Case Study Cal State East Bay
California State University East Bay is looking for suggestions on which food- related business would be best suited for their new large building, which is currently under construction. Therefore the aim of this paper Is to recommend 2 – 3 different food services business on the basis off market analysis. There are currently about 14,500 students enrolled. They campus already offers several food & beverage vendors. To be successful vendors have to use market segmentation.
Market segmentation means dividing a market into subsets to clarify the different needs and oratories of the customers.
After that they have to define their target markets and then decide how they will differentiate and position themselves in these markets. There are different methods for segmenting a market. The most common methods are the geographic, demographic, behavioral and lifestyle segmentation. Geographic segmentation has criteria like countries, nation, state, regions, cities or language.
This is a very important kind of segmentation, because some products only sell in special geographic areas. For example trying to sell a heater In the desert would make no sense.
Demographic segmentation means dividing the market into groups according to their age, gender, Income or religion. Behavioral segmentation divides the market Into groups of cartel Like consumption, usage or spending. The Lifestyle segmentation Is also known as chirography’s.
It refers to the criteria of Interests, activities and options of the customers. At the Hammed campus are currently a Pizza Hut, Taco Bell, Panda Express, Subway, Cataracts, Jamb Juice, Einstein and sometimes other various private providers.
To complete the list it is worth to mention that there are also dining commons and a P. O. D.
Market, which are not considered in this case study, because the university runs them. The target segment of the providers is obviously younger people, having not such a high budget and being students of CUBEBS. Jamb Juice and Cataracts decided to serve their customers need with mostly beverages. In case of Jamb Juice they offer fresh made drinks and Cataracts offers nearly all kind of coffee variations beside some little snacks. All other providers mainly offer food and Incidental beverages.
Pizza Hut focused on offering different sorts of pizza and pasta with some sides Like bread sticks.
Taco Bell offers their customer a wide range of tacos and burritos. Subway focused on sandwiches, which can be completely customized by their customers. Panda express serves their customers with different kind of Asian food. Einstein tries more to serve their customers during the breakfast time with offering bagels and sandwiches. This gets clearer by having a look to the opening times. Einstein is the only provider on the campus, which already opens at 7 AM.
Except Pizza Hut and Cataracts, which opens at 7:30 AM, all other providers open at 8 AM. This shows, that Cataracts also tries to revere their customers with their coffee products in the morning. Differently to Pizza Hut, which opens at 11 AM. They do not want to serve the morning section of their customers; they definitely focused on lunchtime. The following SOOT-Analysis will give a better overview of the current food & beverage situation on the CUBEBS campus. It Is a good way to evaluate the strengths, weaknesses, opportunities and treats.
I née TLS strength AT ten current T & Diverge solution Is Tanat tender Is a wee range of products. It starts in the morning with Einstein and Cataracts, who offer ageless, sandwiches and all kind of coffee variation and goes over to the other food providers. They offer a wide nearly every kind of products, except burgers. Another strength is that there are many available seats and desk to sit down for the customers. This gives them a relaxed and enjoyable feeling and also gives the opportunity to get in touch with friends who might also get them some of their products to Join the conversation.
Having a look onto the weaknesses, there is not much space of any expansion of the stores, except Einstein and Jamb Juice, which are not located near all the other stores.
This could become a problem in the long- view. Another weakness is that they there are almost only CUBEBS students and no people from outside the university. This makes them very addicted to the university. An opportunity is that studying becomes more attractive, which results in a higher amount of students and so directly in more potential customers.
Another opportunity is, that all providers are located at some points of interest, where many students walk by. This results in often picking up some products after seeing the store again.
Probably many buying decision would not be made when students did not walk near the stores. The greater importance of health awareness represents a threat. By an increase of the health awareness customers get more used to healthy food and tend to bring their own food from home instead of consuming fast food on the campus. The last threat is Just represented by other competitors around the campus.
More suppliers would probably force the other providers on campus to lower their prices referring to the basics of economics.
Therefore a greater range of food products around the campus would probably cost the providers on campus customers. The following growth-share matrix shows the different market references by the food & beverage providers on campus. Stars are companies with high market shares and high growth performance. Cataracts and Subway are located in this field, because they are the biggest supplier in the sandwich and coffee market with remaining high growth rates.
Cash cows ($) are companies with high market shares but low growth performance. Panda Express can be considered as a cash cow, because they serve a big share of the fast food Asian market, but are not growing that fast.
Dogs are those companies, which have a low market share and a low growth performance. Taco Bell and Einstein did not make it to the top in their market and also have no real growth performance. Question marks (? ) are defined as companies, which have a high growth performance, but a currently low market share.
Jamb Juice growth very fast, but has not yet taken over much of the market shares. Market observation of the current food options on campus made clear that customers make use of them especially during the rush hour from 12 AM to 1 PM.
That results in long waiting lines. Subway and Panda Express suffer most, because they need much time to serve their customers. A reason for this is, that they can’t complete their products before they get the order due to the customized way they serve. On the other hand Einstein nearly has no customers during the lunchtime.
It is striking that Cataracts has nearly almost the most costumers AT all suppliers Independently to ten time AT cay. I Nat results dissatisfaction of some customers and losing potential customers, because they do not want to wait that long for their product.
To have a good look into the future it is necessary to identify growth opportunities trough market penetration, market placement, product development, and/or diversification. Market penetration and market development concentrate on existing products.
The difference is that market penetration means increasing the sales in the current market and market development means increasing sales trough operating in different markets with the already existing products. Product development and diversification both concentrate on new products, but product development means offering new products in an existing market and diversification is classified by offering new products in a new market. Including the results of the SWAT analysis and the growth-share matrix the university should definitely focus on a market penetration and product development.
Market penetration could go with the demand for coffee products.
The long lines and the high market share and growth performance of Cataracts show the huge demand for coffee products. Product development could go with the implementation of a burger supplier. There is no supply of burgers on the campus, but at least talking to many international students, made the demand for burgers clear. On top of that many burger suppliers make profit with their to go products.
Therefore the SOOT analysis stated out that the location of the current food providers would play into the hands of burger suppliers, because many students could take them Just by walking by. New vendors for the new food services could be Pet’s Tea & Coffee and McDonald’s including a Mecca©.
Both companies focus on breakfast and lunch. Therefore they would be an enrichment all over the day. Pet’s and Mecca© could profit from the long wait lines of Cataracts, because they serve the same demand. McDonald’s could also profit from the fact that there are no other burger suppliers ND they offer a wide product range for a low budget.
Pet’s and McDonald’s also fit perfectly into the for to go segment.
On top of that McDonald’s has the possibility to avoid long lines and losing customers by producing some of their good selling products in advance. Nevertheless a Mecca© would also serve the kind of customers, who want to have cakes during their classes. All in all the implementation of these proposals would probably result in fulfilling more of the current demands to coffee products and by diving into the burger niche on the CUBEBS campus, offering some whole new products.