This document summarizes the results of a survey about customer preferences for coffee attributes. It finds that price and brand are the most important factors, with medium ($3) and high ($5) prices and non-Starbucks brands showing lower utility. Flavor and wait time were not significant. New scenarios were modeled, finding a $1 McDonald's coffee with 2 minute wait to have the highest expected market share at 22.36%. Customers are willing to pay $0.58 for a 2 minute reduction in wait time. The study could be improved with additional attributes and a larger sample size.

1. Coffee Yana Cherepashenskaya
Christina Huang
Lianna Lam
Elizabeth Merklinger
Group K

2. ● Price
○ $1
○ $3
○ $5
● Brand
○ Starbucks
○ Dunkin Donuts
○ McDonalds
Coffee Attributes
● Flavor
○ Hazelnut
○ Caramel
○ Regular
● Wait Time
○ 2 minutes
○ 4 minutes

3. Fractional Factorial Design

4. ● Google Forms
● 41 Respondents
● 9 Questions
Our Survey

5. Sample Results Codified

6. Regression Output

7. /R2
Sig F/P-value Sig level Result
R2
0.2553 3.738E-20 0.05 Significant
Price (Medium ($3)) -1.422764228 5.281E-05 0.05 Significant
Price (High ($5)) -2.829268293 6.614E-15 0.05 Significant
Brand (Dunkin Donuts) -0.87804878 0.012 0.05 Significant
Brand (McDonalds) -2.544715447 1.639E-12 0.05 Significant
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Regression Output-Explained

8. P-value Sig level Result
Flavor (Caramel) -0.105691057 0.761 0.05 Not significant
Flavor (Regular) -0.195121951 0.575 0.05 Not significant
Wait time (Long (4
minutes))
-0.410569106 0.174 0.05 Not significant
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Regression Output - Explained

9. ● Randomly generated three scenarios not originally given by
the fractional factorial design
1) $3, from Dunkin Donuts, Caramel flavor, 4 minute wait time
2) $5, from Starbucks, Hazelnut flavor, 4 minute wait time
3) $1, from McDonalds, Hazelnut flavor, 2 minute wait time
● Coded new scenario using dummy variables
● Calculated expected utility based on Utility equation
Expected Utility

10. Scenario Scenario # Description Expected Utilities
New 1 $3, from Dunkin Donuts, Caramel
flavor, 4 minute wait time
5.16
New 2 $5, from Starbucks, Hazelnut flavor,
4 minute wait time
4.715
New 3 $1, from McDonalds, Hazelnut
flavor, 2 minute wait time
5.41
Expected Utility Results

11. Scenario Scenario # Description Expected Utilities
Survey 4 $5, from Dunkin Donuts, Regular
flavor, 2 minute wait time
4.053
Survey 5 $3, from Starbucks, Regular flavor, 4
minute wait time
5.949
Survey 6 $3, from McDonalds, Caramel flavor,
2 minute wait time
3.904
Expected Utility Results

12. Scenario Scenario # Description Expected Utilities
New 1 $3, DD, Caramel, 4 min 5.16
New 2 $5, Starbucks, Hazelnut, 4 min 4.715
New 3 $1, McDonalds, Hazelnut, 2 min 5.41
Survey 4 $5, DD, Regular, 2 min 4.053
Survey 5 $3,Starbucks, Regular, 4 min 5.949
Survey 6 $3, McDonalds, Caramel, 2 min 3.904
Expected Utility Comparison

13. ● Expected market shares for 6 scenarios can be
calculated using market share equation and
expected utility values
Expected Market Share

14. Scenario Scenario # Description Expected Market
Share
New 1 $3, from Dunkin Donuts, Caramel
flavor, 4 minute wait time
17.42%
New 2 $5, from Starbucks, Hazelnut flavor,
4 minute wait time
11.16%
New 3 $1, from McDonalds, Hazelnut
flavor, 2 minute wait time
22.36%
Expected Market Share Results

15. Scenario Scenario # Description Expected Market
Share
Survey 4 $5, from Dunkin Donuts, Regular
flavor, 2 minute wait time
5.76%
Survey 5 $3, from Starbucks, Regular flavor, 4
minute wait time
38.34%
Survey 6 $3, from McDonalds, Caramel flavor,
2 minute wait time
4.96%
Expected Market Share Results

16. Scenario Scenario # Description Expected Market
Share
New 1 $3, DD, Caramel, 4 min 17.42%
New 2 $5, Starbucks, Hazelnut, 4 min 11.16%
New 3 $1, McDonalds, Hazelnut, 2 min 22.36%
Survey 4 $5, DD, Regular, 2 min 5.76%
Survey 5 $3,Starbucks, Regular, 4 min 38.34%
Survey 6 $3, McDonalds, Caramel, 2 min 4.96%
Expected Market Share Results

17. ● How much are customers willing to pay for lower wait
time?
● 4 minutes wait time → 2 minutes wait time?
● Customers are willing to pay $0.58 for lower wait time
Willingness to Pay
P=$0.58

18. ● Increasing brand recognition while while keeping a low price is
very important to garner coffee purchases
○ Price & brand are relatively the most important attributes to
purchasing coffee (RI > 40%)
○ Wait time and flavor are less important (RI <10%)
● We should improve on our study with other attributes and bigger
sample size
○ R2
is significant, but it is only a 0.255
○ Our model accounts only for a small amount of variation in
Coffee Purchase Utility
Conclusion

19. Questions?