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Costa Coffee & Gregg's Presentation

Business Research
by

Jasmine Sheikh

on 18 November 2013

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Transcript of Costa Coffee & Gregg's Presentation

Welcome
Presented By:
Research Findings Presentation
Content
Background Literature
Research Objectives
Methodology
Findings and Analysis
Research Limitations
Conclusion
Recommendations
Research Question
A report on the Guardian online, estimated that...
"...in the UK, there are more than 5,000 branded coffee in:
Town Centers
Retails Parks
Railway Stations
Airports
Petrol Stations
(Neate, 2012)
Research Objectives
1. To analyse the functional benefits Costa Coffee and Greggs offer to the consumer.
1.1 To investigate the importance of free Wi-Fi within stores.
1.2 To analyse how determining the price factor is for the consumer.
2.To examine the emotional benefits Costa Coffee and Greggs offer to the consumer.
2.1 To estimate to which degree the socialising factor plays an important role for the consumer.
3. To estimate to which degree the use of fair trade products affects consumers’ decision-making.
4.To investigate how loyalty cards affect consumers’ decision-making.
Background Literature
1 Focus Group
25 Males
25 Females
&
Observation
Group 4
Secondary Research
Primary Research
Methodology
Academic Journals & Reports
Official Brand websites of Costa Coffee and Gregg's Market research reports (Mintel, Datamonitor and Euromonitor)
Internet
Qualitative, Quantitative and Mixed
Sampling
Validity and Reliability:
Observations were carried out at different times of the day and week in order to avoid time errors

Observations were performed in a covert manner (non-participant), to overcome the observer effect
Validity and Reliability:
Run of a pilot test: To minimise the likelihood of respondents having problems in answering the questions and of data recording problems
Sampling Continued
Sampling Continued
Sampling Continued
In-depth Interview
Run of a pilot test: To minimise the likelihood of respondents having problems in answering the questions and of data recording problems
Validity and Reliability:
 1. To analyse the functional benefits Costa Coffee and Gregg's offer to the consumer.
1.1 To investigate the importance of free Wi-Fi within stores.
1.2 To analyse how determining the price factor is for the consumer
Analysis and Findings
Definition of Functional Benefits:
Functional benefits is a factor that most businesses use in order to retain consumers over time, and this can be done through various intangible or tangible items that would want to make the consumer stay with that business and not go to any other one, which results in loyalty to the brand (Chen and Hu, 2010)
1.1 To investigate the importance of free Wi-Fi within stores.
Primary Research – [Quantitative Research]
1.2 To analyse how determining the price factor is for the consumer.
Primary Research – Quantitative Date
"Excellent taste and the service makes it good value for money”
Yes
No
"Because I can make nice coffee at home, much cheaper”
2. To examine the emotional benefits Costa Coffee and Gregg's offer to the consumer.

2.1 To estimate to which degree the socialising factor plays an important role for the consumer.
Analysis - Objective 1
Definitions of Emotional Benefits:
Emotions are defined as “ a specific psychological reaction to a human appraisal” (Babin and Harris, p92).
Primary Research – Quantitative Date
2.1 To estimate to which degree the socialising factor plays an important role for the consumer.
Primary Research – Qualitative Data]
Costa Coffee
"It is a good place to socialise because of the relaxing atmosphere"
"Great atmosphere and comfortable sofas"
Gregg's
”No, there isn’t enough seating areas in Gregg's
Objective 3
Fair trade means: “Producers … are paid a fair price for their products and have decent working conditions” (Carlons, n.d., p2).
3. To estimate to which degree the use of fair trade products affects consumers’ decision-making.
Fair Trade Definition:
Secondary Research
Ethical behavior of companies becomes increasingly important as the present customer is “mission-driven” by attaching importance to “Fair Trade’s social, ecological, and place-based commitments” when choosing a coffee shop (Raynolds, 2009, p1).
Primary Research – [Quantitative Data]
Secondary Research
“Consumers are willing to pay more for better products (produced under better conditions)” (Kolk, 2005, p235).
Primary Research [Quantitative Data]
Primary Research – Qualitative Data
"I like to know that I am not supporting unfair activities”

"It helps the people that are growing the coffee beans and their economy"
Why do you care?
Why don’t you care?
"Because even if I cared, nothing can guarantee that companies are telling the truth”
4. To investigate how loyalty cards affect consumers’ decision-making.
Objective 4
Brand Loyalty Definition
“Brand Loyalty can be defined as a deeply held commitment to rebuy a product or service regardless of situational influences that could lead to switching behaviour” (Babin and Harris, 2012, p361).
Primary Research – Qualitative Data
"Sometimes I get the surprise of having something free, which is nice”
Do you think loyalty cards are useful?
Yes
No
“Loyalty cards are only useful for very frequent customers”


"Hardly get any good rewards"
Research Limitations
However
Conclusion
Recommendations
Reference:
Adcock, D., (1998). Marketing: principles and practice. London, Financial Times Pitman.

Bradley, N., (2010). Marketing Research Tools & Techniques. 2nd ed. Oxford: Oxford University Press.

Bradley N., (1999). Sampling for Internet Surveys. An examination of respondent selection for Internet research.

Journal of the Marketing Research Society. 41(4), 387-395.

Mintel, (2012). Coffee Shops - UK - February 2012: Who Buys Coffee Out of home and Where Do They Go?. online Available from: http://academic.mintel.com/display/611994/?highlight=true#hit1 Accessed: 08.02.2013.

Nykiel, R.A., (2007). Handbook of marketing research methodologies for hospitality and tourism. New York, Haworth Hospitality & Tourism Press.

Parasuraman, A., et al., (2004). Marketing Research. Boston, Houghton Mifflin.

Saunders, M. et al., (2009). Research Methods for business students. 5th ed. Harlow: Pearsons Education Limited.
Thank You for Listening
Any Questions?
Coffee shops in the UK have significantly increased throughout the years (Mintel, 2012); “[…] there are more than 5,000 branded coffee shops in the UK" (Neate, 2012).

Non-specialist coffee sellers become increasingly competitive for traditional coffee shops (Mintel, 2012).
Sampling Frame:
Male and Females aged 18-55
Sampling Method:
Non-probability sampling
Primary Research – Quantitative Data
Methods Used:
What we want to know is...
“What are the main determining factors for consumers when choosing and buying a coffee drink out of home?”
A comparison of Costa Coffee and Gregg's will be portrayed.
Research Question
Observation
Quantitative:
Primary Research - Qualitative Date
"Very important in order to be able to work"
Main reasons for un-importance
Main reasons for importance
(Popular answer given by student)
"Very important, to be able to use social media"
“Not important at all, because I have free Wi-Fi on my smartphone”
(Main answer by students & professionals)
(Popular answer given by professionals)
8 stores within Zone 1 (one store of each company in each direction)
Place
In-depth Interview
Focus Group
Mixed:
Qualitative:
Analysis - Objective 2
Secondary Research
“In a market with low loyalty levels, advertising and promotion is important in keeping brands in the forefront of consumers’ minds” (Mintel, 2012b, p1).
2. Functional Benefits:
More than 50% of all respondents consider coffee sold within coffee shops as being good value for money
But: Price was rated the least determining factor when choosing a coffee shop
1. Functional Benefit: The provision of free Wi-Fi in store is
Only little important due to being a smartphone generation
More important for professionals than students as students mainly want to surf while professionals want to work
3. Emotional Benefit: The socialising factor plays an important role as it is the main ‘activity’ of most respondents that enjoy their coffee in store
It is more important for younger customers (18-25)

Most customer still enjoy their coffee on the go in stead of in store while socialising with friends
4. The majority of respondents does not care whether their coffee is made from fair trade coffee beans and would not pay any additional charges for a fair trade produced coffee
5. Only 1 out of 4 coffee shop customers uses a loyalty card although the majority considers loyalty cards as being useful
More seating facilities in Gregg's Bakeries to increase the possibility to socialise
Avoid launching a loyalty card scheme within Gregg's bakeries as loyalty cards are rarely used (see Costa Coffee)
Design new strategies for building customer loyalty: e.g. daily/weekly/seasonal promotions
Recommendations of Research
A longer time scale will allow:
More time to expand our sampling and improve reliability
Higher number of stores to observe
Providing a comfort zone is the most important emotional benefit coffee shops can offer as this will enhance the likelihood of a return (Waxman, 2006).
The use of fair trade coffee beans can enhance the likeliness of a product among consumers but can also act as a deterrent due to higher prices (Raynolds, 2009).
Brand loyalty is strongly related to customer satisfaction (Parsons, 2012).
Emotional Factors
Fair Trade Coffee
Brand Loyalty
Functional Factors:

The provision of free Wi-Fi is a very important as nowadays many people use coffee shops as their office (The Independent, 2011)

A very important functional benefits required by the consumer is the price factor (Chen and Hu, 2010).
Main Activity when staying in store
*Very Similar Findings between Costa Coffee and Gregg's Consumers
Ambiguous brand positioning: Gregg's is not a specialised coffee shop but a bakery
Difficulties to find actual Gregg's coffee customers
Gregg's is still in the process of launching a loyalty card scheme
Difficult to compare
Observations were time consuming
Not enough time to gather larger sample for a more accurate result
Primary Research-Qualitative Data
Is coffee sold within coffee shops good value for money?
1.2 To analyse how determining the price factor is for the consumer
Primary Research-Quantitative
Good Value for Money?
Full transcript