This document summarizes the history of the coffee industry and compares observations of two coffee shops, The Coffee Bean and Tea Leaf and Starbucks Coffee, located in Power Plant Mall in Rockwell, Philippines. It describes the shops' locations, customer demographics, menus, pricing, and customer service. Key findings are that Starbucks has a better location, more personalized service, and wider target market. The recommendation is for The Coffee Bean to explore additional products like a coffee bar and flavored coffee candies to gain a competitive advantage.

1. Tug Toners MBAH 10B
Deogracias Danguilan
Danae Orig
Rosalynn Pangan
Janice Saraza

2. History of the Industry
 Kiva Han in Istanbul ( then known as Constantinople) was the first recorded public place serving
coffee back in 1475.
 1529 – first coffee shop in Europe was established
 1652 – Britain opened it’s first coffee establishment. Although wildly popular in Europe, the Brits
found out about coffee in Istanbul.
 One cup of coffee costs a penny back then that’s why coffee houses are called “ penny universities” in
Britain.
 When America was colonized, the coffee house was quick to follow. The role of the American coffee
house was the same as those in England: the hotspots for the business community.
 In 1946, Gaggia invented the commercial piston espresso machine, which was far easier to use and
safer than earlier models. The Gaggia coffee bar, in Italy, was the first location to use these machines
and to offer espresso along with the regular coffee. The modern age of coffee houses was born.

3. Scope and Limitation
 This observational study is between two coffee shops located at Power Plant
Mall in Rockwell.
 The Coffee Bean and tea House
 Starbucks Coffee
 Observations were made on a Saturday afternoon between 12:00 pm – 4:00 pm

4. The Coffee Bean and Tea Leaf
Starbucks Coffee

5. Observations
The Coffee Bean Starbucks Coffee
and Tea Leaf
Short Description of the cafe
•A privately-owned, family-run coffee and tea companies in • Founded in 1971 by in Seattle. The company became
the world founded in 1963 by Herbert B. Hyman. publicly traded in 1992.
•Offers over 22 varieties of coffee and 20 kinds of tea. Also •The Power Plant mall branch is one of the 240 stores in
serves pastries and hot meals. the Philippines, and 20, 366 in the world.
Space: Approximately 40 X 40 sqm. •Offers fresh coffee, teas, pastries and sandwiches.
Tables: 19 Space: 40 by 40 sqm
Seating Capacity: 70-90 Tables: 13 smoking ; 21 non-smoking
Ambience: warm Seating Capacity: 150
Food preparation : majority are done in the front service Ambience: hip and trendy
area, although cooking are done in the back kitchen.
Food preparation: All done in the front service area
Business hours: 10:00 AM – 11:00 PM
Business Hours: 6:30 AM - 12:00 MN

6. The Coffee Bean Starbucks Coffee
and Tea Leaf
Location and Customer Traffic
•Located at the 3rdlevel, Cinema area, North wing of the •Located at the ground floor of the Power Plant Mall,
Power plant Mall. beside the void entrance.
•Most customers are residents of the condominium and •Heavy customer traffic since it’s in-front of one of the
cinema goers. Mall’s drop off area. Strategic location being beside the
mall entrance and can cater to smoking and non-smoking
•There are several restaurants around the area but the patrons.
nearest coffee related service is a kiosk of Starbucks
•Several family restaurants surrounding the store.
Facilities
•Restroom and wash area available •Restroom and wash area available
•Wooden tables and chairs •Wooden chairs and tables for smoking area. Soft chairs,
•Soft lighting couches ( for big groups ) in the non-smoking area
•Some of the kitchen activities can be seen by the •All food preparation can be seen by the customer
customers
•Music can only be heard inside the store
•Soothing music
•Electrical outlets available inside the store
•Electrical outlets available for customers with laptops.

7. The Coffee Bean Starbucks Coffee
and Tea Leaf
Customer Demographics
We started to observe their operations from 12:50pm to We started to observe their operations from 1:30pm to
1:30pm. At that time there were 14 occupied tables with 2:30pm. At that time, almost all tables are occupied (11 out
approximately 16 customers: Some were 2 families, 4 of 13) and (17 out of 21) with mixed customers: Some were
couples and group of friends ranging from 35 years and families, couples and group of friends ranging from 25 to 60
above. years old. (43 customers)
Out of the 12 occupied tables, three tables have not ordered Age range: 18 and above
anything. Most of the customers were drinking hot coffee. Profile: Class B and C
Occupation: Students, white collar employees, call center
Age range: 30 and above agents, friends, expats
Profile: Class A and B
Occupation: White-collar employees, retirees, expats
Menu and Pricing
Coffee Beverages ( Hot and Cold ) = 120- 180 php Coffee Beverages ( Hot and Cold ) = 100-150 php
Brewed Teas = 90-120 php Teas = 90 -120 php
Pastries = 75 – 120 php Pastries = 50 – 100 php
Cakes = 130-160 php Cakes = 120 – 140 php
Hot meals = 180 – 300 php Sandwiches = 95 – 150 php
Average Expense per Customer
Coffee = 140 php Coffee = 120-150 php
Coffee + Pastry /Cake = 220-250 php Coffee + Pastry /Cake / Sandwich = 250 - 300 php
Coffee + Hot meal = 350-450 php

8. The Coffee Bean Starbucks Coffee
and Tea Leaf
Costumer Service
• Customers normally wait for 5-8 minutes for their coffees. • wait time 2-5 minutes
•A puck timer will be given to the customer while waiting. •The crew engages with the customers by greeting them as
Once the order is ready, the puck will vibrate and light up they come in the store. They also ask them about their day
signaling the customer to proceed to the pick-up counter. once the customer is in the counter.
•Crew helps customers order by making suggestions.
•They have a replacement policy where you can ask for your
coffee to be re-made if you don’t like it.
•Most of the crews know their patrons and greet them by
their names. They have a more personal approach in
providing service.
Customer Motivation to Visit
Ambience - the coffee shop has soft lighting, warm colors Accessibility
with minimal traffic of mall goers, customers are assured of a Brand recognition
relaxing atmosphere. Provision of smoking area
Because of it’s location, some customers make the store either
a jump off or rendezvous point.
Customer Length of Stay
45 minutes to 1 hour 1-2 hours.
Some customers consider the store as a hangout.

9. Conclusion
Upon careful review of the difference between the two cafe, we believe that
Starbucks has a better advantage in terms of:
1. Accessibility
2. Personalized approach
3. Target market: those waiting for somebody, shoppers, friends (wider range
of market)
4. Brand familiarity

10. Recommendation
For competitive advantage, additional products such
as the following can be explored:
1. coffee bar- where in people can mix their own
brew such as liquor and spices
2. flavored coffee candies
3. more food choices that are organic based