Question

Question 3 (5 pts).

Read the case below and write a short research proposal for Sam’s Coffee to address their concerns. In particular.

1. determine the marketing problem(s) facing Sam’s Coffee (1pt),
2. determine the main research objectives (1.5pt),
3. For each research objective, what specific research design(s) would be needed? If exploratory research is needed, please identify which technique would you choose (in-depth interview, focus groups, etc.). Justify your choices. (2.5pt).

Sam’s Coffee

Most people enjoy a cup of coffee and a doughnut at some time. You can stop on the way to work to pick up breakfast or sit down and relax with a hot cup. It used to be simple—all you had to do was stop at the neigh­borhood bakery to get that snack. Now there are more choices. The northern states of New England had Sam’s Coffee, the chain providing their morning pick-me-up, while the South enjoyed fresh Otto’s doughnuts. There were a few smaller chains around, but for years, each of these doughnut giants held a proverbial monopoly in its area. Sam’s Coffee traditionally focused more on its coffee products, while Otto’s emphasized the doughnut end of the product line. But now, as each expands throughout the country, those niches are colliding. Another factor is the rising popular­ity of Beans, a gourmet coffee shop chain. With its wide variety of flavored cof­fees and baked goods, Beans is a competitor to be reckoned with.

Otto’s, through popular demand and with great publicity and fanfare, went public in 2015. Several years later, Otto’s had over 400 com­pany-owned stores and was available in 20,000 other outlets, including grocery stores and Gas stations. In 2019, after the hype had dwindled, Otto’s began to face problems. Over expansion and misman­agement caused it to post its first loss since its initial public offering, and the company was forced to close many stores.

Always a far larger chain than Otto’s, Sam’s Coffee franchisees own and operate over 4,400 stores. Sam’s menu has expanded to offer breakfast sandwiches, iced coffee, hot coffee, muffins, bagels, and, of course, doughnuts. Although considered primarily a breakfast stop, there have been attempts to expand Sam’s into the lunch arena. However, its best opportunity for expansion is geographic. With a goal of 15,000 stores within 10 years, Sam’s is thinking large. The newest markets are Detroit, Charlotte, and Tampa.

The two chains never really had to compete against each another before. But now Sam’s, in addi­tion to going head-to-head with Otto’s, has Beans in its sights in terms of coffee sales. At the same time, Otto’s is playing catch-up after its recent overexpansion woes. To show how much Sam’s is willing to invest in its desire to compete with Beans, it introduced an $8,000 cappuccino machine. The machine's simplicity allows any employee to use it and to create and re-create the same consistent cappuc­cino for customers. In another competitive move, Otto’s released its own versions of the popular Sam’s Coolattas. In 2018, Otto’s acquired a coffee line, and in 2019 it used that acquisition to roll out a new line of iced drinks, one of which tastes like its fa­mous sugar-glazed doughnut.

Note: The company names used in this case are fictional.

Answer 1

a. The primary marketing problem in this case is that Sam’s Coffee is unable to maintain a niche for itself. The competition is growing and the company is facing strong competition from Otto’s doughnuts as well as Beans. Sam’s Coffee needs to come up with a strategy for strengthening its market hold and developing a deep customer network for itself.

b. To facilitate the objective of Sam’s Coffee, it is critical that the company has a clear idea of what is the need and requirement of the customers. So following must be the research objectives for the company:

· To identify the specific needs of the customers from a café company

· To identify the preference for lunch and breakfast meals of the customers

c. Research Objective 1: To identify the specific needs of the customers from a café company

· Research design: Exploratory research using focus group interviews. This will help the company to have a clearer insight of what are the primary requirements of customers from the company as well as competition. Focus group interviews will give in-depth insight about the same.

Research Objective 2: To identify the preference for lunch and breakfast meals of the customers

· Research design: Exploratory research using questionnaires. The company is planning to enter the lunch segment. So, it needs to have a better idea that whether the consumers would prefer a café for their lunch options or they would like to go to a Quick serving restaurant (QSR) for the same. Also the types of lunch expected by the consumers can be identified using this design