Retail Midterm

Retail/Wholesale Distribution

Retailing Midterm

Building a coffee shop in Boston requires a large amount of time and research. Some choices I must make include choosing a suitable location for the shop and determining the prices to charge customers. In order to make good decisions I must do a great deal of research in the demographics and psychographic variables of different areas of Boston.

From the attached article, it is evident that Bostonians are not shy about spending money. Therefore, at first glance, Boston appears to be a conducive city for starting a business. The next thing to look at is the type of good coffee is in order to determine what demographics we need to aim the product towards. Coffee is not considered a “luxury” item, so both the poor and the wealthy consume it. This makes choosing a location much easier. This can explain why Dunkin Donuts stores can be found all over the city, instead of just one particular section of town. This factor also affects the pricing models. Coffee is very cheap, so there is not much room to play with in raising prices. The difference in the price of a standard coffee from one coffee shop to another can be measured in cents, not dollars. With all these demographics considered, I can come up with an appropriate location and a fair pricing model.

People do not ordinarily drive out of their way to go to a coffee shop. The shop a person routinely visits is one that is in a convenient location for that specific person. People will drop in a coffee shop as they are walking by or pull over the car and come in to purchase a coffee if it is along their driving route. Because of this, people are not as loyal to brands when it comes to coffee as they may be with other items—it is all about convenience. The location I have come up with is a downtown location in the Government Center/Faneuil Hall area. This area has a ton of walking traffic everyday at all hours and has every class of people. If...