Factors to be considered before building a coffee shop

Factors to be considered before building a coffee shop

Instructions:-

You\’re required to write 1000 words following the thesis, analysis, and results from the first part of the primary research (the Word document that I\’ve added). The following part is mainly focusing on the evidence of secondary research (including in-text references to both academic and non-academic publications).
The secondary research needs to be conducted to justify the research question.
Even though the purpose of the research is to find out the different demands, attitudes, and expectations of students that might affect the successfulness of installing a new coffee shop in campus, the following part can be written by using more secondary research data regarding to the consumer behaviour in this market (it doesn\’t matter in which countries) and the factors that attract the consumers.
The factors might be the price, the brand, the locations, etc, anything that\’s in the written part, and then link it back to support what I have already written, thanks.

Solution

Factors to be considered before building a coffee shop

Introduction

The university plans to install a new Coffee shop/Sandwich bar at the Students’ Union (SU) building. The major concern is the pending performance of a new coffee shop given the current competition amongst other food providers. The needs and demand for a new coffee shop will be assessed by considering the barriers of entry in form of competition derived from existing services. The objectives of the research are to find out the best suitable pricing policy, types and variety of food that should be offered. This research will primarily focus on several issues which are necessary to be addressed before the installation of the food service. Moreover, the research will analyse the impact of several factors, such as: brand of coffee, location (Student’s Union building) and options for serving coffee (self/machine or staff served). The research question of this reseach is “What is the factors needs to be analysed before the Coffee shop is built.” Different demands, attitudes and expectations from students will affect the successfulness of installing a new coffee shop in campus. The main consideration in this research will be what student will take consideration to choose the new coffee shop instead of others. Data will be collected by Primary research. Primary research will be held in form of online surveys and questionnaire of students. In order to design a questionnaire which would provide sufficient information about students, an interview with SU staff and whoever responsible for the project is required.

Methodology

This research is done by collection method, by the use of online surrey. A self-administered online survey was conducted to find out the main factors affecting consumer behavior in the university’s coffee shop market. Online questionnaire provides several advantages compare to traditional survey methods, such as cost, speed, flexibility and usability (Lumsden, 2007). Moreover, online questionnaires can provide capabilities which traditional surrey method can not give for example: pop-up instructions and they can incorporate links. The main reason of online questionnaire being chose for the report is the purpose of this research is find out what students think is important for a coffee shop, online questionnaire can be easier to spread out, especially the research target group is student since nowadays internet is acting an irreplaceable role for teenagers. In addition, this online questionnaire is completely anonymous. Final version of the questionnaire was made by analyzing the problems from pretesting on 10 individuals.

Sample and procedure

A total of 144 students participated the questionnaire. The questionnaire was predominantly spread through social networking websites and exclusively among students of different age/stage of study, gender and race/nationality. Although, no reward for completing the questionnaire was offered the questionnaire was met with enthusiasm from respondents, who, occasionally, provided useful feedback. The high level of enthusiasm was, perhaps, due to student solidarity and understanding of the cause of this research. The online questionnaire was opened for a month until it is closed for data collection.

Design

The questionnaire consists of only nine questions and is designed to understand the existing competition, customer trends and allocate respondents into groups. The criteria for such allocation was the main factors affecting customers’ choice of coffee shop. Respondents, therefore, were asked following questions:

1. How often do you go to a café on campus?
2. What is your favorite café on campus?
3. What is the most important aspect for you when it comes to the choice of café?
4. What is your favorite brand of coffee?
5. How much do you usually pay for coffee/drink?
6. What type of food do you like to see in a café?
7. How much money do you usually spend on food/snacks in a café?
8. What sort of atmosphere do you prefer in a café?
9. Do you want to see a new coffee shop/food service in SU building?
10. Are you UK/EU citizen?

It was attempted to avoid questions that assume that all respondents drink coffee, except question 4, which was not necessary to answer. This is due to assumption that some people do not drink coffee, whereas most of coffee shops, despite coffee, also serve teas and hot chocolate. Questions on the questionnaire are structured questions for respondents to provide alternative responses.

Results and findings

Perhaps, one of the most interesting findings of the questionnaire is the results of question 4. It seems that coffee brand and price are not the most important aspects driving decisions, as anticipated, whereas food, location and atmosphere are more valuable for consumers. Although, almost 70% respondents favor Starbucks branded coffee more than other brands, it may not be the main reason for such a big popularity of the Boiler House café. Among respondents for whom location is the most important aspect more than half of the respondents (18 people – 56%) chose Boiler House café. Therefore, one of the success factors of Boiler House café is its location and geographical convenience. The café is placed in the middle of studying campus, which makes it relatively close to main studying facilities and, arguably, on the way of one the busiest walking paths in university.

It is seen from question 7, that there is a slightly bigger preference towards sandwiches over any other types of food. Among students for whom food is the decision-affecting factor Imagine is the favorite café on campus (18 out of 34 – 53%). Imagine is a café specializing in bubble tea and the only food option offered in there is a small sushi stand. However, none of the 18 respondents mentioned before chose sushi as a preferred type of food to be served in café. Therefore, there must be a different reason making Imagine second most favored café on campus. Imagine’s success factor may well be its exclusivity, because it is the only café serving bubble tea on campus, and location in the middle of campus and right below the Hub (one of two very popular canteens in university). Thus, it is doubtful that type of food does really affect people’s decision. Worth mentioning that Boiler House café, which is the first favored café, do not offer sushi.

Limitations

This session will deal briefly with the limitations occur in the research. The first limitation in the research is setting up the questionnaire. During the design of the questionnaire, SU failed to attend to the meeting after 2 months which supposed to provide background information of the new café, in addition, research got lacked of information of where the exact location of the new café, what type of café they would like to build and is that new café going to combine with Tommy’s which is a restaurant located in the SU building. It is hard for the researchers to adjust these problems, for example, SU building is also a place for students  to go drinking on the weekend, is that café going to sell alcohol or stay as a café. In order to overcome this problem, researchers went to the SU building, and talked to the SU staffs, although they did not know much about the project, they still provided useful ideas and suggestions for setting up questions in the online questionnaire.

           The second limitation this research had faced is the respondents who attempted the online questionnaire. Based on the questionnaire findings, almost 80% of respondents are not UK/EU citizen. Hence international student has to pay higher university fees than local UK/EU students, it is no doubt that they have the ability to pay higher price for coffee, therefore, it is hard to decide the data we got from the questionnaire are accurate or not. to capture this issue, researchers went to campus to interviewed 10 local students, surprisingly, the interview results show that local students are willing to pay similar amount of price for a coffee as international students evidently it supported the data received from the online questionnaire.

            The final limitation of the research is primary research. Since there is not a lot of research talking about café competition inside university. It is hard to prove that the data found from the secondary research is accurate or not. However, economist (ask ilya for the reference) had mentioned there is no other factor that is more important than location which match with our findings. Moreover, “customer is changing faster than ever before.” (Coenen, Tuson, 2007). Pervious research would not be a hundred percentage accurate, especially in this research.

 Analysis

            The main aim of this research was to identify the factors that should be considered before setting up a coffee shop at the university. To realize this, a sample of 114 students were chosen to participate in filling some questionnaires that contained questions appertaining to the preferred design of café, meals to be offered in the café, location of café, frequency at cafe and amount spent on meals. According to the results of the primary research, 45.8% of the students visited a campus café every week. Almost 50% of students visiting a café every week shows that a coffee shop business can be very competitive. A research carried out by Lyang and Wu (2012) also shows that coffee shop business is very competitive in the UK. They state that 62% of coffee users in the UK visit the top market players – Starbucks, Caffe Nero and Costa. The main areas of competition in these coffee bars are quality of service, foods offered, atmosphere, prices of products etc. This aspect of competition is also evident in the primary research where the choice of the café to be visited is largely determined by the kind of food offered and the atmosphere of the café.

Another aspect to be noted that conforms to Lyang and Wu’s work is that most of the students spent less (£2-2.99) on meals. Though there are some external factors that may affect installation of a coffee shop, coffee shop owners must strive to offer the best services in order to satisfy customers and thrive in the market (Stark 2013). For a coffee shop to stand out among its competitors, the owner must identify his or her strengths and weaknesses (Belcher 2017). Identifying strengths is where the owner identifies what best services he or she can offer. Identifying weaknesses is where the owner identifies areas that are poorly performed (Holmes, 2016).

            Various studies have been conducted to identify factors that can attract consumers in order for a coffee shop to remain relevant in the market. Waxman (2006) carried a study to identify physical and social factors that influence placement of coffee shops. The physical factors identified by the Waxman are aroma, cleanliness, adequate furniture, lighting and view to the outside. Cleanliness was listed the highest factor that was considered by customers. Coffee shops should be kept clean at all times by management in order to ensure the quality of food offered. Offering quality food means offering tasty, balanced, pleasant unique and consistent food in favourable environment (community 2017). Favourable environment means a clean environment. Cleanliness starts from the attendants, the environment around the coffee shop to the utensils used in the coffee shop (Ubert 2012). Cleanliness tells a lot about the quality of food offered. However, cleanliness does not only involve cleaning the coffee shop, but also choosing the right materials for the floors, paintings on walls and the furniture used. Customers prefer places that look beautiful and attractive (Geereddy, 2013). Aroma, was ranked second with customers being attracted by sweet aroma from coffee shops. The designers of coffee shops can take advantage of this by installing ventilation the will ensure the sweet aroma from baked products remains inside to attract customers. Since many people like reading in coffee shops, light is also an important factor. Light should not just be from electricity but design of coffee shops should factor in natural lighting by having reflective finishing materials (Waxman 2006).

            The fourth factor is comfortable furniture. Relaxing is a factor that has been observed in most studies. Our study also identified relaxing as an atmospheric characteristic that is required by most coffee consumers. Since many consumers read from coffee shops or meet with friends to chat and relax, the coffee shop should be designed to provide an ambient environment. Such an environment can be provided through ensuring there is comfortable furniture. Apart from furniture, cleanliness and convenient location are also important aspects. Location is an important aspect to consider when building coffee shops. Coffee shops should be situated in areas where they can be easily seen. They should be located in areas where customers can easily access them at any time (Ubert 2012).  For instance, places where customers can pop in on their way to work or after work. Relaxing mood also requires good view to the nature outside. For this reason, most coffee shops have seats outside to provide a good relaxing environment. This shows that they should be located in a busy but relaxing atmosphere.  Apart from these physical factors, customers also prefer social coffee shop attendants. Sociability greatly contributes to the services offered. Most consumers prefer warm welcome from attendants (Waxman 2006).

            Lyang and Wu (2012) also carried out a study to analyse coffee shop market. They used both interviews and observation methods to identify the behaviour of customers in coffee shops. A case study of Caffa nero, starbucks and costa were used in their study. Just as in our primary research, Lyang and Wu identified atmosphere, products and services offered as the major influencers of the success of a coffee shop. All the three coffee shops had good decorations, magazines, and comfortable seats to provide relaxation mood and home feeling. This is also observed in our studies where more than 90% of consumers require a relaxing atmosphere. The coffee shops offered quality products to customers and put the interest of their customers first. To them, customers are treated as bosses. Therefore they aim at promoting good interaction with customers. Another factor that is also observed by these researchers is prices of products. Some of the respondents in the Lyang and Wu’s study noted prices of coffee as a hindrance to their intake of coffee. Some consumers would be easily put off by the prices of coffee if they are too high. The researchers state that reduction in prices of coffee and discounts for loyal customers would attract more consumers. The same is reiterated by Pet et al (2009) in their research where 44% of the respondents state that price influences their purchase of coffee. In the primary research, this factor is also evident in the low funds spend in coffee cafe. Though the students did not explicitly state if prices of coffee can prevent them purchasing it, the results show that students spend more on snacks and other foods than coffee.

            According to the primary research backed up using secondary research, price, location, atmosphere and brand of coffee are the main factors that should be considered when setting up a coffee shop in the University. Most of the students spending less on coffee than on other snacks shows that the coffee shop prices should be moderated so as to attract more students. Students preferring Starbucks coffee to others shows that not all meals will be liked by the students – there are some meals that will not be an urgent necessity in coffee shop. The coffee shop should therefore dwell more on products that are sold more than the others. For instance, since students prefer Starbucks coffee than any other brand, this type of coffee should be supplied in plenty to ensure that it serves all the students. Another factor realized in our primary research is location. When opening a coffee shop, one should ensure that it is centrally placed for easy access by most of the customers (Gentile 2014). It is realized that the centrality of Imagine café must have made it to be preferred than other café. This shows a café should be placed in a place that can be easily accessed. Atmosphere seems to be an equaly important aspect to consider while setting up the coffee shop. Almost all the students preferring a relaxing atmosphere shows that atmosphere is a very vital aspect when setting up a coffee shop.

References

Geereddy, X. 2013 , ‘Strategic Analysis Of Starbucks Corporation’. Global Data and MarketLine Financial Deals, Starbucks Corporation, Reports.

Waxman, L. 2006, ‘The Coffee Shop: Social and Physical Factors Influencing Place Attachment’ Journal of Interior Design, vol. 31, no. 3, pp. 35 – 53

Larson, R., C. 2008, ‘Starbucks a Strategic Analysis’, Brown University     Economics Department

Stark, M. 2013 ‘Creating the Coffee Shop Brand Experience: a Designer’s View’, retrieved from http://scaa.org/chronicle/2013/11/13/creating-the-coffee-      shop-brand-     experience-a-designers/

Liang, W. & Wu, R. 2012, ‘Analysis of Coffee shop market –a Case study of UK’

Belcher, L., M. 2017, ‘SWOT Analysis for a Coffee Café’, Retrieved from    http://smallbusiness.chron.com/swot-analysis-coffee-cafe-15644.html

Holmes, H. 2012 ‘Coffee Shop’, Retrieved from http://www.sbdcnet.org/small-     business-          research-reports/coffee-shop

Gentile, D. 2014, ‘10 THINGS EVERY COFFEE SHOP OWNER NEEDS TO   KNOW’, retrieved from https://www.thrillist.com/drink/nation/coffee-  shop-business-how-     to-open-a-coffee-shop

Community 2017, How Customers and Coffee Shops Define Quality Differently. Retrieved from https://handground.com/grind/how-customers-and-coffee-shops-define-quality-     differently

Pet, E., Iancu, T., Ruset, C., Milin, A., Buzamat, G., & Buzila, N. 2009, ‘Research Concerning     the Behaviour of the Coffee Consumer’, Bulletin UASVM Horticulture, vol. 66, no. 2, pp.362 – 365.

Ubert, G. 2012, Keep it Clean: Coffee Consultant Shares Tips on Turning Cleanliness into a Competitive Edge for Independent Coffee Shops. Retrieved from             http://www.prweb.com/releases/crimson_cup/coffee_franchise/prweb9939695.htm