INSIGHTS INTO INVESTMENT IN COFFEE SHOP BUSINESS IN THE UNITED STATES
About this project
This project is aimed at finding the coffee taste preference of United States community, to identify the audience, to design pricing strategy and to plan the product presentation. The investors need to know the right location for the business, what to make available, right prices and communication strategy.
The responses of the study were analyzed for majority choices. The following are the findings and recommendations to the potential investors.
Product Offering
Coffee D is the most preferred of the four sampled coffees, which is perceived to be less bitter and more acidic. It is the choice of 34.27% of the respondents. Generally, the respondents prefer a pourover, fruity, light roasted, somewhat strong coffee. It can be said that Coffee D is close to these descriptions.
Coffee A is the most preferred of the other sampled coffees in the absence of Coffee D. It is the choice of 41.61% of the respondents. 23.50% of the respondents who rejected Coffee A (in favor of Coffee B of C) prefers Coffee A to Coffee D when only Coffee A and D are on the table.
Target Audience
The target audience is largely male, educated, full-time employed White/Caucasian of age bracket 25-34 years. Also significant is age bracket 35-44 years. They are majorly democrat affiliated and family of no child. They take coffee at home, at the office, at café and on the go, in descending order. The preferred places for 'on the go' in descending order are Specialty Coffee Shop, Local Café and National Chain.
Pricing Strategy
The majority of the respondents (27.09%) has a record of spending $6-$8 on a cup of coffee. And 21.77% is willing to spend as much as $8-$10 per cup.
Know Your Customers
The respondents are largely the people who like coffee, add nothing to coffee, prefer pour over, high caffeine, take coffee for its taste, interested in where their coffee comes from, satisfied with their café experiences and primarily work from home. For the few who add something to coffee, they add the following in descending order; Milk, Diary Alternatives or Coffee Creamer, Sugar or Sweetener, Flavor Syrup. Whole Milk and Granulated Sugar top their respective group.
Sampled Population Demography
Apart from the expertise level which is normally distributed, other demographic parameters significantly skewed to one element. This put the randomness of the sampling in question. At best, a biased random sampling.
Recommendation
Preparation should be made to make Coffee D the main product of the business. Followed by Coffee A which has sizeable number of respondents loyalists.
Specialty Coffee Shop should be prioritized as sales outlets. Then, Local Café where it's more suitable. The business's shop should be located at communities of large White/Caucasian population.
Entry pricing of not more than $6 per cup should be considered with an opportunity of upward review of up to $10 per cup as the coffee gains acceptance.
Though, the majority are satisfied with their café experiences, but a significant number (13.41%) are not. Thus, the business should be interested in where the gap lies and address it.
The business should be prepared to be flexible in product offering when considering expansion to communities which do not fit in to the demography of the sampled population (White/Caucasian, educated, full-time employed).
Information about the sources of the coffee should be made accessible to customers.
Should you require further clarification, feel free to contact us.
Yours truly,
Signed
Kamaru Shittu
Analytics Consultant.