The Product Development course requires students to create a new product and an analysis to determine if the product created should, or should not, move forward. This was then presented in front of the professor and the entire class.
3. SLIDESMANIA
SLIDESMANIA.C
Our Solution
• Tailored coffee shop
• Self-serve and customizable flavors
• Swipe card associated with customer’s phone
number
• App that allows drinks to be pre-saved for later use
• AI gives recommendations
• Flavor rotation (per season)
• Charge by the ounce
4. SLIDESMANIA
• Location: 32601, Gainesville, Florida
• Demographic Groups:
• 25 Up-and-Comers
• 50 Metro Grads
• 48 Generation Web
• 13 Upward Bounds
• 47 Striving Selfies
• Main Demographics Formed:
• Low income middle age
• Renters without kids
• High-income families with parents who graduated with college degrees and who have
children
• Families who like to travel
Segment Description
5. SLIDESMANIA
Why 32601?
• College students = 3/5 of the population
• Highest percentage (%) of people who
attend college in Gainesville, Florida and out
of most zip codes in the world
• Average income is less than $15K a year
• 58% of the population age is 21- 44 years
old
• Demographic Conclusions:
• Price cautious
• Academically focused
• Main focus: college students
• Creates individual/group study space
atmosphere
6. SLIDESMANIA
Target Market
Geographic Demographic Psychographic Behavorial
• UF college
students that live
in the 32601 area
code
• College students
18-26 years old
• Price cautious • Avid coffee
drinkers
• Male/female • Academically
focused
• Study often
(average amount
of studying per
week = 17 hours)
• Income range: <
$15,000 a year
• Busy schedules • Busy schedules
• Needs coffee for
on the go
7. SLIDESMANIA
SLIDESMANIA.C
• 18 coffee shops within the 32601
area
• Starbucks has 36% of the market
• 64% of the market is left
• 64%/17=3.76%
• 3% market share: start small and
scale fast
• Total population of zip code 32601:
17,033 people with 84% of the
population being college students
• Total estimated size of the market:
14,307 college students (17,033 x 0.84)
• 92% of college students drink coffee
• 13,162 potential customers in the
market (14,307 x .92)
Size of the Market: Market Share:
10. SLIDESMANIA
SLIDESMANIA
How The Adoption
Was Estimated
• An independent coffee shop can sell, roughly, 300
cups of coffee per day (NCA)
• A large chain coffee shop can sell 700 cups of coffee
per day
• Students consume 2 cups of coffee daily, on
average
• The average price of a typical cup of hot coffee in
the U.S. is $2.70
• UF minimum instruction days per semester:
• 81 days in Fall
• 81 days in Spring
• 29 days in Summer A
• 29 days in Summer B
12. SLIDESMANIA
SLIDESMANIA.C
Anticipated Startup Costs
Initial Cost:
$8,000
Refrigerator Cost:
We anticipate an initial set up
cost of about $70,000 in one year
Espresso Machine Cost:
$2,000
App Development:
Espresso Grinder Cost: Furniture Cost:
We estimate a charge of $30,000 in
year one (1) for app development
$3,000
An espresso machine for the
barista area is $26,000
13. SLIDESMANIA
SLIDESMANIA.C
Anticipated Annual Costs
● Calculating Fixed Labor Cost:
● Coffee purchase experience is self-serve
● One barista on-site for specialty drinks and
store upkeep
● Weekday store hours: 7 a.m. - 8 p.m. or 13
hours/day
● Weekend store hours: 10 a.m. - 6 p.m. or 8
hours/day
● Closed for 9 weeks a year while UF is on break
● This equates to 215 week days and 86
weekends
● Total hours per year: 3,311
● Employees earn $10 an hour
● Total fixed labor cost: $33,200
14. SLIDESMANIA
SLIDESMANIA.C
Anticipated Annual Costs Continued
● Calculating Fixed Real Estate Costs:
● Available retail space within walking
distance from UF
● Available space cost: $21 per square
foot annually
● Anticipated space needed: 800 square
feet
● Anticipated spending rate: $16,800 per
year on leasing costs
15. SLIDESMANIA
SLIDESMANIA.C
Anticipated Annual Costs Continued
● Advertising costs: $20,000 annually
● Leasing “Digital Pour” tap equipment: $1,200 a
year, as a fixed cost
● Variable cost: $1.10 per cup
● Cost per cup of coffee include: $0.30 for beans,
$0.16 for the cup, $0.30 for milk (estimating $3 a
gallon and 10 oz per drink), and $0.20 for
flavoring
● We estimate $0.14 per cup for costs such as
machine maintenance and utilities
16. SLIDESMANIA
SLIDESMANIA
Projected Revenue
• Variable cost: $1.10 per cup of coffee
• Fixed cost: $51,200 per year
• Advertising expenditure: $20,000 per year
• Anticipated startup cost: $70,000
• We used the following formulas to calculate our estimates:
• Year 1: $509, 901 - (188,852 cups sold x $1.10 cost per cup) - $51,200 - $20,000 - $70,000 (star
up costs) = $160,963. 80
• Year 2: $611, 882 - (226,623 cups sold x $1.10 cost per cup) - $51,200 - $20,000 = $291,396.70
• Year 3: $730,857 - (270,668 cups sold x $1.10 cost per cup) - $51,200 - $20,000 = $361,922.20
20. SLIDESMANIA
Overarching Business Case Model that Generates Revenue
and Break Even Point
• Target Market:
• Coffee drinking college students located in Gainesville, FL who have an average
income of less than $15,000 a year
• Our target market does not like waiting in long lines or overpriced coffee
• The Busy Bean will solve these problems by providing shorter wait times,
customization, and affordable pricing
• Measure of success:
• Meeting our goal of 3% market share
• Projection of 1 million coffees sold by Year 5
• Launching within 16-18 months
• Adoption rate of 170,000 units of coffee sold in Year 1
• Generate revenue by using the sales model
21. SLIDESMANIA
● Advertising:
● Twitter, Instagram, Facebook
● Word of mouth
● Local event partnerships
● Resources Required:
● Machinery
● Baristas/workers
● Rent
● Startup Cost:
● Startup and fixed cost = $140,200
● Average price of coffee ordered: $2.70
● Variable cost = $1.10 per coffee
● Projected revenue for Year 1: 160,963
● Breakeven point: end of Year 1, start of Year 2
Overarching Business Case Model That Generates Revenue
and Break Even Point Continued
23. SLIDESMANIA
“The lines are too long, the
service is slow, my order is
incorrect, and they don’t have
the correct ingredients half of
the time”
- Interviewees
24. SLIDESMANIA
SLIDESMANIA
What Our Potential Customers Have to Say About Current Coffee Shops
-Nicole
“They do not make my order right and it
comes out too sweet”
“The wait time in Starbucks West is
ridiculous”
-Paola
“I often find myself waiting in line for
Starbucks and they have run out of
ingredients by the time I am able to
order my drink”
-Hillary
-Mike
-Christy
-Gabriel “The lines are too long and it is
important to fix the issue as if it is not
taken seriously, I will likely not be
coming back”
“It’s always so crowded”
“Really long lines at the on-campus
Starbucks at the times I want coffee”
25. SLIDESMANIA
What Potential Customers Think of The Busy Bean
“Seems like a great idea with a
reasonable price”
“I would be saving a lot of money by purchasing from
The Busy Bean considering that I buy coffee 6 days a
week”
“Since the store location would be located next to campus
and Midtown, I think it’ll do great there”
“I like that I can scan the card and access as much
coffee as I please and customize it the way I want”
“It’s cheaper than going to Starbucks twice”
“I honestly like the concept of unlimited coffee,
customizable coffee, and it is reasonable”
-Kelsey -Michaela
-Jordyn
-Gabriel
-Christy -Mike
26. SLIDESMANIA
Proposed Product Adjustments and Results
• Adjustments:
• Originally a subscription service
• $10 a month for 1 coffee a week
• $15 a month for 2 coffees a week
• $20 a month for unlimited coffees a week
• 80% interested in the subscription service
• Results:
• Switched to pay-per-ounce
• Increased customer satisfaction
• More parties interested in The Busy Bean
28. SLIDESMANIA
Works Cited
● Dimberg, Kelsey Rae. “This Is Why You Should Skip the Drive-thru at Starbucks.”
Taste of Home, Taste of Home, 25 Feb. 2020,
https://www.tasteofhome.com/article/why-you-should-skip-the-starbucks-drive-
thru/#:~:text=According%20to%20Bloomberg.com%2C%20Starbucks,window%20
orders%E2%80%94a%20huge%20percentage.
● "How Many Cups of Coffee Does A Coffee Shop Sell Per Day?" Start My Coffee
Shop, Retrieved Dec 6 2021, https://startmycoffeeshop.com/how-many-cups-of-
coffee-does-a-coffee-shop-sell-per-
day/#:~:text=According%20to%20the%20National%20Coffee,cups%20of%20coff
ee%20per%20day!
● Lock, S. “U.S. Coffee Chains Market Share 2019.” Statista, 24 Nov. 2020,
https://www.statista.com/statistics/250166/market-share-of-major-us-coffee-
shops/.
● “Prizm® Premier.” Claritas, https://claritas360.claritas.com/mybestsegments/.
● "The impact of caffeine on college
students"https://uwpexponent.com/features/2021/05/07/the-impact-of-
caffeineoncollegestudents/#:~:text=Level%20of%20Consumption%3A%20The%2
0average,over%20two%20cups%20of%20coffee.
● "University of Florida Academic Calendar Guidelines"
https://fora.aa.ufl.edu/docs/47/17Apr18/ProposedCalendarChanges.pdf
