SURVEY PROJECT — FOR MARKET POTENTIAL ABOUT THE IMPROVEMENT PLAN OF “BLUE BOTTLE COFFEE”
In the last decade, Blue Bottle Coffee has proliferated and became an iconic brand of a high-end coffee market since established in 2002. The brand belief and customer resonance leading to the increase of market sharing. Facing fierce competition from other large-scale coffee brands. How can Blue Bottle Coffee sustain the brand lifecycle and achieve the common goal with Nestle, become the leading global brand in the speciality coffee market (Anon., 2017).
Understanding the need and pain points of the customer is the first step to plan the strategy. Following the previous study, “Brand Audit — Blue Bottle Coffee”, there are two weak points of the brand, limited network & high price. Against these two points, there are a couple of suggestions as follows.
The limitation of the market network- Coffee cart and 2 in 1 coffee equipment at home
To achieve the brand’s commitment, the roasted coffee beans must be delivered to customers doorway within 48hrs. Those locations that are too far away and cannot deliver their product within 48 hours exclude Blue Bottle Coffee’s network. Even the café network is also limited by the roasted factory location (unless the café’s space is big enough to install roasted equipment), inconveniences customers.
Inspirited by the initial business model of the brand at the very beginning in 2012. Blue Bottle Coffee can introduce a “Coffee Cart” to deliver the “roasted to order” coffee beans at specific times and locations. According to the Blue Bottle Coffee timetable, customers can select the collection point and time when they order online.
Blue Bottle coffee can take the technology support from Nespresso (another coffee brand under Nestle’s family) to invent “home-based equipment” which integrate roast & grind functions for the coffee aficionado to make “fresh” ground coffee at home. Qualified green coffee beans and tips for the roasted process can provide at Blue Bottle Coffee online shop and class. This vertical product level expansion can break-thru the limitation caused by the brand’s commitment and extend the market’s footprint.
Price issue — Secondary product line for new customer segment
According to the interview of Bryan Meehan, the CEO of Blue Bottle Coffee, balance the price & quality is a difficult mission because of the limitation of location, coffee bean source and high wage (Lurie, 2018). Hence, introducing a secondary product line with a slightly lower price, but the coffee quality is higher than the “standard coffee” in the generic market might be an effective long-term strategy.
The coming survey aims to gain the customer’s insight by collecting and analysing the data to evaluate the potential of strategies as mentioned previously.
Before the survey planning, the brand should define the target audience by analysing the market & customer segment to position the brand and the competitor. This is a critical step to determine the resources allocation to reach the target cluster by correct survey format to obtain valuable data.
Global coffee market segmentation
Current global coffee market segmentation can divide into four groups: Premiumization–led markets, income-led markets, Population-led markets, and Soft driver-led markets[1] (Barry, 2019). Driven by the brand essence, Blue Bottle Coffee has become one of the iconic brands in “The premiumisation-led markets”, which the coffee market is mature with high average consumption. In this market, some clusters do not only “drink” coffee. They pursue excellent quality coffee, and the exclusive coffee experience aligned with the chief belief of Blue Bottle Coffee.
Target customer segmentation
According to the information from previous Brand Audit, the target audience of Blue Coffee Bottle can refer to a cluster aged between 25 to 40 years old who are clamouring for the actual coffee taste in the fresh cup at home and Café, enjoy the transcendent tasting experience of artisanal coffee with the “Coffee Community”. They are loyal members of the brand. In addition, another cluster aged between 45 to 65, who are working professionals, retired folk, or tourists, who have the same psychographic factor as the primary cluster, is the secondary target segment. In term of the geographic base, Blue Bottle Coffee concentrate their network on well-developed countries/cities where customers average income is high and able to afford the premium coffee prize. (Detail see Figure 1).
Brand Personality & Customer Persona
A consistent brand personality with customer’s traits benefited the brand value and resonated with the core segment. According to the framework of brand personality from Aaker’s research, Brand Personality defines as the human characteristics associated with a brand (Aaker, 2000). Bottle Coffee can define the dimension as “Excitement” with a “Unique” coffee taste and experience (see Figure 2). This links up the core target segment’s attributes of Customer Persona shown in Figure 3. By dressing up the customer with demographic detail, behavioural, traits. The brand can understand the goals, frustrations, and consumption patterns of the cluster. This archetype let the brand spotlight the specific cluster that contained the same traits.
Comparison of the target customer segmentation of Competitor — Starbucks Reserve
Identifying the potential customer characteristics by analysing the market segmentation of the competitor support the brand to understand the limitation of the current market segment and mirror the brand’s weakness. In addition, the business trend of a competitor can assist the brand in determining the marketing strategy to avoid head-to-head competition.
According to the latest U.S Industry Overview & Market Statistics (section of Specialty Food Stores), Starbucks occupied the largest segment of the coffee market (Anon., 2021).
Going back to the previous section about the global market segmentation, Blue Bottle Coffee belongs to “Premiumization–led markets”. Meanwhile, Starbucks targets an “Income-led market”, customers who require a standard coffee quality at with convenience & acceptable price to fulfil the busy and fast lifestyle.
Because of different market segmentation, there is no horizontal competition between Blue Bottle Coffee and Starbucks previously. Nevertheless, this situation changes until Starbuck introduced the “Starbucks Reserve” program in 2010 (Harris, 2014). To prevent the market share reduced by the high-end coffee brand is the aim of this program. They introduced a “Theme Park” Café to create an exciting and trending place, offering great coffee and gimmick beverage/food customers. Starbucks steps into the high-end coffee industry and becomes a strong competitor of Blue Bottle Coffee.
Figure 5 show the comparison of the market segmentation of Blue Bottle Coffee & Starbucks Reserve in Demographic, Geographic & Psychographic base. A couple of segments are similar and overlaps, such as millennials (aged 25 to 45), occupation (professional /white collar), commercial/office district of touchpoint location, and premium quality coffee. Take advantage of the vast market network. The cover range of Starbucks Reserve is more comprehensive than Blue Bottle Coffee in terms of Demographic and Geographic base. However, there is no online store delivery service provided by “Starbucks Reserve” (mobile order only provided by “Starbuck” and delivery service operated by third parties, like Uber Eats). Moreover, limited types of artisanal coffee equipment are available in their café only.
Thus, to cover the gap of the market, the suggestion at the beginning of this article about the new home-based 2 in 1 equipment with roast and grind functions, as well as the “coffee cart” delivery campaign, might be the forceful way to rich the handcrafted coffee-making experience of the customer and strengthening the online shop network of Blue Bottle Coffee.
Survey Format
Given the above analysis and hypothesis, a survey can be conducted to collect the customer’s vision to examine the potential of the strategies mention earlier.
Due to the major target customer segment is Millennials who are familiar with the mobile application. The most effective way is to create the questionnaire in “in-apps’ format and distribute it via the Blue Bottom Coffee online platform. To enhance the participation rate of the Survey, a QR code to be generated for the respondent who completed the questionnaires to redeem discounts/gifts at Cafes. Align with the brands’ core value, “Hospitality”, baristas can interview specific core members (the customer persona in Figure 3) at the café. Baristas will prepare a free fresh cup with personal taste to gratitude the interviewee.
The above distribution format can only reach the current customer. To be more proactive, a survey can be conducted by “Tasting Coffee cart”. This “Cart” will drive to some locations where are far away from Blue Bottle Café, such as colleges/universities, theme parks or residential areas, to survey students/young adults (aged 18 -24) who are not the current customer segment but included in competitor’s segment (Starbucks Reserve). Free ready to drink products will distribute to the people who complete the on-site survey and subscribe to Blue Bottle Coffee’s social media platform (Facebook or Instagram). This is a prelude to the “Coffee Cart” campaign while exploring other potential customer segments for secondary line/product planning.
Questionnaire detail
There are 11 questions in the questionnaires to collect the responses from the target customer. Generally, these questions divide into four groups as below:
Figure 6: These three questions collect the demographic and geographic data of the customer as well as the consuming habit. Through these questions, the brand knows the customer proportion of age group and occupation. Distribution of customer’s working/living location. Measure the consuming pattern by quantifying the consuming location.
Figure 7: Consumer’s value and behaviour to be obtained from these four questions. The reason for drinking coffee and the selection of coffee brands are the enlightenment for long term business planning. Customer’s value (e.g. price range) can estimate after collecting the answer from coffee drinking frequency & money spent proportion. These two quantitative answers can measure how the customer is fascinated by coffee.
Figure 8: Above questions focus on the customer knowledge and fondness for Blue Bottle coffee. “How to know the brand?” tell which is the significant media to showcase the brand. This is the necessary knowledge for promotion. Products/service selection and ranking let the brand know the brand’s strengths and weaknesses.
Figure 9: These two specific questions were set up for the “home-based roast and grind coffee bean” equipment. The answer reflects the development potential of the 2 in 1 home-based coffee making equipment in the markets. More customers interested in roast coffee beans at home, the higher the success rate of this equipment.
How to analyse in different combinations
According to improvement plans, data received from the survey can be analysed based on the following combination:
“Coffee Cart” Campaign
The combination in Figure 10 can show the demographic & geographic proportion to measure who and how the location affects the customer consumption. Link up the demographic and geographic data. The brand will know which cluster’s consumption will be affected by location. If the target persona is the majority, the idea of delivering the pre-order coffee is the correct direction. In opposite, the brand can reconsider or develop another campaign to cover this problem of that cluster. Also, the parking location and schedule/time (morning, afternoon, or evening) of the Coffee Cart can be planned based on the data from these questions about the drinking location and frequency. The promotion plan can be determined by the outcome of the question “how do you know Blue Bottle Coffee?”.
Home-based “Roast and Grind” coffee bean equipment
The brand will know who and how many clusters will interest roast coffee beans at home through this combination. Frequent of making and drinking coffee assist the brand to measure the market potential & examine the price range of this equipment. For instance, will people spend USD 1,000 on this equipment if they make coffee at home once per month only? This is critical data for the brand to allocate the investment and understand the market trends. Comparing the cluster proportion of “making coffee” and “roast coffee” scope can evaluate who and why they are willing to make coffee at home but not interest to roast coffee. Is it caused by time, tools, or lack of knowledge? Learning why the customer is not interested in roasting coffee beans, even making coffee at home, is necessary for the brand to design another plan if the customer’s response is negative.
Secondary products
The establishment of a new product line requires the collection of massive data for analysis purposes. These nine questions in figure 12 aim to capture the consuming pattern and behaviour by different consumers and the influence of geographic plus psychological factors. Through occupation, coffee drinking frequency and average monthly consumption can estimate the acceptance of price range in different ethnic groups. The reasons for drinking coffee in different clusters, preferences and choices of the brand and products/services are critical elements leading the trend of new products line. Geographic data and questions about knowing the brand provide the hint on distribution format & promotion plan.
Personal Reflection
The survey is a metrology process of collecting data from a predefined group to obtain information and insights on a specific subject. The most challenging part of this study is how to collect useful information with the fewest and simple questions. Correct format & common language should be applied to convey the message to the target audience. This principle applies in the survey process, but also same as the communication process of the personal working process, especially with the brand management team.
Usually, those management’s schedules are tight, and the time allows for staff to get the comment is limited. Preparing the agenda or question list (like the survey questionnaire) and supporting data (survey result) before the meeting is crucial to keeping the meeting short and efficient.
In addition, design or problem-solving methods cannot rely on personal imagination only. It should be supported by factual data from different fields. The market research and customer survey is an excellent opportunity to trigger multi-faceted ideas, thereby creating more explosive ideas and solutions. This comprehension facilitates problem-solving skills in a personal career.
Notes [1] Four groups of coffee market: In the premiumization-led market, coffee is a well-established portion of consumers lifestyles. The coffee market is highly mature with high average consumption. The income-led markets and rising income of people lead to the increase of consumers who embrace coffee as a sign of middle class. Coffee shops are important media for consumers to learn about coffee and to serve a social role. In the population-led markets, coffee drinker of this market is rising but restricted by income, which means basic, affordable coffee like instants coffee is the key product. The soft driver-led markets, this market is immature and the smallest one of four groups. Coffee consumption because of coffee shop expansion, new product launches and promotional campaigns (Barry, 2019).
References
Aaker, J., 2000. Dimensions of brand personality, CA : Stanford Business,
Anon., 2017. Nestle acquires major interest in Blue Bottle Coffee. [Online]
Available at: https://www.nestle.com/media/pressreleases/allpressreleases/nestle-acquires-majority-interest-blue-bottle-coffee
[Accessed 24 July 2021].
Anon., 2021. Blue Bottle Coffee Revenue, Growth & Competitor Profile. [Online]
Available at: https://incfact.com/company/bluebottlecoffee-oakland-ca/
[Accessed 24 July 2021].
Barry, M., 2019. 4 Types of Global Coffee Markets. [Online]
Available at: https://blog.euromonitor.com/4-types-of-global-coffee-markets/
[Accessed 24 July 2021].
Harris, J., 2014. Starbucks gets fancy with Reserve roastery, tasting room, coffees. [Online]
Available at: https://www.latimes.com/food/dailydish/la-dd-starbucks-reserve-roastery-tasting-room-20140904-story.html
[Accessed 26 July 2021].
Lurie, J., 2018. Playing with A Lead: Blue Bottle has a considerable financial edge on competitors. Now what?. [Online]
Available at: https://www.forbes.com/sites/joshualurie/2018/09/28/playing-with-lead-blue-bottle-has-considerable-financial-edge-competitors-now-what/?sh=3a5b4177274e
[Accessed 26 July 2021].
Merced, M. J. d. l. & Strand, O., 2017. Nestle Targets High-End Coffee by Taking Majority Stake in Blue Bottle. [Online]
Available at: https://www.nytimes.com/2017/09/14/business/dealbook/nestle-blue-bottle-coffee.html
[Accessed 24 July 2021].
Images & Illustration
Figure 1. Current target segmentation of Blue Bottle Coffee
Figure 2. The Big Five dimension of Brand Personality by Jennifer Aaker 1997. Table source: vemt.com
Figure 3 Customer Persona of Blue Bottle Coffee
Figure 6: Questionnaire detail: Demographics, Geographics/Behavioral questions
Figure 7: Questionnaire detail: Psychographics & Behavioral questions
Figure 8: Questionnaire detail: Psychographics & Behavioral questions
Figure 9: Questionnaire detail: Behavioral questions
Figure 10 Questionnaire for Coffee Cart Campaign
Figure 11: Questionnaire for Home-based “Roast & Grind” equipment