General Coffee Consumption in the World - Research Paper Example

Introduction Coffee is the most consumed beverage in the world, there are various types of coffee products in the world consumed especially in Europe and produced in labor intensive countries which are mostly third world countries. This analysis will focus on coffee consumption in the UK. Some aspects that will be addressed includes a general perspective about coffee consumption in the UK, a focus of store relevant to the product quality, relevance of service quality especially for coffee shops, a case study example of specialty coffee shops strategies created to attract and satisfy its clientele. A primary research on key drivers for the selected stores will also be conducted in order to establish consumer behavior relative to the key drivers selected by different stores. General coffee consumption in the world and specifically the UK According to Commodity Briefing (2012), coffee is undeniably the most traded and valued agricultural product in the world, in the year 2011, about 7.9m tonnes of coffee were produced and 6.2m exported. With exports amounting to $23.5billion last year alone coffee provides livelihood for 100 million people. About 1.6billlion cups are consumed worldwide daily, it is expected that the global consumption of coffee will hit 9 million tonnes by 2019 as speculated by Commodity briefing (2012). In the UK, the home coffee market is worth £831 million with 70 % of the UK retail coffee market being controlled by Nestle, Kraft, and Proctor & Gamble. The UK imports about 3.3 % of the global coffee which is about 184, 000 tonnes (Commodity Briefing 2012). Product quality and service quality for specialty coffee shops Ryding (2011) notes that customer satisfaction is considered to be an important competitive factor and a major indicator of a firms profit since it is directly related to the return on investment (ROI) and market value. Customer satisfaction is achieved when the customer’s expectation of the encounter is at par with the encounter. Customer satisfaction is both a process and an encounter (Monk& Ryding 2007). The modern business environment has become more and more competitive and hence forcing the players to constantly change in order to remain relevant to the ever changing market currents. The coffee market has not been left out, competition is forcing even the brands dominating the market to increase their innovation, customer experience and create strategic partnership in order to boost their sales. Case study examples of strategies adopted by specialty coffee shops in order to attract and satisfy customer’s needs According to Euromonitor International (2012) since the year 2004, there has been an expansion in the UK coffee market shops; this prompted the coffee shops to expand beyond the UK because of the market saturation. There are three main operators which dominate the UK market, Starbucks, Costa and Caffe Nero. Nero and Starbucks dominate the market; Starbucks leads with more than 400 outlets in the UK. The ever increasing competition has decreased its market share significantly. Competition has forces these operators to increase their value added services and offer food items alongside drinks. Starbucks particularly targets breakfast, lunch and snack with a careful integration of healthy alternatives and hence making it easier to expand within the market. Caffe Nero also offers food which has been essential to its core concept. Its integration of food saw its growth rate rise exponentially between the years 2001 to 2004 (Hassanien 2012). The company utilizes store ambience as a major differentiator, it also promote music with integrity which is enhanced via its strategic partnership with music. On the other hand Starbucks also sells music CD compilation in the UK. As noted Thomson & Baden-Fuller (2010, p.336) since Starbucks acquired Hear Music of Cambridge in 1999, its has produced many CDs for the company, in 2005 alone about 5 million CDs were sold in Starbucks. According to Sloane (2007) Costa Coffee has developed concessions with key partners over time, some of the partners include Abbey National banks, W H Smiths and Waterstores books sores among others. The concession is focused on offering high-quality coffee and other service experience that seeks to increase the experience of the customers visiting these partners. This additional service benefits both partners as customer are kept busy while waiting to be served. Other aspects that are driving the coffee industry includes increased innovation, reduction of cost and time to the market through established store which provide strategic placements (Tallon 2010, p.218). As noted by Dijkman (2008) other prufrock coffee, Notes Music and coffee, monmouth coffee stores have focused on various aspects in order to increase their market penetration and be in a position to fight against the major market forces. Customer focus and quality of the service has been the major market strategy, strategic placement especially for prufrock coffee has provided vital in its market survival (Godsmark, Arduser, & Brown 2004). Primary research for coffee store and shop Plan 1. Formulate questionnaires/surveys 2. Issue the survey questions to the selected sample group 3. Collect the responses within a time of 2 weeks. 4. Results and analysis 5. Research findings on the key drivers for store choice Questionnaires The following is the questionnaire completed and the number of correspondents selected for the survey was 20 people. The number of questions, 10 simple questions 1. What age group do you belong Age group Number Below 20 years 4 Between 20-30 5 Between 30-40 5 Above 40 6 2. Do you like coffee? Strongly agree 4 Agree 9 uncertain / neutral 5 Disagree 1 strongly disagree 1 3. Do you visit a coffee shop because of its brand name? Strongly agree 5 Agree 6 uncertain / neutral 4 Disagree 3 strongly disagree 2 4. Do you like listening to music while having coffee? Strongly agree 6 Agree 5 uncertain / neutral 4 Disagree 3 strongly disagree 2 5. What time do you like taking coffee? In the morning hours 6 In the lunch time hours 3 In the afternoon hours 4 In the evening 5 At any time 2 6. Do you visit a coffee shop because of their service quality and experience? Strongly agree 8 Agree 5 uncertain / neutral 3 Disagree 2 strongly disagree 2 7. Do you like taking food alongside coffee? Strongly agree 7 Agree 4 uncertain / neutral 4 Disagree 3 strongly disagree 2 8. Which coffee shop do you often visit? Caffe Nero 8 Starbucks 6 Costa 4 Other 2 9. Why do you visit the shop listed in number (5)? Their services are quality 6 They enhance the experience through their music 8 Because I love the brand name 4 prices 1 Not sure 1 10. Will you consider visiting another shop in future? Strongly agree 4 Agree 5 uncertain / neutral 4 Disagree 3 strongly disagree 4 Result an analysis 1. What age group do you belong? As evident, majority of the people above 20 years of age are the main consumers of coffee in the sample selected for anaysis. 2. Do you like coffee? Majority of the people chosen for the sample responded positively towards liking coffee and hence positive in the analysis of various aspect of consumer related coffee consumption. 3. Do you visit a coffee shop because of its brand name? Brand is a key consideration for most coffee consumers and hence a high response towards the brand. 4. Do you like listening to music while having coffee? As shown above, majority of the visitors like listening to music while taking coffee, this shows that consumers appreciate value added services while in the shop. 5. What time do you like taking coffee? Morning and evening hours are particularly prime time for coffee consumption in the majority of the sample group. 6. Do you visit a coffee shop because of their service quality and experience? Majority of the selected sample value service quality and experience and hence their reason for visiting the shop 7. Do you like taking food alongside coffee? Most people prefer taking coffee with other foods. 8. Which coffee shop do you often visit? Caffe Nero is the favorite shop among the majority of the correspondents. 9. Why do you visit the shop listed in number (5)? The reason for their visit is ther quality of service and due to enhancement of their experience due to the music integration. Most people also showed positive response towards the brand ans suprisingly low consideration of the price. 10. Will you consider visiting another shop in future? As evident from the above, the customer base is subject to change with additional services and other market factors since consumers are ready to visit other shops Research findings on the key drivers for store choice As evident from the simple survey, it is evident that the key drivers for store choice is service quality and enhanced experience such as integration of music and food alongside coffee consumption. The brand is also a driver in store choice. Conclusion As noted, customer satisfaction is a key driver in the coffee market. Value addition couple with integration of other services such as sell of music and food with coffee has proved essential in the UK market. The key market drivers such as Starbucks, Costa and Caffe Nero constantly adapt to the market changes in order to acquire additional market size or stay relevant in the competitive market. References Commodity briefing 2012, Fair trade and coffee, May 2012. Dijkman, M 2008, Retail Space Europe: assets, Trends and Market Players, Real Estate Publishers BV, London. Euromonitor International  2012, Coffee Shops in the UK, Accessed from http://www.marketresearchworld.net /index.php?option=com_content&task=view&id=118. Godsmark, E, Arduser, L & Brown, DR 2004, How to Open a Financially Successful Coffee, Espresso & Tea Shop, Atlantic Publishing Company, New York. Hassanien, A 2012, Hospitality Business Development, Routledge, Manchester. Monk, D & Ryding, D 2007,"Service quality and training: a pilot study", British Food Journal, Vol. 109 Iss: 8 pp. 627 – 636. Ryding, D 2011, The speciality coffee shop market – are today’s consumers demanding more than store ambience and good coffee from their consumption experience? Int. J. Business and Globalisation, Vol. 6, Nos. 3/4, P. 399. Sloane, P 2007, The Innovative Leader: How to Inspire Your Team and Drive Creativity, Kogan Page Publishers, London. P.113-115. Tallon, A 2010, Urban Regeneration in the UK, Taylor & Francis, London. P. 218-220. Thomson, N & Baden-Fuller, C 2010, Basic Strategy in Context: European text and cases, John Wiley & Sons, New Jersey. P.336. Read More