The O-Bar Concept Test   Marketing Research Methods: Jon Ragatz Presented by: Michaela Biaggi Vanessa Fincher Mandy Gamarra Aaron Hill Fall 2008  

Research Overview: The Concept Test An exclusively organic Bar in San Francisco   THE DETAILS Serve only organic drinks: such as, organic beer, wine and hard liquor as well as organic mixers and other organic beverages California focusing on San Francisco Bay Area residents and visitors.  The Green MBA team (Team O) envisioned a bar, temporarily named

Organic Alcohol Findings -Organic beer sales grew 29 percent organic wine grew 13 percent last year. -Three hotel chains: Ritz-Carlton, Marriott and Kimpton Hotels -- now carry organic alcohol in their bars.  -Organic bars have opened in New York City and London "It is nevertheless a niche market that lags behind the overall market for organic foods and non-alcoholic drinks."

Key Research Objectives 1.To determine the level of interest in an exclusively organic bar located in San Francisco 2.To determine the desired characteristics of an organic bar, such as preferred ingredients, atmosphere and parking. 3.To determine if the organic bar market would tolerate premium pricing for organic drinks   which we further broke down into 8 sub-objectives

Hypotheses   Null Hypothesis: H0: There is no relationship between customers’ bar choice and serving exclusively organic alcohol Alternative Hypothesis: H1: Customers will choose a bar serving exclusively organic alcohol

Methodology Response: Survey Period: -Online Survey (Survey Monkey) -Compiled email list of friends, family, GMBA community -Screened respondents for legal drinking age & bar usage    Survey Period: -Emailed survey link: November 11, 2008 -Closed survey: November 20, 2008 Response: -184 qualified -154 completed survey 100%

Survey Sample

Sub-Objective 1 To determine general bar behaviors of our survey respondents Of the survey respondents who passed the above mentioned screening criteria, 87.5% had frequented a bar within the last six months.  52% surveyed visited a bar on average three or more times per month.  (See Chart 4 below) In response to the question asking for the number of drinks consumed per bar visit, 48% surveyed consume one to two drinks while 39% consume three to four drinks per bar visit. (See Chart 5 below)

Sub-Objective 2 To determine organic alcohol purchasing behaviors at bars and restaurants, and retail outlets Only 5% of survey respondents had purchased organic hard liquor at a restaurant, bar, or retail outlet. While a larger percentage of respondents have purchased organic beer and wine at these establishments. Survey respondents have purchased organic beer, respectively, 18% at a restaurant or bar and 30% at a retail outlet. Even higher was the percentage of those who have purchased organic wine, respectively, 22% at a restaurant or bar, and 40% at a retail outlet

Sub-Objective 3 If given the choice would the respondent choose an organic alcoholic beverage over a conventional alcoholic beverage 39% of respondents said yes they would choose an organic alcoholic beverage over a conventional alcoholic beverage, while nearly an equal percentage, 40%, stated they were unsure, and 21% said no

Sub-Objective 4 To determine if the concept of the O Bar is an appealing place to drink organic alcoholic beverages 65% of survey respondents said yes, they would go to the O Bar. While 28% of survey respondents said maybe, and 8% said no.  (Chart 8) The significant amount of respondents, 28% who said maybe, reiterates the point that survey respondents are unsure because they lack of awareness, trial, and understanding of organic alcohol. However, we also think that our explanation of the O Bar concept was not informative enough and that the placement of this question as to whether they would like to go to the O-Bar should have been nearer to the end of the survey. This is explored further in our Limitations section below. 

Sub-Objective 5 To determine accessibility preferences of bar goers when traveling to the O Bar Preferences extremely and somewhat important: 90% Proximity of the bar to ones home 70% proximity to other bars and restaurants Close to work and safe neighborhood (recommended by survey respondents). Proximity of the bar to ones home was extremely and somewhat important to 90% of survey respondents.  The second most important accessibility preference is proximity to other bars and restaurants, extremely and somewhat important to 70% of survey respondents.  Bike valet and valet parking were not important features.  This lack on interest in valet parking and bike valet is directly related to respondents preferring the bar to be located near to their place of residence, allowing the ability to walk. Qualitative data from an open ended field accompanying this question, brought to our attention these additional preferred attributes; safe neighborhood and close to places of work.

Sub-Objective 6 To determine if the O Bar a destination bar We asked survey respondents how much time they would be willing to spend traveling to the O Bar, 55% said they would travel 15-29 minutes Implies Geographic Diversity

Sub-Objective 7 To determine respondent’s expectations, preferences and price tolerance levels We posed a question listing attributes of organic beverages and asked our sample to answer which attribute by order of importance are most important to them.  57% do not want preservatives, artificial colors, or refined sugars. Tables have high drop off rates (tables where you rate things). It's more important that organic beer and wine be available than organic hard liquor. (Chart 10) Approximately 50% of respondents stated that it was highly important to have organic beer and wine while only 30% said it was important to hard liquor. Again, the lack of awareness and trial, of organic hard alcohol explains why it ranked lower than organic beer and wine offerings

Sub-Objective 7 To determine respondent’s expectations, preferences and price tolerance levels We posed a question listing attributes of organic beverages and asked our sample to answer which attribute by order of importance are most important to them.  57% do not want preservatives, artificial colors, or refined sugars. Tables have high drop off rates (tables where you rate things). It's more important that organic beer and wine be available than organic hard liquor. (Chart 10) Approximately 50% of respondents stated that it was highly important to have organic beer and wine while only 30% said it was important to hard liquor. Again, the lack of awareness and trial, of organic hard alcohol explains why it ranked lower than organic beer and wine offerings

Sub-Objective 7 To determine respondent’s expectations, preferences and price tolerance levels We posed a question listing attributes of organic beverages and asked our sample to answer which attribute by order of importance are most important to them.  57% do not want preservatives, artificial colors, or refined sugars. Tables have high drop off rates (tables where you rate things). It's more important that organic beer and wine be available than organic hard liquor. (Chart 10) Approximately 50% of respondents stated that it was highly important to have organic beer and wine while only 30% said it was important to hard liquor. Again, the lack of awareness and trial, of organic hard alcohol explains why it ranked lower than organic beer and wine offerings

Sub-Objective 7 To determine respondent’s expectations, preferences and price tolerance levels We posed a question listing attributes of organic beverages and asked our sample to answer which attribute by order of importance are most important to them.  57% do not want preservatives, artificial colors, or refined sugars. Tables have high drop off rates (tables where you rate things). It's more important that organic beer and wine be available than organic hard liquor. (Chart 10) Approximately 50% of respondents stated that it was highly important to have organic beer and wine while only 30% said it was important to hard liquor. Again, the lack of awareness and trial, of organic hard alcohol explains why it ranked lower than organic beer and wine offerings

To gather respondents demographics Sub-Objective 8 To gather respondents demographics We posed a question listing attributes of organic beverages and asked our sample to answer which attribute by order of importance are most important to them.  57% do not want preservatives, artificial colors, or refined sugars. Tables have high drop off rates (tables where you rate things). It's more important that organic beer and wine be available than organic hard liquor. (Chart 10) Approximately 50% of respondents stated that it was highly important to have organic beer and wine while only 30% said it was important to hard liquor. Again, the lack of awareness and trial, of organic hard alcohol explains why it ranked lower than organic beer and wine offerings

To gather respondents demographics Sub-Objective 8 To gather respondents demographics We posed a question listing attributes of organic beverages and asked our sample to answer which attribute by order of importance are most important to them.  57% do not want preservatives, artificial colors, or refined sugars. Tables have high drop off rates (tables where you rate things). It's more important that organic beer and wine be available than organic hard liquor. (Chart 10) Approximately 50% of respondents stated that it was highly important to have organic beer and wine while only 30% said it was important to hard liquor. Again, the lack of awareness and trial, of organic hard alcohol explains why it ranked lower than organic beer and wine offerings

To gather respondents demographics Sub-Objective 8 To gather respondents demographics We posed a question listing attributes of organic beverages and asked our sample to answer which attribute by order of importance are most important to them.  57% do not want preservatives, artificial colors, or refined sugars. Tables have high drop off rates (tables where you rate things). It's more important that organic beer and wine be available than organic hard liquor. (Chart 10) Approximately 50% of respondents stated that it was highly important to have organic beer and wine while only 30% said it was important to hard liquor. Again, the lack of awareness and trial, of organic hard alcohol explains why it ranked lower than organic beer and wine offerings

Conclusions -A majority of the respondents like the O Bar concept. -Respondents prefer bars within walking distance -Appealing ambience is important -Education, awareness, and trial of organic alcohol is necessary

Limitations & Recommendations In Research Design -Assumed people were educated in organic alcohol -Did not describe our service/product adequately -Our limited knowledge in concept testing    In Sample Distribution -Sample frame was biased (family, friends etc) -Online survey excluded those without internet    In Questionnaire -Questions were not designed for full use of stats -Incorrect placement of key question -Definitions needed (eg. SF Bay Area)

Thank You! and Cheers