part, we will be explaining on the areas that have potential to be
strengthened for service marketing by using the servuction model.
Servicescape- The physical evidence found in caf 8ighty 7even which
contributes to the service environment, for instance the furniture and design of
the caf have potential to be strengthened because caf 8ighty 7even is designed
more in a pantry way rather than a proper caf design which affects the delivery
process. Besides this, space utilization could also be strengthened as the seating
capacity is also limited as to the design of chairs are very big and takes up much
of the cafes space.
Contact Personal- We feel that the contact personal have potential to be
strengthened as Mr Fuad is currently running a one-man show to manage the caf
in the morning and he has limited full time staffs. Service provider can also be
strengthened as currently the service provider/contact personal for caf 8ighty
7even are treating students as students rather than a customer.
Invisible Organization and systems Invisible organization and systems has a
bigger potential to be strengthened because on top of operating as a commercial
caf business, caf 8ighty 7even also acts as a training platform and Mr Fuad is
currently the only fulltime staff managing the caf.

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3.0 QUESTION 3
3.1 INTRODUCTION TO TACTICAL SERVICES MIX

The tactical services mix is a more complex version of the traditional business
tool of marketing commonly used by marketers known as the marketing mix that
is associated with the four Ps: Product, Price, Place, Promotion. For this
particular section, we will be explaining caf 8ighty 7even current positioning by
using the tactical services mix.

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3.1.1

SERVICE QUALITY
Service quality refers to the overall evaluation of the firms performance in
delivering the goods and services to the consumers. There is a strong
correlation between service quality and customer satisfaction. Simply put,
when the quality of the services is good than the customer will be satisfied.
In relation to caf 8ighty 7even they tend to have a large service gap. This
service gap we refer to is composed of four combinations of gaps and they
are explained as below.

Gap 1

Gap 2

Gap 3

Gap 4

The Knowledge Gap

Difference between what consumers do expect and
management perceives that consumers expect.
(i.e. An actual situation happened whereby a customer
inquired to the caf staff for a piece of scone.
Unfortunately the staff replied that he doesnt know
what a scone is.)
The Standards Gap
Difference between what management perceives that
consumers expect and the quality specifications set
for service delivery.
(i.e. An actual situation happened whereby a student
was seating in the caf with a friend was suddenly
asked to leave as they did not make an order. Instead
of approaching politely they were approached in a
rude manner.)
The Delivery Gap
Difference between the quality specifications set for
service deliver and the actual quality of service
delivered.
(i.e. An actual situation happened whereby the
operation flow became unclear as different customers
went through different ordering processes which
caused confusion.)
The Communication Gap
Difference between the actual quality of service
delivered and the quality of service described in the
firms external communication.
(i.e. An actual situation happened whereby the price
of goods are not displayed to customers through their
menu.)

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3.1.2

CUSTOMER SATISFACTION
Customer satisfactions basically are the customer expectations to perceptions
regarding the actual service encounter. The customer satisfactions are deeply
affected by the quality of service given from the contact personal or the service
provider. In relation to caf 8ighty 7even they have two different operational
flows. Everyday from 10am to 1pm Mr Fuad manages the caf alone. Due to this
the service operation of caf 8ighty 7even operates more to self-service.
Conversely, from 1pm to 4pm the caf operates more towards table service as
students are trained to serve the customers while others are trained to prepare the
coffee using the coffee machine. From this we could say it affects the customer
satisfaction as different employee has different level of delivery of service.

3.1.3

SERVICE FAILURE & RECOVERY STRATEGIES

It is important for us to identify the breakdown in the delivery of service of a
business establishment in order to respond with the appropriate service recovery
to counter the customers complaint resulted from customer dissatisfaction from
the delivery of goods/services. In relation to caf 8igty 7even the service failure
that theyre currently facing is tied to wastage. Caf 8ighty 7even uses high-grade
coffee beans to prepare their coffees. As the caf acts as a training platform for
students, it would be natural for wastages to occur at a considerable level. These
wastages can be costly to the establishment and would ultimately contribute to
the service failure in the long run. Because of this, caf 8ighty 7even has tried to
counter act by selling light food (pastries, cakes, sandwiches) to compensate the
costs incurred by the wastages. However, according to Mr Fuad their counteract
is not aiding the recovery of their costs suffered from wastages as they are greatly
reliant on classes held within the SHTCA faculty to produce light food for the
caf.

3.1.4

CUSTOMER RETENTION
From our observation we could say that Caf 8ighty 7even has very low customer
retention. Though they prepare good quality coffee for the consumers, they still
hold many flaws within the types of defectors, which includes price, service,
market, technological and organizational.

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3.1.5

CONCLUSION
By looking at all the things that have been discussed through tactical service mix
section above; we can conclude that caf 8ighty 7even has currently failed to
position themselves firmly in the eyes of the public as the leading coffee
establishment. This is mainly due to the caf not having a concrete business
strategy and a coordinated service operation. However, under the stages of
operational competitiveness, caf 8ighty 7even is currently at the first stage
known as available for service because their operations seems to be reactive
with a very minimal technological investment, training, and personnel costs.
Nevertheless, caf 8ighty 7even is slowly transitioning to the journeyman stage
because they are being more outward looking and thinking of more improvement
linked to the long term costs savings.