Project 1: Product Diversification
Project 1: Product Diversification
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Scenario
Scenario
Campus Brews, a coffee shop near The Ohio State University, is considering expanding its current hours of 6 AM - 3 PM to 6 AM - Midnight and adding alcoholic beverage offerings.
Our objective was to analyze customer demand, competitive positioning, and financial viability of extending Campus Brews operating hours to ensure an informed, data-driven decision.
Research Methodology
Research Methodology
Survey
Survey
Conducted a digital survey among students, faculty, and residents to gauge interest in late-night service and alcohol options. The survey was open for 2 weeks and was available via QR code on fliers posted inside Campus Brews and at various locations within a 1-mile radius of OSU’s campus. Target sample size was ~300 participants. A coupon for a free coffee was given as incentive for completion.
Competitive Analysis
Competitive Analysis
Analyzed bars within a 1 mile radius of Campus Brews and recorded their hours, beverage offerings, and pricing. We also analyzed traffic trends using Google's "popular times" feature for locations.
Secondary Research
Secondary Research
Read publications on the trend of alcohol consumption among college students.
Researched Ohio state regulations and licensing requirements for alcohol sales in a café setting.
Gathered data on population numbers of nearby residents and the demographics to determine market size.
Financial Feasibility
Financial Feasibility
Ran a cost-benefit analysis of extended hours, including projected revenue increase vs additional expenses.
Provided a suggested pricing strategy based on beverage prices of bars in the area as well as customer price sensitivity data from the survey.
Key Findings
Key Findings
Opportunity to meet new market demand for mocktails
Opportunity to meet new market demand for mocktails
Results of our survey showed that 50% of respondents expressed interest in non-alcoholic beverages. This is supported by trends in alcohol consumption showing that 57% of millennials and 65% of Gen Z are drinking less alcohol. Our competitive analysis showed that only ~24% of bars within a 1 mile radius of OSU's campus offer non-alcholic beverages on their menu. Thus adding a premium mocktail offering during extended evening hours would give Campus Brews a competitive edge.
Risk in extending hours Sunday - Wednesday
Risk in extending hours Sunday - Wednesday
An analysis of “busy hour” trends amongst competitors, coupled with the results of the survey suggest that Sunday–Wednesday may have much lower occupancy. This presents a risk to profitability if sales cannot justify the staffing needs
Extended hours Thursday - Saturday have profitable projections
Extended hours Thursday - Saturday have profitable projections
Financial projections show that extended hours Thursday to Saturday could bring in an additional $9.3k of profit per week. Full detail of pricing strategy and financial projections can be found below.
Survey
Survey
Financial Projections
Financial Projections
Competitive Analysis
Competitive Analysis
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