Overview

For the Maven Coffee Challenge, I'll play the role of an Analytics Consultant hired by a group of investors aiming to enter the US coffee market. I'll leverage insights from "The Great American Coffee Taste Test" to provide a data-driven strategy for opening their first coffee shop. I've been tasked with sharing an explanatory report focusing on target audience, product offering, and pricing strategy alignment. The investors are particularly interested in understanding customer preferences and maximizing value perception.

Goals

1. Establish a successful entry strategy into the US coffee market.
2. Identify the target audience and understand their preferences to tailor offerings accordingly.
3. Determine the optimal product offerings, including types of coffee beans and drinks, to meet customer demand.
4. Develop a pricing strategy that aligns with customer value perception while remaining competitive in the market.

Business Needs

The business needs include understanding consumer preferences, gaining a competitive edge in the coffee market, and maximizing profitability and customer satisfaction for their new coffee shop in the US.

Methodology

The dataset from The Great American Coffee Taste Test was analyzed using Excel and the visualization using Power BI. I created two new tables to analyze the data.

1. First, I selected several variables related to customer and product analysis, such as Submission ID, Age, Cups/Day, Place Type when drinking coffee, Favorite Coffee Drink, Add-Ins to Coffee, Kind of Coffee Type, How Strong-Like the Aroma of Coffee, Roast Level, Caffeine Type, Coffee Expertise Rate, and Favorite Overall Coffee.
2. Next, I chose variables relevant to pricing and customer satisfaction analysis, such as The most paid spent for coffee, The most ever willing to pay for a cup of coffee, Feel like getting good value after buying a coffee?, How much have spent on coffee equipment in the past 5 years, Feel like getting good value for money with regards to coffee equipment.
3. After selecting the variables, I conducted data cleaning to remove null values or irrelevant values. Once the data was clean, I imported the dataset into Power BI for further analysis and visualization, creating an explanatory report as requested.

Key Findings

1. Target Audience: The primary demographic for specialty coffee is young professionals aged 25-34 who love to drink coffee from 1 to 3 cups per day, seeking customizable options and ethical sourcing.
2. Product Offering: The coffee shop should offer a diverse range of coffee drinks, including pour-over coffee, which was favored in the taste test. Light and medium roast options, as well as strong coffees with full caffeine content, were identified as the most popular preferences. Moreover, to accommodate various dietary preferences and needs, alternative milk options such as almonds, oats, and soy, along with sugar and sweetener alternatives, should be provided.
3. Pricing Strategy: The pricing strategy should align with the value proposition of the coffee shop. Given that more than 50% of the target audience values high-quality coffee and is willing to pay a premium, the shop can justify slightly higher prices than competitors. However, it's crucial to maintain competitiveness within the local market and consider factors such as product quality, brand reputation, and customer expectations.

Recommendations

1. Target Audience Engagement: Develop targeted marketing campaigns that resonate with young professionals, highlighting the quality, customization options, and ethical sourcing practices of the coffee offerings.
2. Product Innovation: Invest in sourcing premium beans from sustainable and fair-trade sources to differentiate the brand. Additionally, introduce innovative and unique beverage options to attract adventurous coffee enthusiasts and maintain a competitive edge.
3. Pricing Optimization: Implement dynamic pricing strategies to adjust prices based on demand, seasonality, and competitor pricing. Furthermore, offers loyalty programs and bundle deals to enhance customer value perception and encourage repeat business.
4. Continuous Market Monitoring: Regularly assess market trends, consumer preferences, and competitor strategies to adapt offerings and pricing strategies accordingly, ensuring sustained relevance and competitiveness in the ever-evolving coffee market.