THE TEA HOUSE PROJECT Marketing Research Team Reshma Gala Shawn Kline Jae-Yeon Joo Amol Chopra MKTG-652

November 20, 2002MKTG 652 Drexel University Introduction: The Concept Coffee a very popular beverage among Americans. Presence and success of cafés specializing in coffee. Example: Starbucks and Cosi No predominant presence of café specializing in serving tea

November 20, 2002MKTG 652 Drexel University Introduction: The Concept Success of coffee and cafés in tea drinking countries, ex: India, Taiwan, Korea, China, Russia Therefore test the feasibility of tea and tea house in coffee drinking country America, specifically in the tri-state area.

November 20, 2002MKTG 652 Drexel University Purpose of Research Is it feasible to introduce a Tea House in the tri-state area? Who should be our target market? What are the current consumption patterns of our target market? What price should we charge for a cup of tea? Will the Tea House concept work?

November 20, 2002MKTG 652 Drexel University Objectives and Hypothesis Men and women between the age group of 18 and 30 years, both students and young working professionals, with a higher disposable income would be willing to visit Tea House People would be willing to pay between $1 and $3 for a cup of tea People already visiting café would be willing to visit Tea House

November 20, 2002MKTG 652 Drexel University Objectives and Hypothesis People giving more importance to nutritional value while choosing a beverage would be willing to visit Tea House Recognize a pattern as to the part of the day people would be willing to visit the Tea House Understand the ethnic background of people willing to visit the Tea House

November 20, 2002MKTG 652 Drexel University Objectives and Hypothesis General awareness of different types of tea – Black Tea, Green Tea, Oolong Tea, Chai General awareness of different forms of tea consumption – Tea bags, Iced Tea, Loose Tea Places people generally buy their beverages from – Convenience stores, vending machines

November 20, 2002MKTG 652 Drexel University Objectives and Hypothesis Understand the current café-visit habits – Frequency of visit – Accomplice – Average spending per visit – Other products consumed in a café

November 20, 2002MKTG 652 Drexel University Survey Sample Size: 99 Location: Pennsylvania, New Jersey, and Delaware Collected at work places and colleges (Drexel & UD) Convenience sample was used for pretest of questionnaire

November 20, 2002MKTG 652 Drexel University Survey Demographic info of respondents AGE % % % 55-above 1% GENDER Male 39% Female 61%

November 20, 2002MKTG 652 Drexel University INCOME below 25k 40% 25k~ 35k 8% 35k-50k 20% 50k-75k 14% 75k-100k 17% 100k-above 1% Survey Demographic info of respondents OCCUPATION Student 40% Working Professional 57% Others 3%

November 20, 2002MKTG 652 Drexel University Survey Demographic info of respondents ORIGIN African American 19% Asian 25% Caucasian 51% Hispanic 4% Other 1%

November 20, 2002MKTG 652 Drexel University Questionnaire 22 Questions – Nominal scale: gender, origin – Interval scale: income, price related – Ordinal scale: consumption pattern – Ratio scale: income, frequency of visit café – Open end question

November 20, 2002MKTG 652 Drexel University Target Market Analysis: Age H o : Decision to visit a tea house is independent of the age of a person H a : Decision to visit a tea house depends on the age of a person. Analysis: Asymp. Sig. (2 sided) > 0.05 ACCEPT NULL Conclusion: People in the age group of 18 to 30 will not necessarily visit a tea house.

November 20, 2002MKTG 652 Drexel University Note : Number of respondents under age of 18 = 0 & over age of 56 = 1

November 20, 2002MKTG 652 Drexel University Target Market Analysis: Income H o : Decision to visit a tea house is independent of the income of a person H a : Decision to visit a tea house is dependent on the persons income Analysis: As Asymp. Sig. (2 sided) > 0.05 ACCEPT NULL Conclusion: Persons with a high disposable income of over $50,000 p.a. will not necessarily visit a tea house

November 20, 2002MKTG 652 Drexel University

November 20, 2002MKTG 652 Drexel University Target Market Analysis: Gender H o : Decision to visit a tea house is independent of the gender of the person H a : Decision to visit a tea house is dependent on the gender of a person Analysis: As Asymp. Sig. (2 sided) > 0.05 ACCEPT NULL Conclusion: No indication that a particular gender group would be more inclined to visit a tea house, than another group.

November 20, 2002MKTG 652 Drexel University

November 20, 2002MKTG 652 Drexel University Target Market Analysis: Occupation H o : Decision to visit a tea house is independent of the occupation of a person H a : Decision to visit a tea house is dependent on the occupation of a person Analysis: As Asymp. Sig. (2 sided) > 0.05 ACCEPT NULL Conclusion: It is not necessary that only student will be interested in visiting the tea house.

November 20, 2002MKTG 652 Drexel University Note : Number of retired respondents = 1

November 20, 2002MKTG 652 Drexel University Target Market Analysis: Origin H o : Decision to visit a tea house is independent of the origin of a person H a : Decision to visit a tea house is dependent on the origin of a person Analysis: As Asymp. Sig. (2 sided) > 0.05 ACCEPT NULL Conclusion: It is not necessary that persons belonging to a certain ethnic background will be interested in visiting the tea house.

November 20, 2002MKTG 652 Drexel University Note : Number of respondents from other background = 1

November 20, 2002MKTG 652 Drexel University Consumption Patterns H o : Decision to visit a tea house is independent of the decision to visit cafes H a : Decision to visit a tea house is dependent of the decision to visit cafes Analysis – Asymp. Sig. <.05; REJECT NULL – Conclusion: People who currently visit cafes are more likely to visit a tea house

November 20, 2002MKTG 652 Drexel University Consumption Patterns (continued) H o : Decision to visit a tea house is independent of the individuals concern for nutrition H a : Decision to visit a tea house is dependent of the individuals concern for nutrition Analysis: – Asymp. Sig. >.05; ACCEPT NULL – Conclusion: People who are concerned about nutritional value of their beverages will not necessarily visit a tea house

November 20, 2002MKTG 652 Drexel University

November 20, 2002MKTG 652 Drexel University

November 20, 2002MKTG 652 Drexel University

November 20, 2002MKTG 652 Drexel University Pricing Assumption: Majority of visitor would pay $1 ~ $2.99 for a cup of tea Result of Frequency test: very supportive – Under $1: 11.2% – $1 ~ $2.99: 71.9% – $3 ~ $ 4.99: 13.5% – $5 ~ $6.99, $7 ~ 9.99, & $10 ~ above: 1.1% each * Majority of People(30.2%) who willing to visit Tea House answered they pay for $3 ~ $6.99 per visit in Café

November 20, 2002MKTG 652 Drexel University Appraisal Diversity of respondents with regard to gender, age, income and occupation Questionnaire : – Short sightedness in including few questions – Difficulty in analyzing open ended questions – Structure of some questions

November 20, 2002MKTG 652 Drexel University Future Opportunities First Step – Green Signal – overall acceptance among variety of age groups, income segments and occupations. Further research and analysis can be done on – specific location – frequency of visit to a tea house – snacks to be served along with tea – ambience people would be expecting in the Tea House – secondary research

November 20, 2002MKTG 652 Drexel University Summary Primary Research on Feasibility of a Tea House in the Tri-state area. Survey by using Questionnaire. Statistical Analysis using SPSS Statistical Tools – Cross tabulation – Frequency Counts

November 20, 2002MKTG 652 Drexel University Conclusion An executable idea – Tea House Accepted by the market Further analysis required for specific aspects

November 20, 2002MKTG 652 Drexel University Thank You!!! Questions?