One World Cafe - final report

Market Research for

One World Café

By

A-level Business Students

at

Oldham Sixth Form College

To: The Project Managers of the One World Café Project.

From: Business Studies students from Oldham Sixth Form College

Date: 3rd July 213

Title: Market Research Findings for the One World Cafe

Terms of reference

This is a report contains market research findings for the One World Cafe. The market research has been conducted by A Level Business Studies students from Oldham Sixth Form College.

Firstly the primary research includes questionnaires that were conducted on people in and out of the college of their views of the coffee shop and if they would go to it. The second part of the primary research includes the focus group. The focus group included 2 groups also from in and out of college a range of questions were asked to gain qualitative responses. The secondary research conducted utilised information from a variety of sources including government statistics websites and competitor information.

Primary Research

Q.1 How often do you buy coffee (from a coffee shop) in a week?

26%

27%23%

10%6%

3%5%

Percentage of people

NeverOnce a weekTwice a weekThree timesFour timesFive timesMore

The pie chart shows that 74% of the people would buy coffee at least once a week and 26% would never buy coffee. A large percentage of the people buy coffee at least once a week, this information could benefit the coffee shop as it will help the shop when buying furniture for the cafe as it will tell you how much seating you will need, and it also helps to identify the level of staff required.

Q.2 The one world coffee shop is opening in November. Would you go visit it?

71%

29%

Percentage of people

YesNo

Looking at the pie chart it tells you that 71% of the people we asked would visit the One World Café at least once. This could be an opportunity for the business to promote the café, making sure that the café is well furnished and the atmosphere is good. These answers indicated that the business is likely to have demand.

Q.3 Which type of coffee do you buy?

19%

27%31%

23%

Percentage of people

Americano

Latte

Cappuccinio

Mocha

The pie chart tells you people buy different types of coffees however the pie chart tells you that 31% of people would buy cappuccino and 27 % would buy lattes. This means that when the café open they should have more of cappuccino and latte available for the public. The quality of all the coffees is very important in every coffee shop because people will come back for the same coffee if it has a good quality it taste good.

Q.4 How much would you be prepared to pay for a regular version of the following coffees?

i)

59%

40%1%Americano

£1.70£2.00£2.30

ii)

54%

42%

4%

Latte£2.00£2.20£2.40

iii)

56%41%

3%Cappuccino

£2.00£2.20£2.40

iiii)

63%

30%7%

Mocha

£2.10£2.30£2.50

This shows 59% of the people surveyed would pay £1.70 but only 40% of the people surveyed would be willing to pay £2.00 and no one surveyed would pay £2.30 for an Americano coffee. So the price for an Americano coffee could be between £1.70 and £2.00

For a Latte most would also be willing to pay £1.70 for the coffee however more people would be willing to pay higher for it as there are more people willing to pay £2.30 and just under half the people would pay £2.20 so the price for this coffee could be £2.20

Like the latte this coffee also seems popular but less people are willing to pay £2.20 or £2.40 but it is more popular than the Americano since people are still willing to pay higher for it but since latte is more popular the price for this could be £2.00

People are not really willing to pay more than £2.10 for a mocha coffee however some people are willing to pay higher. The price of the Mocha should be £2.10 this is because the majority of people would be willing to pay this price and a higher price could lead to a loss in customers.

Q.5 Would you buy any of the following drinks at the coffee shop?

(In the above question respondents were allowed to select more than one option)

These graphs show the findings from the research.

44% of the respondents said that they would very likely buy a smoothie and 33% said that they wouldn’t likely buy a smoothie. This shows that there isn’t huge difference between who would buy smoothies and who wouldn’t. Therefore it might not be worthwhile having smoothies available all year round, it could be just a seasonal drink that is available in summer. Also if smoothies were available all year round then there would be extra cost to find fruit that is not in season in the winter time.

39% of the respondents said they would very likely buy water from the coffee shop and 50 % say they would not likely buy water from the coffee shop. Figures showing that more people would not buy water would suggest that water should be only available in small quantities for the odd customers who want water. Due to water having a long shelf life this means that it could be available all year round.

66% of respondents said they would very likely buy soft drinks and 22% said they wouldn’t likely buy soft drinks. This shows that the vast majority would want to buy soft drinks which like water ;have long shelf life so can be available all year round and not just at specific times of the year.

63% of respondents said that they would very likely buy milkshakes and 28% said they wouldn’t. The demand for milkshakes is high; this means it would be beneficial to stock them all year round due to the 63% of respondents wanting milkshakes. Unlike the smoothies where there is only a small difference between who would buy smoothies and who wouldn’t hence only having them seasonally.

Q. 6. Would you buy any of the following food products at the coffee shop? (Tick all that apply)

88% of the people surveyed said they would buy Panini’s or would maybe buy them. 86% of the people surveyed said they would either buy toasties or maybe buy them and also 89% of the people surveyed said they would either buy or maybe buy sandwiches and cakes. This tells the café that it should stock a lot these as people will be buying these products.

As only 62% of people said they may or will buy soup from the people surveyed and 38% said they would not buy soup this means a few people would be buying soup in the coffee shop and so you will need to think if you would want to sell soup or not and if you do you could sell them on certain days, also soup may be seasonal and since it is hot not a lot of people would be thinking of buying during summer and so when winter comes they may decide to put soup back on more regularly and to see if more people decide to buy soup.

91% of people said they will or might buy chocolate of the people surveyed and 78% of the people surveyed said they would or maybe buy biscuits. 77% of the people surveyed said they would buy or maybe buy crisps. Also since crisps, biscuits and chocolates have a longer shelf life and are usually

impulse buys which means people buy it when they see it and do not plan on buying it so the coffee shop should put these near the tills. Also they could buy a lot at the same time (cheaper since it’s in bulks) and will just sell them at a steady pace.

In conclusion there is demand for cakes, toasties, sandwiches and Panini’s since most of the people surveyed said they would be buying them. The soup is one, you should discuss and see if you want to sell it as most people surveyed said they wouldn’t buy it so you should decide if you want to serve it during winter or keep it during summer as well however only once or twice a week. The biscuits, crisps and chocolate should also be in stock as these will sell steadily but you shouldn’t buy too much at once since you might not be able to sell them all before there expiry date and may just be wasting money.

Q.7 What time of the day would you use the coffee shop?

39%

41%

21%

Time of day

MorningAfternoonEvening

These results show us that most people will visit the coffee shop in either the afternoon or morning with the afternoon percentage being 41% and the morning being 38%. Less people stated they would use the coffee shop in the evening at a percentage of 21%

A similar number of people chose morning and afternoon. This thereby indicates that the coffee shop should open in the early morning and close in the late afternoon when most people are likely to visit. This would maximise sales and mean the shop would not be open during quiet times where costs such as electricity could mount up with no revenue to pay for them.

Q. 8 Which of the following features are important to you?

Wi-Fi

Background m

usic

Televisions

Comfortable ch

airsSo

fas

Fair T

rade products0

40

80

120

Not importantMiddleVery im-portant

(Respondents were allowed to select more than one option)

The Comfortable Chairs are the feature which came out as the most important factor from the questionnaires with those asked scoring the most important. As linked with our secondary research, successful coffee shops in the near area all have areas with comfortable chairs. This could be ideal to providing a relaxed atmosphere which is vital for survival and for success.

The second and third most important features came out to be Wi-Fi and Sofas, with both attracting over 70% of those asked. Having access to Wi-Fi may be more popular among the younger people. Furthermore, given the location of the coffee shop behind Oldham Sixth Form College, having Wi-Fi could be key at keeping people in the shop and also encouraging them to return. Also, The high popularity of sofas could be to help create a relaxed atmosphere in a coffee shop where people can sit and socialise. The use of Sofas could also serve well to keep people in the shop for a longer period of time.

The feature treated with the least importance with the most ranking it as not important was having televisions. All other successful local coffee shops do not have televisions. They could actually prove to be a distraction and not very much wanted by the public. Sudden loud noises can be not very attractive to customers and does not contribute to the relaxed environment a coffee shop seems to produce. Not having a television in the shop may prove necessary.

Almost half of the people who partook in the questionnaire decided that they thought fair trade products were very important however only around 10% less believed it was not very important to have fair trade products, with a large amount of people being in the middle. Having fair trade products can be beneficial as some customers will only eat/drink fair trade products which can generate sales for the coffee shop. Although fair trade products will be more costly to buy for the business it will be ethical and could attract more customers.

Just under half of the people who answered the questionnaire believed having background music was very important with around 45 people being in the middle. A small number of 20 people said background music was not desirable. However, having back ground music can help to create the relaxed atmosphere of a coffee shop, of course with the correct choice of music. However to some it may be off-putting.

Q. 9 How would you prefer to find out about the coffee shop?

24%

18%

11%

20%

27%

Percentage of people

TwitterFacebookEmailLeafletsPosters

27% of the people who took part in our questionnaire said they would prefer to find out about the coffee shop via posters. Posters can be a very effective method of advertisement as they can reach out to a large number of people however we must take into account the cost of this form of advertisement so early in the life of the business.

Just over half of the people said they would prefer to be told about the coffee shop via internet methods, 24% said they would prefer Twitter, 18% said Facebook and 11% said E-mail which was the least favourite. Advertising by Social media sites is very effective especially for the coffee shop because it is totally free and can reach out to an extremely large market.

Around 1/6 of the people who answered the questionnaire said they would like to find out via leaflets. Leaflets are a way of directly getting to the public however they can just ignore them and also the cost of designing and purchasing leaflets can be quite high where there is a chance they could just be ignored.

Q.10 Which of the following would you prefer?

8%

23%

69%

Percentage of people

Take awayEat inBoth

69% of the people who answered the questionnaire chose they would like the option to both eat in and take away. Allowing people to take away as well as eat in can attract more customers who would rather just buy a product and leave. It will widen the market for the coffee shops if we gave both eat in and take away option.

Focus group

The Focus Groups for One World Café

In order to gain a range of ideas from market research for One World Café as well as from the questionnaires, two focus groups took place. One group being college students and the second being a group of members of the church all from a different range of backgrounds.

Market

The research that came from the focus groups showed that the public and students would be interested in trying a new coffee shop located behind Oldham Sixth Form College. It was said that as long as sufficient advertising was used to create awareness of the location of the café then customers should flow into the café.

When asked what they thought would keep them going to a particular coffee shop, those who took part thought that the quality of the coffee and other services must be high but at a reasonable price. The problem that came up often was that for example Costa coffee has a high quality range of good but the prices are unreasonable and if prices were low at One World Café customers would visit it instead. cleanliness was a large impact of whether they visited the coffee shop just the once or whether they became loyal customers. Also friendly and approachable staff is a must have from the focus group, as each person wanted to feel at ease in the cafe and with staff that are polite and friendly.

In addition, the atmosphere was mentioned and in order to be agreeable, the older focus group felt as though if background music was to be played it shouldn’t be too loud as this can become a nuisance whist trying to enjoy a relaxing drink with friends.

Another idea that was extremely welcomed by the group was a suspended coffee system. The aim is that a customer will be able to purchase a sandwich, drink or snack item which will be kept aside so that when someone who is homeless went into the coffee shop they would be able to pick up the suspended item free of charge.

Price

With the members of the church there was mixed views on the pricing of a regular coffee however the majority agreed between £1.00 and £1.50. The students came up with the idea of pricing coffee’s as follows Small- £1.10, Medium- £1.50, Large-£1.99.

Opening time ideas

At the focus group the research found that if possible, the One World Café could become a popular place in order to meet for work related meetings, particularly in the late morning/ lunch time. However as the working day on average doesn’t end until around 5 o’clock meetings throughout the day could be possible and so should open until late afternoon/early evening. The focus group from the church said that they would like for students to access the café also and so early opening from 8:00 or 8:30 would be a good idea to attract customers in the form of students before the college day beings. The student focus group showed that the students would use the coffee shop at lunchtimes, breaks and in frees as they would like somewhere else to do work as well as social with friends.

Food ideas

The research showed that food would be a great area to draw money in to the business with the focus groups identifying that they would like to have the option to purchase a limited arrange of food. With examples of toasted sandwiches and Panini's, cold sandwich, crisps and other snacks. Also the groups decided that they would like the option to purchase soup during cold weather and that they thought it would be a good idea for those on diets as it’s cheap and tasty but low in calories. Also the option to take away warm and cold food was liked by the group.

Drawbacks

At the focus group it was found that if whilst at the One World Cafe there was swearing and other bad language this would really put them off attending the coffee shop again and so the customer’s attitudes should be monitored in order to not disrupt other customers. Another point was that if the hygiene was poor they would not visit the coffee shop again. The customer service was also brought up that the staff must be friendly and approachable for them to feel comfortable in a coffee shop. The student focus group found that if whilst at the One World Cafe it was crowded they would not want to go as they would not have anywhere to sit and noisy, also if the price of the products where expensive they would look for a cheaper alternative.

Drinks

Different flavors of coffee and different styles were poplar during the focus group as long as the coffee was reasonably priced and of high quality. The option to be able to take away drinks was liked. The students were very keen on the idea that a limited range of maybe milkshakes or smoothies could be available, as long as prices were low.

Promotion

A few ideas came out of talking about promotional options. The main was that visible signage is essential as from the road the church can sometimes not be seen and so a large sign will be needed to draw in attention. The sign would also increase the market scope of the business as those who walk past on the way into the center of Oldham could be draw in from the high quality and reasonable pricing. Further more adverts in the Oldham Chronicle Newspaper can attract customers from all over Oldham to experience the new coffee shop. The focus group from the church felt it was important that the café looks just like a café and for the customers to know that it is separate from the church which could make some customers feel more comfortable and may open up the potential market.

The students also gave examples of advertising by using leaflets, social networking sites (Twitter and Facebook) and also Loyalty cards.

Aesthetics

Whilst discussing the aesthetics of the One World Café it was found that there would be a willing art teacher who could help with the design and also an art group that already meets at the church would be willing to produce work that could be displaced in the café and some of the work could potentially be sold. Also the churches group decided that they would like the café to not look as though it was part of the church and was a separate facility. Whilst discussing the aesthetics of the One World Café with it was found they would be more drawn to the café if it was modern, and if possible would really appreciate WIFI access.

Extras

In addition to the café being open to the public the café could also be open to the church on Sunday mornings before and after services. The older focus group felt as though in some ways linking with Halfords was a really good idea to draw in new customers. This would work as the actual workers may benefit from the good food and drink available just across the road but also, whilst getting cars fixed Halfords customers are often told to come back in an hour and with the café going to be literally just across the road it would be convenient for the customers to have a high quality coffee from One World Café. The students decided that they would prefer to order and pay at the till rather than have their order taken as this can sometimes take longer to be served

Secondary research

Market mapping can be used to identify One World Café’s position in the market and also it identifies where competitors are in the market.

Market mapping would enable us to put The One World Café coffee shop in a desirable position, a position where the products are of good quality and the prices are not expensive. The position would be just above Coffee Republic or in the position Coffee Republic.

UK Hot Drinks market

This would be the desired position as the prices are not too high and quality of the products is good.

The demand for Coffee never falls this is because over the years we have seen an increase in the sales revenue for coffee this implies that the coffee serve to customers should be of a high standard. From 2013 – 2014 we expect an increase in the sales revenue of UK hot drinks.

Segmentation

Costa Coffee would be a competitor, because it offers good quality products, friendly staff and the ambience is nice it makes you feel at home. Costa also has a stand based in college this means that some costa products are easily accessible. The information above shows us the markets that Costa has gained even though Costa products are mostly aimed at middle class and privileged class. However people still use their money in costa even though its expensive this is because of the quality and it feels like it is worth it. This would be useful to One World Café when planning what product would be sold and how the environment would look like.

Product

Costa Coffee manages to advertise without spending money. This is because the brand name and logo which plays a huge part about people knowing Costa from their friends and family. The One World Café would need to have a strong advertising campaign in order to attract consumer attention and make sure their brand is known.

Information gathered from - http://rodenberg.nl/publications/publications/COSTA_COFFEE_vs_STARBUCKS.pdf

Price

The price of the products that One World Café sell would have to be within the range of the prices Costa Coffee and the Independent coffee shops offer to its customers, this would mean that the product One World sell would have to taste good as it would not be as cheap as independent coffee shops. If the products sold are of a better value this would have an influence on the customers buying habit positively because they are getting what is worth their money.

Information from menu and website - http://www.costa.co.uk/

Competitor analysis

The Coffee Lounge would also be a competitor; this means that the prices and products of One World Café must be of a better value and should also offer something unique about their product and this could add value to the café.

Information from in store menu

Rhode Island coffee

Rhode Island should also be considered as this would be a convenient place for people who are in town to have coffee. Rhode Island has a good environment and is very welcoming to customers. The products served there are similar to costa but they do serve some hot food as well.

Coffee machines in Oldham Sixth Form College

The college has several coffee machines which attracts students because they make good quality hot drinks; at a very cheap price & easily accessible to them as it is in college buildings.

Information gathered from obtaining menu.

Recommendations

Product

From all the research collected the main products that came out of the information are that One World Café should sell coffee and tea as well as smoothies and milkshakes. The smoothies and milkshakes were mentioned both in the questionnaire and focus groups. The smoothies should be sold in the summer time mainly as they are more likely to sell during the hot weather. Milkshakes should be sold all year round as the data suggests that there is high demand for the milkshakes. The coffee and tea available should be to a high quality but reasonable to compete against rivals to earn customers.

The food available at the café should be Panini’s, toasted sandwiches and cold sandwiches. Panini’s and toasties should be available more in the winter as more people want to buy hot food in the winter then the summer. Cold sandwiches should be available in the summer as more people would want to eat cold food. Also people can take the sandwiches away for lunch.

Promotion

We recommend that when promoting. The One World Café the business should target different segments with different promotional strategies. The business could promote One World Café to college students through Twitter this is because the students all have twitter account and they access their twitter accounts quite a lot everyday

One World Café could hand out flyers. The business could ask the members of the church to help hand out flyers to the public. This will help promote the business and enhance their brand name. This strategy is very effective because it’s cheap. The target market is big so by handing out flyers they could attract about 40% of their target markets.

The main promotional strategy that was recommended when we were doing the focus group was visible signage. From the road to the church the café can sometimes not be because of the trees in front of the café therefore a large sign will be needed to draw in attention. This is a priceless strategy to establish the brands name and gain new customers.

The business should also promote via placing posters in strategic areas. For example a poster pointing where the café is that could be placed opposite Halfords this could attract students as well as customers who are using Halfords. Another poster pointing where the café is could be put outside Metro Station as a way of attracting commuters.

Price

The price should be reflective of the primary and secondary research. The focus groups had suggested prices of coffee should be £1.10 for small, £1.50 for medium and £1.99 for large. £1.10 is the price of a coffee in the college this means that the price would be equal however the college do not offer medium and large drinks this would give One World Café a competitive advantage. Americano’s would be purchased at the price of £1.70 by 59% of the people who took part in the questionnaire. However 40% of the people would be willing to pay 2.00 this means that the price should be between 1.70 - £2.00. The price of food should be at a reasonable price as mentioned in the focus group it should be affordable and appealing as most people would purchase food with their hot drink.

Pricing decisions need to reflect market research findings. The questionnaire and secondary research findings suggest that coffee should be priced between £1.70 - £2.00. The focus group indicated that

the price should range from £1.10 - £1.99. The owners need to consider costs related to coffee before deciding the final price. Place

From all the research gathered the main areas that came out of the information on place is that, the chairs in the One World Café must be comfortable and that WIFI is extremely important for the students as they will use the internet for social networking site and checking email for college work.

Comfortable chairs are extremely important as they influence the atmosphere of the entire coffee shop. Comfortable chairs will affect the amount time that the customers spend in the One World Café. WIFI came out in both the primary and secondary research with it being extremely important in affecting whether people will go to the One World Café. Therefor for the café to attract all customers possible both comfortable chairs and WIFI should be accessible.