RESEARCH PROPOSAL SETTING UP A COFFEE SHOP

1.Abstract

Setting up a coffee shop can be recognized as beauty to be enjoyed and carving to be cultivated. This idea has lead to setting up a coffee shop chain in Riyadh, Saudi Arabia where consumers’ trends are rapidly changing due to shifts in lifestyles.

The coffee shop has the aim of becoming a daily necessity for local as well as the foreign expatriate who are coffee addicts.  It will offer a comfortable environment where people can try to escape the daily stresses of life. With growing demand for premium-quality coffee and great services, the coffee shop will capitalize on its proximity to the airport and major shopping malls, hotels and restaurants in Riyadh, Saudi Arabia to build a core group of repeat customers. The coffee shop will offer the best-prepared coffee complimented with pastries amid the proliferation of multinational chains such as Starbuck, Ranco, Dr. Coffee etc..

It is evident that coffee business is increasingly becoming price-sensitive; hence the coffee shop will also offer variations at a lower price to market the expatriates who cannot afford the premium quality coffee.

The coffee shop’s offering of tasting coffee beverages will be achieved by using premium-quality ingredients and strictly followed preparation guidelines. The shop will try to maximize the sales of higher margin espresso drinks by creating unique store layout, menu listing and marketing activities fine-tuned to the culture of the Saudi Arabian market. It will also offer refreshment beverages along with the espresso drinks, brewed coffee, and teas at the shop. As consumer trends have shown that some consumers prefer to prepare coffee at home, the coffee shop will also be selling coffee beans.

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2.Problem Statement

“Setting up a Coffee shop chain in Riyadh, Saudi Arabia”

Objectives

The idea of setting a coffee chain in Riyadh, Saudia Arabia has the following objectives to achieve:

  • The coffee shop chain will provide an ambiance and environment where people of all ages come and relax.
  • The coffee shop will build a unique image distinguished from smaller coffee bars and shops and would try to emerge as the “Best New Coffee Shop in Riyadh”.
  • The coffee shop will not only focus on only growth plans but also on clearly communicating the values and commitments of the company to their customers.

Target Market:

The Coffee Shop will target all the people who drink non-alcoholic beverages and want to get great-tasting coffee in a relaxing environment. Such customers vary in age including adults-men and women aged 25-40, young adults aged 18-24 and Kids and teens aged 13-17.  As the location is in the proximity to Riyadh Airport, restaurants and hotels, most of the clientele will be expatriates and foreigners who regularly travel across Saudi Arabia for job assignments and various on-going projects in the country. However, further marketing research will be conducted to refine the target market.

Location:

The coffee shop will be located at a central place in Riyadh, Saudia Arabia. This location will be nearest major hotel, restaurants and airport and major international shopping centers such as IKEA, Home Improvement.

Organizational Structure:

The coffee shop, in the beginning, will be operating under a flat organizational structure with fewer hierarchies, in which the sole proprietor will be the key person behind the whole business.  The coffee shop will have a structure where the owner will be able to easily handle entire shop staff and other operating and strategic activities. However, with the business expansion and opening of more coffee shops in the vicinity of Riyadh, and other cities, this structure will be adjusted according to the market demands.

3.Literature Review

The secondary data sources such as academic books, online academic journals, electronic databases, commercial databases, and market research reports on consumer trends, competitors, and social-cultural factors will be used to develop a coherent literature review.

The overall global market of coffee as non- alcohol beverages has shown healthy prospects as its coffee exports have amounted to 7.04 million bags in September 2011 (8.24 million September 2010), however on yearly basis, coffee exports have increased by 9.4% to 103.1 million bags.

Saudi Arabian consumer market of non-alcoholic beverages shows mix trends. Saudi market where per capita coffee consumption was 1.6 kg in 2006 has now increased many folds due to recent shifts in consumers’ choice preferences to a “healthier lifestyle”. This change in consumer trends have attracted a lot of hot tea, coffee and fruit and milk juices providers to open their shops and chains in Saudi Arabia. Furthermore, there are many international coffee chain franchises operating in the major cities of Saudi Arabia.

The lifestyle changes in Saudi Arabia seem healthy for setting up a coffee shop in Riyadh since demand for coffee and other non-alcoholic drinks will increase due to increasing urbanization, improved literacy rates among females, increased openness to the modern world and rising population of expatriates.

4.Methodology:

The business plan will be developed by using exploratory design which would explore secondary sources on consumer trends, socio-cultural and demographic aspects and the overall economic situation of Saudi Arabia. However, primary source especially in conducting marketing research will also be used to get insight into coffee trends in Riyadh.

5.Analysis

The data-qualitative as well quantitative will be analyzed using various marketing research tools. This analysis would lead to developing a comprehensive marketing plan, selling and distribution plan, financial forecasts, and competitor analysis etc.

6.Findings

 

The marketing research findings would enable the owner to decide about opening a coffee shop in Riyadh, Saudi Arabia. Moreover, it would also lead to developing strategies to develop better quality-oriented coffee and refine its marketing and selling strategies fine-tuned to the prevalent beverage consumption trends in Saudi Arabia.

7.Conclusion and Recommendations

 

Based on the research findings and analysis, the viability of the business of opening a coffee shop in Riyadh, Saudi Arabia will be arrived at and if it is viable, various marketing, selling, promotional, distribution and competitive strategies would be recommended.

8.     Bibliography

 

(2004) “Starbucks – taking on the world: Can the coffee retailer join the all-time greats?”, Strategic Direction, Vol. 20 Iss: 7, pp.13 – 15

Joo, J.S. (2010) “Comparative efficiencies of specialty coffee retailers from the perspectives of socially responsible global sourcing”, International Journal of Logistics Management.

International Coffee Organization. (2011), Trade Statistics – September 2011. Viewed November 06,  2011 from http://www.ico.org/.

Tea & Coffee Trade Journal. (20110.  Viewed November 06 2011, from http://www.teaandcoffee.net/1208/feature.htm

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