Coffeetime India Market Research

CoffeeTime India Market Research and Decision Making White Paper for Brad Collins

Richard Derochea

University of Phoenix

MBA510R4

Managerial Decision Making

November 18, 2007

CoffeeTime India Market Research and Decision Making White Paper for Brad Collins

CoffeeTime is an established, modern creation, enjoyed by millions of Americans and Europeans, where its patrons can enjoy premium brands of exotic and regular coffees, while relaxing in a unique ambience of stimulating sights and aromas. Newly hired Business Analyst, Ava Learner, MBA, is grateful for the opportunity to lead a two-stage new market research design, which involves secondary, primary, and experimental research.

Ava Learner designed and conducted secondary research that coincides with primary research from marketing consultant group, Total Access, who led the experimental study. The project team researched modern and affluent cities in India, focusing on the consuming class, while determining the target segments and estimating the expected revenue per outlet. Ava Learner's goal is to ensure the analysis of the data is extensive and the research methods are appropriate to assist Brad Collins in his decision to open new CoffeeTime Indian outlets. The purpose of this White Paper is to present statistical evidence that is valid and reliable, supporting successful market entry by CoffeeTime.

India Outlets

One of the most important decision-making factors includes obtaining the knowledge about the various locations in India, in which CoffeeTime's primary and secondary marketing research revealed. The secondary research already discovered that India is approximately three times the population of the US and one-third its size (University of Phoenix, 2002). Not only does India have a modern and serene mix of tradition, the country is also one of the most powerful economies in South Asia. India's economy includes a mixture of farming, modern agriculture, information technology, and manufacturing industries. In addition, recent investments have provided new opportunities for regional businesses and approximately 150 million consumers (University of Phoenix, 2002).

The Indian government recognizes the continuing need for economical development to maintain class and entrepreneurship. India's population is more than 1 billion and over 24 major spoken languages including English being one of the most important for national, political, and commercial communication (University of Phoenix, 2002). Current financial data show the American dollar is approximately equal to 50 Rupees and the country is rich in natural resources, principal crops and is a hotbed of major industries with many trading partners.

The primary research shows the cities of Mumbai, Delhi, Bangalore, Chennai, and Pune have higher degrees of affluence with a modern cultural outlook. The research assessed the cities' demographics and includes: population by age, education and literacy, and monthly income. Leisure and lifestyle activities help determine the number of malls, theaters, and restaurants in the area. The study of various city infrastructures which notes factors such as the number of schools, colleges, and the daily examination of flight departures and arrivals. More important is the exploration of the competition in such areas as the number of coffee chains, restaurant chains, and the market size for coffee powder.

CoffeeTime's marketing team can acquire information that is more specific if it narrows the population band. The initial questionnaire contained a large sample size of 90 with a broadly ranged age group of teens through the mid 50s. The questionnaire contained pertinent questions about age, gender, income, and education. In addition, questions of how often the subject consumed coffee outside the home or office and at what types of locations he or she consumed coffee in, were asked. Survey questions included types and flavors of coffee drunk by subjects and his or her awareness of exotic and specialty coffees. The survey results reflect a person's willingness to visit a coffee bar, how often he or she visits a coffee bar, the average check paid, followed by ratings of the coffee bar experiences.

The questionnaire administered in India by Total Access, produced favorable responses. Upon conducting the experimental study in order to validate the findings of the primary research, Total Access considered limiting the regions to Mumbai and Delhi. Both cities are described as being the most affluent and modern with very few coffee chain outlets. The narrowing of subjects would have reduced the cost of the research at the risk of increasing invalid results.

Data Limitations

The validity and reliability of data sets collected for the purpose of establishing appropriate outcomes, such as likelihood to buy flavored coffees, is determined through the analysis of ordinal, interval, and ratio levels of measurement. One of the objectives is to determine how often certain classes of people in the most modern and affluent regions of India will purchase special flavor coffee. Some data sets are nominal, such as the number of malls and the schools in these regions. Not enough data are available to correlate these data to purchasing power; however, an interesting point to make is "the purchasing power parity for India against the American dollar is 5.24. This implies that the purchasing power of an American dollar in India is more than five times the purchasing power in the United States" (University of Phoenix, 2002).

Comparing primary and secondary data resulted in more appropriate levels of distinction between the classes of people and other data sets based on the demographics. Further validity and reliability, based on CoffeTime criteria, is confirmed through the collection of data from the surveys completed and returned by actual coffee drinkers in the highest ranked cities (see Table 1, p. 9). "The market response seems to be very favorableÐ'...This will help in validating the findings from the primary research" (University of Phoenix, 2002). Comparing frequency distribution statistics amongst visitors to competitors and other types of restaurants, which serve coffee, help establish a mean and median, therefore, providing a central tendency target based on discrete probability distribution models.

Additional data

When selecting a venue in which to expand the responsible parties must assess as much information as possible in selecting