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Case Study

Joe Brown wants to open a coffee shop and is researching the market. He finds inconsistent results from previous studies comparing the taste of coffees from different chains. While some studies found Starbucks to have the best taste, others ranked it last. Joe questions the usefulness of this research and considers hiring a consultant to conduct a feasibility study for his business.

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Mayuri Rawat
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68 views2 pages

Case Study

Joe Brown wants to open a coffee shop and is researching the market. He finds inconsistent results from previous studies comparing the taste of coffees from different chains. While some studies found Starbucks to have the best taste, others ranked it last. Joe questions the usefulness of this research and considers hiring a consultant to conduct a feasibility study for his business.

Uploaded by

Mayuri Rawat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Case Study

Joe Brown is ready to start a new career. After spending 30 years as a market researcher and inspired by
the success of Starbucks, he is ready to enter the coffee shop business. However, before opening his
first shop, he realizes that a great deal of research is needed.

He has some key questions in mind.

■ What markets in the United States hold the most promise for a new coffee shop?

■ What type of location is best for a coffee shop?

■ What is it that makes a coffee shop popular?

■ What coffee do Americans prefer?

A quick trip to the Internet reveals more previous research on coffee, markets, and related materials
than he expected. Many studies address taste. For example, he finds several studies that in one way or
another compare the taste of different coffee shop coffees. Most commonly, they compare the taste of
coffee from Starbucks against coffee from McDonald’s, Dunkin’ Donuts, Burger King, and sometimes a
local competitor. However, it becomes difficult to draw a conclusion as the results seem to be
inconsistent.

■ One study had a headline that poked fun at Starbucks’ high priced coffee. The author of this study
personally purchased coffee to go at four places, took them to his office, tasted them, made notes and
then drew conclusions. All the coffee was tasted black with no sugar. Just cups of joe. He reached the
conclusion that McDonald’s Premium Coffee (at about $1.50 a cup), tasted nearly as good as Starbucks
House Blend (at about $1.70 a cup), both of which were much better than either Dunkin’ Donuts (at
about $1.20) or Burger King (less than $1). This study argued that McDonald’s was best, all things
considered.

■ Another study was written up by a good critic who was simply interested in identifying the best-
tasting coffee. Again, he tasted them all black with nothing added. Each cup of coffee was consumed in
an urban location near the inner city center in which he lived. He reached the conclusion that Starbucks’
coffee had the best flavor although it showed room for improvement. McDonald’s Premium Coffee was
not as good, but it was better than the other two. Dunkin’ Donuts coffee had reasonably
unobjectionable taste but was very weak and watery. The Burger King coffee was simply not very good.

■ Yet another study talked about Starbucks becoming a huge company and how it had lost touch with
the common coffee shop customer. The researchers stood outside a small organic specialty shop and
interviewed 100 consumers as they exited the shop. They asked, “Which coffee do you prefer?” The
results showed a preference for a local coffee, tea, and incense shop, and otherwise put Starbucks last
behind McDonald’s, Burger King, and Dunkin’ Donuts.

■ Still another study compared the coffee-drinking experience. A sample of 50 consumers in St. Louis,
Missouri, were interviewed and asked to list the coffee shop they frequented most. Starbucks was listed
by more consumers than any other place. A small percentage listed Dunkin’ Donuts but none
listed McDonald’s, despite their efforts at creating a premium coffee experience. The study did not ask
consumers to compare the tastes of the coffee across the different places.
Joe also wants to find data showing coffee consumption patterns and the number of coffee shops
around the United States, so he spends time looking for data on the Internet. His searches don’t reveal
anything satisfying.

As Joe ponders how to go about starting “A Cup of Joe,” he wonders about the relevance of this
previous research. Is it useful at all? He even questions whether he is capable of doing any primary
research himself and considers hiring someone to do a feasibility study for him. Maybe doing research is
easier than using research.

Questions

1. What are the top three key decisions faced by Joe?

2. How relevant are the coffee taste studies cited above? Explain.

3. Would it be better for Joe to do the research himself or have a consultant perform the work? Why?

4. If a consultant comes in to do the job, what are three key deliverables that would likely be important
to Joe in making a decision to launch the “A Cup of Joe” coffee shop?

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