Review of Literature

          The literature that we have collected is a combination of sources from private IUPUI databases and Google Scholar. This literature will go over the best practices of small and successful coffee shops:

 

• Loyalty Programs

• Promotions

• Social Media Marketing 

  

The Use of Loyalty Programs and Promotions

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         Promotions and rewards programs are very common marketing strategies used in businesses that sell products. A Jeon and Yi, two researchers that are published in the Journal of the Academy of Marketing Science, state that, “According to the findings of the current study loyalty programs are important for building and maintaining customer retention” (Jeon and Yi). This means that building loyalty programs helps keep regular customers coming back for more. Berman, an author of California Review Management also discusses the benefits of a loyalty program. He claims, “There are a number of potential benefits to a well-run loyalty program like increased loyalty, lower price sensitivity, and stronger attitudes towards brand and retailers” (Bernman, 125). Jeon, Yi, and Bernman can all agree that when loyalty programs are used correctly, they keep customers coming back for more.

          Another way to build customer loyalty is through promotions. Magatef, a published author in the International Journal of Business and Social Science touches on how promotions can build the customer base. He states that, “Successful promotions get clients repeatedly coming back to the company due to its service” (Magatef, 79). Magatef believes that businesses should use promotions to get customers to come back due to their satisfaction with the deals. Bernman has a similar stance on promotions. He takes a slightly different stance by explaining how companies can, “Cross sell and sell up by offering extended warranties after an item is purchased, suggesting accessories, and providing discounts on related purchases” (Bernman, 130). This means that Bernman believes that offering sales on items related to an already purchased item can add onto the sale.

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The Use of Online Marketing 

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          Advertising has vastly changed in the past decade with increasing popularity in online advertisements. Business owners are taking to Facebook, Instagram, Tik Tok, and other popular social media websites to make free advertisements for their business. Adeleke, who completed her thesis on marketing strategies of successful coffee shops claims that “Social Networking offers small business leaders substantial communication benefits, empowers purchasers, and reduces marketing costs” Adeleke, 81) The benefits of social media marketing cannot be denied, it offers the company direct communication to the customer for free. Locket who completed her doctoral study on online marketing strategies for increasing sales in small retail businesses also agrees that social media is a growing and very beneficial marketing method. She states, “The implementation of social media renders small retail business leaders a chance to create ideal opportunities and facilitate brand connection with potential customers” (Locket, 23). Adeleke and Locket both agree that social media brings undeniable communication benefits to small business owners.

          While social media can be a very powerful tool for businesses, it has to be used correctly. Adeleke also states that, “The poor execution of marketing strategies and technology is one of the factors contributing to small businesses failure” (Adelke, 80). Adelke is aware that social media marketing can make or break a small business. Higdon, who also completed his doctoral study on strategies that independent coffee shops need to survive past five years, states “The lack of business strategies may influence the results of profit and community involvement” (Hidgon, 74).  Hidgon knows that in order for social media to be a successful tool, the owner needs to know how to effectively use it as a business strategy.

          Figuring out what social media advertisements work, and which ones do not can be a process, especially to business owners that are not familiar with social media. A solution to this is hiring a student intern to run a social media page. A study completed by Burke, shows that students appear to have more realistic expectations, have better self-insights insights into their own abilities, and report higher self-confidence (Burke). His study shows that young adults have more insight on how to market on social media and are more successful in hitting their target audience.  Schultz is also an advocate for young adults' ability to successfully run a social media page. His article discusses how students were able to develop and implement an integer-programming-based computerized method for forming teams (Schultz). He shows how young adults, especially those in business school are able to easily keep up with technology trends and know how to use them to meet their goals. Burke and Schultz would both recommend using a young adult who is technology aware is a more useful way to advertise on social media, rather than using someone who struggles to keep up with social media.