Tug Toners MBAH 10B

Deogracias DanguilanDanae Orig

Rosalynn PanganJanice Saraza

History of the Industry Kiva Han in Istanbul ( then known as Constantinople) was the first recorded public

place serving coffee back in 1475. 1529 – first coffee shop in Europe was established

1652 – Britain opened it’s first coffee establishment. Although wildly popular in Europe, the Brits found out about coffee in Istanbul.

One cup of coffee costs a penny back then that’s why coffee houses are called “ penny universities” in Britain.

When America was colonized, the coffee house was quick to follow. The role of the American coffee house was the same as those in England: the hotspots for the business community.

In 1946, Gaggia invented the commercial piston espresso machine, which was far easier to use and safer than earlier models. The Gaggia coffee bar, in Italy, was the first location to use these machines and to offer espresso along with the regular coffee. The modern age of coffee houses was born.

Scope and Limitation This observational study is between two coffee shops located at

Power Plant Mall in Rockwell. The Coffee Bean and tea House Starbucks Coffee

Observations were made on a Saturday afternoon between 12:00 pm – 4:00 pm

The Coffee Bean and Tea Leaf

Starbucks Coffee

Observations

The Coffee Bean and Tea Leaf

Starbucks Coffee

Short Description of the cafe

•A privately-owned, family-run coffee and tea companies in the world founded in 1963 by Herbert B. Hyman.

•Offers over 22 varieties of coffee and 20 kinds of tea. Also serves pastries and hot meals.

Space: Approximately 40 X 40 sqm.

Tables: 19

Seating Capacity: 70-90

Ambience: warm

Food preparation : majority are done in the front service area, although cooking are done in the back kitchen.

Business hours: 10:00 AM – 11:00 PM

• Founded in 1971 by in Seattle. The company became publicly traded in 1992.

•The Power Plant mall branch is one of the 240 stores in the Philippines, and 20, 366 in the world.

•Offers fresh coffee, teas, pastries and sandwiches.

Space: 40 by 40 sqm

Tables: 13 smoking ; 21 non-smoking

Seating Capacity: 150

Ambience: hip and trendy

Food preparation: All done in the front service area

Business Hours: 6:30 AM - 12:00 MN

The Coffee Bean

and Tea Leaf

Starbucks Coffee

Location and Customer Traffic

•Located at the 3rdlevel, Cinema area, North wing of the Power plant Mall.

•Most customers are residents of the condominium and cinema goers.

•There are several restaurants around the area but the nearest coffee related service is a kiosk of Starbucks

•Located at the ground floor of the Power Plant Mall, beside the void entrance.

•Heavy customer traffic since it’s in-front of one of the Mall’s drop off area. Strategic location being beside the mall entrance and can cater to smoking and non-smoking patrons.

•Several family restaurants surrounding the store.

Facilities

•Restroom and wash area available

•Wooden tables and chairs•Soft lighting

•Some of the kitchen activities can be seen by the customers

•Soothing music

•Electrical outlets available for customers with laptops.

•Restroom and wash area available

•Wooden chairs and tables for smoking area. Soft chairs, couches ( for big groups ) in the non-smoking area

•All food preparation can be seen by the customer

•Music can only be heard inside the store

•Electrical outlets available inside the store

The Coffee Bean

and Tea Leaf

Starbucks Coffee

Customer Demographics

We started to observe their operations from 12:50pm to 1:30pm. At that time there were 14 occupied tables with approximately 16 customers: Some were 2 families, 4 couples and group of friends ranging from 35 years and above.  Out of the 12 occupied tables, three tables have not ordered anything. Most of the customers were drinking hot coffee. Age range: 30 and aboveProfile: Class A and BOccupation: White-collar employees, retirees, expats

We started to observe their operations from 1:30pm to 2:30pm. At that time, almost all tables are occupied (11 out of 13) and (17 out of 21) with mixed customers: Some were families, couples and group of friends ranging from 25 to 60 years old. (43 customers)

Age range: 18 and aboveProfile: Class B and COccupation: Students, white collar employees, call center agents, friends, expats

Menu and Pricing

Coffee Beverages ( Hot and Cold ) = 120- 180 phpBrewed Teas = 90-120 phpPastries = 75 – 120 phpCakes = 130-160 phpHot meals = 180 – 300 php

Coffee Beverages ( Hot and Cold ) = 100-150 phpTeas = 90 -120 phpPastries = 50 – 100 phpCakes = 120 – 140 php Sandwiches = 95 – 150 php

Average Expense per Customer

Coffee = 140 phpCoffee + Pastry /Cake = 220-250 phpCoffee + Hot meal = 350-450 php

Coffee = 120-150 phpCoffee + Pastry /Cake / Sandwich = 250 - 300 php

The Coffee Bean

and Tea Leaf

Starbucks Coffee

Costumer Service

• Customers normally wait for 5-8 minutes for their coffees.

•A puck timer will be given to the customer while waiting. Once the order is ready, the puck will vibrate and light up signaling the customer to proceed to the pick-up counter.

• wait time 2-5 minutes

•The crew engages with the customers by greeting them as they come in the store. They also ask them about their day once the customer is in the counter.

•Crew helps customers order by making suggestions.

•They have a replacement policy where you can ask for your coffee to be re-made if you don’t like it.

•Most of the crews know their patrons and greet them by their names. They have a more personal approach in providing service.

Customer Motivation to Visit

Ambience - the coffee shop has soft lighting, warm colors with minimal traffic of mall goers, customers are assured of a relaxing atmosphere.

AccessibilityBrand recognitionProvision of smoking areaBecause of it’s location, some customers make the store either a jump off or rendezvous point.

Customer Length of Stay

45 minutes to 1 hour 1-2 hours. Some customers consider the store as a hangout.

ConclusionUpon careful review of the difference between the two cafe, we

believe that Starbucks has a better advantage in terms of:

1.     Accessibility2.     Personalized approach3.     Target market: those waiting for somebody, shoppers, friends

(wider range of market)4.     Brand familiarity

RecommendationFor competitive advantage, additional

products such as the following can be explored:

1. coffee bar- where in people can mix their own

brew such as liquor and spices2. flavored coffee candies3. more food choices that are organic

based