Marketing Project: Coffee Shops A Pilot Usage and Attitude - Essay Example

? MARKETING RESEARCH PROJECT: COFFEE SHOPS – A PILOT USAGE AND ATTITUDE STUDY Table of contents Introduction............................................................................................................... 2 Methodology……………………………………………………………………….. 3 Research objectives…………………………………………………………………3 Key findings…………………………………………………………………………4 Conclusion and recommendations…………………………………………………7 Appendices…………………………………………………………………………..8 Questionnaire design………….…………………………………………………….8 Data collection……………………………………………………………………….10 Data analysis…………………………………………………………………………10 References……………………………………………………………………………11 Marketing Research Project: Coffee Shops – A Pilot Usage and Attitude Study Introduction: Coffee shops are commonly defined as establishments that primarily serve prepared coffee along with light snacks. From a cultural point of view, coffee shops serves as centres of social interaction where individuals especially youths are provided with a place to congregate, talk, read, write, entertain one another. As defined by Mintel (2009), coffee shops are shops where “coffee is the primary sales item. They are based on the European and North American coffee shop models, typified by Starbucks, Costa Coffee, Cafe Nero and Coffee Republic and offer a wide variety and different types of coffee, e.g. cappuccino, latte, mocha, etc. Other items are usually on sale, such as pastries, tea, coffee beans, etc. However, the food offer may be restricted.” Further, the operational venues of these coffee shops are also of relevance: “Coffee shops include venues such as individual stores, kiosks and concessions. These may operate in a number of locations – motorway service areas (MSAs), health clubs and hospitals, for example. However, they must be independent of the facility they are located in.” (Mintel, 2009) This paper briefly addresses the report of a pilot study on the usage and attitude of coffee consumers, especially young consumers. The data collection for the survey report has mainly been conducted in big coffee shop brand names such as Starbucks and Costa Coffee from the localities of London. The data was collected from 20 young people aged 18 and above, along with a well-structured questionnaire designed on the basis of the usage and attitude of the young coffee consumers. Moreover, the paper looks into the broader picture of coffee shops market in the UK. It briefly provides the current scenario of the UK coffee shops market, which is now considered a booming market contributing remarkably to the UK economy. While competition is getting tougher, the usage and attitude of the young coffee consumers are becoming significantly essential for the coffee shops in order to accomplish competitive advantage. Methodology: Coffee shops are growing faster and wider, thanks to the novel process of globalisation. With the level of market competition growing fast, there is also a growing need of more variables to be included in the market analysis of coffee shops. The study included in this paper is a pilot survey designed to test the questionnaire and the survey approach and to produce some exploratory information which may be of interest to marketing decision makers. The survey conducted for the purpose comprised of 20 young people (aged 18 and above) and students, to be administered by respondent self-completion. In order to explain the behavioural and attitudinal information of the young consumers of coffee shops, the survey has collected data from both males and females, and coffee shop users and non-users as well. Research objectives: The primary aim of the coffee shop project is to provide information regarding the likely usage of a new coffee shop outlet by the target market and their desired product range and service provision. The pilot survey was conducted with the specific objectives mentioned below. The behavioural and attitudinal information of the coffee shop users was mainly collected in order to: 1. Identify and measure current patterns of coffee shop usage and purchasing among young people as well as students in a specific area. More specifically, the questionnaire was designed to get information on their frequency of and source of purchase, product line purchasing and amount of expenditure. 2. Assess the attitudes of young people and students towards the development of a new coffee shop outlet in the respective locality. The questionnaire was designed particularly to provide information on their desired product range and retail service provision as well as their attitudes to existing coffee shop providers. Key findings: The market research of the coffee shop project was conducted mainly with the help of a brief market study of two big brands of coffee shop operators – Starbucks and Costa Coffee. The pilot survey conducted in London identifies the most relevant marketing findings which would be of interest for the proposed outlet of the new independent coffee shop operator. Before coming to the major findings of coffee shops in London, a comprehensive picture of the UK coffee shops market is essential for this project. As reported by Mintel (2009), the UK coffee shops market has experienced an unprecedented boom during the past five years as the major branded multi-site operators have pursued an aggressive strategy of nationwide expansion in their quest for market leadership. More particularly, competition is getting tougher as there are a large number of independent operators on the high street as well. These outlets may not benefit from economies of scale, but their greater flexibility and arguably more personal touch may see their revival as chains start to feel the strain. The focus of the coffee shop operators is definitely on the young generation or students as this is the strongest and most competitive target market. Competition in the UK coffee shop market started way back in 2004 with the promotion of the regional expansion of key chain outlets of branded coffee shop operators in London. As observed by Euromonitor (2005), 2004 was the milestone year for key coffee shop brands in the UK that involved in high-rise competition as they picked off high traffic sites as their prime operating locations. Choosing the location was important in highly impacting the consumer behaviour and attitude in the coffee shops. The dominant players in the coffee shop market of the UK were Starbucks, Costa Coffee and Caffe Nero (Euromonitor, 2005). With more than 400 outlets in prime locations of the UK, Starbucks is the leading brand in the coffee shop market. Following the growing competition in the international market, the latest trend to have been adopted by the coffee shop operators is the integration of other beverages and food items with coffee. Operators are now focusing more on boosting average spend per customer by offering food items with coffee products. Euromonitor reported that major coffee shop operators such as Starbucks and Caffe Nero offer food items targeting breakfast, lunch and snack times with indulgent-to-healthy alternatives. Moreover, integration with music companies and stores is another bonus point for these coffee shop operators. Of late, Starbucks started offering music sold exclusively in-store as a competitive strategy for its international marketing. So, in a way, coffee shops have been emerging more as youth junctions full of food, music, and of course, coffee. As the competition goes higher and stronger, the brand names in coffee shop operators are bound to adopt and implement more strategies derived by innovation as well as consumer needs. Special focus of the coffee shops is now more particularly on the younger generation. According to Allegra’s annual study of the UK coffee shop market (Weston, 2010), the branded coffee shop segment of the UK accomplished an impressive sales growth of 12.9% last year. As consumers are now privileged to have a wide range of venue choices, Weston further provides a rather happy picture of the statistics of the UK coffee shop market in 2010 alone (Weston, 2010): Market value – ?5bn Market size – 14,022 outlets (including branded chains like Starbucks and Costa Coffee, independents and non-specialist operators) Sales growth – 12.9% Growth of branded chains – 6.1% Overall outlet growth – 54% Coming to consumer trends, coffee shops are an integral part of the British lifestyle. With a larger number of younger consumers coming in, the coffee shops are now more concerned with evolving consumer demands in order to retain leadership in the coffee shop market. This was particularly significant with regard to branded coffee chains as the competition was from both within as well as outside the coffee shop market. With non-specialists like McDonald’s growing in coffee and other beverage products, branded chains have been proactive to continue with better innovation, experience and coffee beverage quality. Along with the quality concerns, young consumers’ focus was also on a relaxed and comfortable environment. The revitalisation of in-store environments is indeed relevant in order to create a unique as well as inviting retail space which further would increase consumer loyalty and frequency. A more technical point in concern was the implementation of advanced technology in order to increase sustainability awareness. For instance, online shopping is the current buzzword among younger consumers. As the survey found out, the treat-driven young consumers were more interested in online shopping activities as it provided them with more opportunities for peripheral products and services. Turning our attention from the general picture of the UK coffee shop market to a more particular survey report conducted in the branded coffee shop operators in London including Starbucks and Costa Coffee, the survey has made the following observations: Selecting a location for the coffee shop outlet is important as it strongly influences its marketing success. Integration of food items along with other beverages besides coffee is definitely a winning combination for the coffee shop outlet. Innovation is the buzzword for coffee shop outlets when it comes to in-store decor and creating relaxed ambience for the young consumers. Optimum use of advanced technology is important for the outlet to retain its stronger position in the coffee shop market. As coffee shops are fast becoming the most wanted comfort zones among the younger generation, it is high time for coffee shops (even branded names) to innovate as well as implement competitive strategies in order to retain leadership in the coffee shop market. With globalisation becoming more familiar and frequent, the younger crowd demands better in everything including coffee and even beyond that. Most particularly, coffee shops are getting wider popularity among the youth with the concept of ‘integration’ – that is – integrating coffee with food and snacks, and music and books, and the demand list is growing higher and higher. Conclusion and recommendations: Having thoroughly observed the UK coffee shop market, it is important to note that the market is here to stay for longer period. That is to say, competition is there to stay and grow higher. Further, innovation is the key to success in this market. With more and more youths accustomed to getting newer and better coffee shop outlets, there are a number of variables to be addressed and discussed in the strategy analysis of coffee shops, and to be implemented appropriately for retaining leadership in the market. While focus is on the youth, strategies should incorporate a number of key issues including product quality concerns, technological aspects, and current market trends. In brief, the following issues should be addressed by a coffee shop operator while planning for an outlet in a prime location or student area: Focus on quality product delivery Create a student-friendly and comfortable environment in-store Adopt highly advanced equipments for better and quality production of coffee Integrate light food and snack items with coffee products Select food and beverage items according to the requirements of young crowd Offer online shopping for customers with discount package on wide range of items Provide in-store shopping facilities in terms of collaboration with music stores With coffee shops becoming more frequent hangout zones among the youth, it is significant for new coffee shop outlets to work more on the aspects of innovation as well as quality. Because, in the long term, there is a strong possibility of a broader and bigger UK coffee shop market along with greater revenue and more international exposure. Therefore, thinking of a youth-friendly, innovative and quality-driven coffee shop outlet is the key word. Appendices: Questionnaire design: The questionnaire for the pilot survey was designed and developed to form specific and detailed information requirements for the classification, behavioural and attitudinal information to be obtained by this study. Following is the questionnaire for the study. 1. How often do you frequent coffee shops? Daily Weekly Monthly Less than once per month 2. On a scale of 1-5 (5 being the highest), how important are the following qualities to you when choosing a coffee shop? 1 2 3 4 5 Atmosphere: Noise level: Price: Selection: Quality of coffee: Wi-Fi accessibility: 3. Please indicate which one of the following types of coffee you use most and which one you prefer most: Used most Preferred Instant: Freeze-dried: Filter coffee: Instant decaffeinated: Ground decaffeinated: Please indicate your answer using the following 5-point scale where: 1 = strongly disagree 2 = disagree 3 = neutral 4 = agree 5 = strongly agree 4. I prefer drinking tea to drinking decaffeinated coffee. 5. Drinking coffee gives me an energy boost. 6. I drink coffee because my friends do. 7. I drink coffee for the taste. 8. I drink coffee because it is fashionable. 9. Drinking coffee relaxes me. 10. I drink coffee to help me stay awake. 11. I prefer local brands of coffee to imported ones. 12. Drinking coffee makes me feel important. 13. I drink coffee because I like the environment of the coffee shop. 14. I choose my coffee on the basis of price. 15. I choose my coffee shop on the basis of the discounts they offer. 16. I choose my coffee shop on the basis of fresh salads and snacks they offer. 17. I prefer national chain coffee shops to privately owned coffee shops. 18. I prefer making online order to personally buying my coffee and snacks. 19. I prefer drinking tea to drinking any type of coffee. 20. I cannot fall asleep when drinking coffee in the evening. Data collection: The questionnaire for the pilot survey comprises of 20 self-completed questions. The data has been collected from 20 young people (10 males and 10 females) aged 18 and above and students. The categorisation of the data also included 2 major segments of male coffee consumers and female coffee consumers along with coffee shop users and non-users as well. Data analysis: So far as the questionnaire is concerned, the students and other young coffee consumers have responded in a rather ‘conscious consumer’ manner. To the first question, weekly visit to the coffee shops was the most common response from the consumers. A small but significant 5% of the consumers responded that they make a daily visit to their favourite coffee shops as a means of friends’ meeting zone. Most of the coffee lovers (a remarkable 89%) pointed out atmosphere as well as price value of the coffee shops as significant factors in selecting their coffee shop outlets. There was an evident variation over the selection of the coffee type as the respondents preferred as well as used most of them (question 3). Coffee houses are selected most commonly on the basis of whether they are considered as the best hangout zones by the fellow students among the peer groups. Thanks to the growing dimension of globalisation, big brands are now venturing into the international coffee market. That is to say, students’ preference of branded coffee shop outlets to local shops is a familiar sight among the younger generation. Along with that, online shopping is also becoming a kind of crave among the youth as the latter is a hard-core party crowd who want their own private space and venue. References: 1. Coffee Shops - UK - February 2009, Mintel, viewed 12 March, 2011, . 2. Coffee Shops in the UK 2005, Euromonitor International, viewed 12 March, 2011, . 3. Coffee Usage and Attitudes at Starbucks, Dunkin’ Donuts and QSRs 2007, Sandelman & Associates, viewed 12 March, 2011, . 4. Cohen, W. A. 2006, The Marketing Plan, Wiley & Sons, London. 5. Costa Coffee, . 6. Debelak, D. 2000, Marketing Plan, Streetwise, Avon. 7. Hassanien, A., Dale, C. and Clarke, A. 2010, Hospitality Business Development, Butterworth-Heinemann, Burlington. 8. Pham-Gia, K. 2008, Marketing Strategy for Starbucks Coffee, GRIN Verlag, Norderstedt. 9. Starbucks, . 10. Weston, S. 2010, UK Coffee Shop Market Reaches All-time High, FoodBev, published 17 December, 2010, viewed 15 March, 2011, . Read More