Business Research Management

Project

Word of Mouth advertising influence

on the Coffee Industry

MBA IB PT 2019-22

Submitted to
Prof. Sanjay Rastogi

Submitted By
Ashley Gagneja (13A)
Madhav Gupta (26A)
Shikher Srivastava (34A)
Shobit Singhal (37A)

Introduction
 Coffee industry is one of the oldest industries in the world originating from the early 15th century
from ethiopia. The market of the coffee industry has changed from a coffee provider to a
mainstream culture of providing conversations over a cup of coffee, from just single origin or custom
roasts to experiments such as storing beans in bourbon casks, fermentation, modular machines
operated by baristas allowing the customer to see how the whole process takes place or nitro
americanos in cans to beer and cold brews in cocktails with gourmet flavours like star anise and
pomegranate.Producers and Roasters are experimenting with new ways of making coffee which will
change the way we look the coffee industry.

Problem Statement

To determine whether what is the effect of Word of Mouth communication for coffee industry

Assumptions
1. Perception of brand is influenced by word of mouth

Word of Mouth Advertising

An unpaid form of promotion in which satisfied customers tell other people how much they like a
business, product or service. Word-of-mouth advertising is important for every business, as each
happy customer can steer dozens of new ones your way. Word of mouth advertising has shown a
lot of impact among people of changing their perspective whether it be a product or industry.

Word-of-mouth is a natural phenomenon that occurs and is as old as human communication and
trade. Furthermore, there is a strong link between word-of-mouth and storytelling, one of the many
topics in content marketing.
Going by the facts, 92% of the people would believe recommendations of family or friends or even
acquaintances over any type of advertising.

Going by the studies of Gremler, we hypothesize and empirically test the proposition that
interpersonal bonds or relationships between employees and customers can significantly influence
positive word of mouth communication. Such influence may be especially true for many services,
particularly in situations where a relationship has developed between the customer and individual
service providers. The study talks about the four dimensions of interpersonal bonds i.e. trust, care,
rapport and familiarity. As the customer’s trust on a particular product or brand increases, he tends
to communicate positive feedback in his group circles. This study by large is applicable to our
research project i.e. coffee industry.

According to study by Lloyd, the idea is to investigate the service interaction behaviors that elicit a
sense of customer in the service encounter and to investigate the mediating role of comfort on
assessments of quality, customer satisfaction and positive word of mouth in two industries. In
simplicity, interviews are conducted were used to create an initial list of interactions behaviors
displayed by service employees in an encounter. A qualitative study was then used to collect data to
empirically examine the relationship between the constructs of interest. The outcome was that the
two key groups of interaction are identified and contain specific behaviors that create a sense of
overall quality and customer satisfaction and this leads to positive word of mouth. However, the only
limitations to this study is that it only targeted two specific industries and not others. So it is
applicable to a limited extent applicable to our research project.
 Coming to the last study of Huang, the idea behind his study was to explore the factors that can
help to generate a bigger ripple for diffusive word of mouth in an online environment. Specifically,
the paper aims to demonstrate how the characteristics of WOM influence the ripple effect. The
study was analyzed through online forums from which the data is collected and a method called
Structural Equation Modelling (SEM) was utilized for analysis. The outcome was that all the WOM
characteristics, which were investigated were based on quality, authority, authenticity and
interestingness have a positive effect on the resender’s acceptance which in turn has a significant
positive effect on resender resending intention. This could be very much applicable to our research
project.

Reasons for selecting organised coffee

sector as our research project

Traditionally, the coffee consumption in India has been largely concentrated in the southern region,
which also contributes ~90% of the total domestic production. The availability of fresh coffee, at an
affordable price, is the major driver for the high levels of domestic consumption in southern India.
However, in the past two decades, there has been a spread in coffee consumption to other parts of
India, even if largely in urban centers. This penetration of coffee consumption is not restricted to the
beverage alone but also in other forms like desserts and ice-creams.

The increase in disposable incomes, the higher number of double income households, more global
exposure, the increasing media penetration and attention to food, the rapid urbanization and
changing lifestyle preferences, influenced by the western world, along with a greater number of
modern retail outlets stocking a larger variety and more variants of coffee, and new product
developments by national and international players have boosted the consumption of coffee in other
parts of India.

India is the world’s sixth largest producer of coffee, with a production of 304 thousand metric tons
(MT) in 2013, of which 125 thousand MT is the domestic consumption1 with the per capita
consumption being ~90 gm per year. The major channels for domestic trade are modern, traditional
retail, and national and international café chains. The retail coffee trade is largely dominated by
branded players, with Nestlé and Hindustan Unilever being the category’s leaders accounting for
approximately 60-70% of the retail market (by value) in 2012. Other brands include Tata Coffee and
regional players like Narasus, Cothas, and Leo’s which compete strongly in the respective
markets.These points lead to selection of the Organised Coffee Sector as our Research Project.

The organised coffee trade can be broadly categorised into the domestic market and export share.
The domestic market can further be divided into retail market and branded food services as depicted
in the below flow chart.
The past two decades have introduced urban consumers to bean-to-cup coffee thanks to the surge in
café formats, as well as the increasing proliferation of coffee vending machines in such institutions as
offices and commercial organizations, who now prefer unmanned machines to service the needs of
their employees in terms of stimulating beverages like tea and coffee. Brands like Fresh & Honest
and Café Coffee Day are the leaders in this category. Illy, Lavazza, and Café Coffee Day are the
prominent players in the branded space for packaged coffee beans. However, the domestic use of
coffee beans is limited as they require the use of such brewing equipment as coffee
grinders/percolators which still have a low penetration in homes.

SWOT Analysis
 Strengths in the SWOT Analysis of Organised Cafe Industry

● Firstly, the products in the organised cafe industry are of high quality. The cafe shop usually
maintains a good standard which attracts the customer to experience a better ambience
and hospitality.
● Going by the data which has been mentioned below, the target customer ages from 21-30
years. The youth is one the prime targets and has a better grip on these customers.
● These types of Cafes provide lounge or ideal sitting areas for which provides an
atmosphere of comfort for their customers.
● The location of these cafes are normally everywhere which gives easy access to the
people.Nowadays, they are even available at remote locations.

Weaknesses in the SWOT Analysis of Organized Cafe Industry

● After a certain period of time, the industry is seeing a steady decline in the market share as
there is a lack of innovation.The customers are unable to find anything new to the existing
market.
● Some of the cafes in the industry are much older and and even some of them are present
in remote locations which makes it a little to make drastic changes in the interiors and
hence makes it monotonous. Because of increasing competition, the industry is facing a
severe reduction in profits.

Opportunities In the SWOT Analysis of Organised Cafe Industry

● Many of the brands are thinking of franchising their current models which will provide
them with better possibilities to be present in areas where it is not feasible for the
company to manage.
● Expansion is one of the opportunities which may give them a better position to increase
their profits.
● Increasing awareness among the existing customers might actually help them to give a
better chance to increase their client base.

Threats in the SWOT Analysis of Organised Cafe Industry

● The increasing competition has made it difficult for the firms in the industry to survive.
● Price fluctuations in the market has lead to problems to show a steady growth.

Chapter2: Literature Review and Research Problems

 Literature Review

Through this term project that we have been assigned we will get to learn more about the ―Word
of Mouth of Coffee Chains or Café shops. In this particular section our task was to review and
analyze different research papers written by researchers in the past regarding the topic ―Word of
Mouth‖. We found so many factors/ variables that influence word of mouth among people. In order
to get a better understanding of the variables and our research topic we reviewed the definitions of
some of the variables and reviewed the definition of word of mouth. We borrowed some of the
variables we found relevant to our topic from these research papers. Finally, we have proposed
our own conceptual model of ―Word of Mouth of Coffee Chains‖.

First Literature Study:

Generating positive word-of-mouth communication through customer- employee
relationships
Gremler, Dwayne D and Gwinner, Kevin P and Brown,Stephen W. (2001).

Summary
This research was conducted to test how the relationships between customers and employees can
influence positive word of mouth. This was done by using data collected from bank’s customers
and dental patients. In this study they looked at: trust, care, personal connection and familiarity.
Moreover, they found that as a customer's trust increases, positive WOM communication is also
more likely to increase. And that trust is a consequence of three other dimensions: a personal
connection between employees and customers, care displayed by employees, and employee
familiarity with customers.
Variables Studied in this Paper

There are 4 variables studied in this paper;

1. Familiarity – They define familiarity as the customer’s perception that the employee has
personal recognition of the customer and knows specific details about his/her needs. Familiarity
is driven by the frequency of the interaction and the depth of the interaction.
2. Care – They define care as the customer’s perception of the employee having genuine concern
for the customer’s well-being.
3. Personal connection – They define personal connection as a strong sense of affiliation or bond
based on some tie. Connections are often based upon having some common attribute or
interests with another party.
4. Trust – They define trust as existing when one party has confidence in an exchange partner’s
reliability and integrity.

Conceptual model of this paper

We have borrowed the variable “Trust” from the above model in this research paper.
Second Literature Study:

Interaction Behaviors Leading to Comfort in the Service Encounter 2

Lloyd, Alison E. and Luke, Sherriff T.K. (2011)

Summary
The main objectives of this research paper are to investigate the service interaction behaviors that
create customer‘s sense of comfort or customer‘s emotional response after interaction with the
service providers in the service encounter, and then to investigate a comfort as the assessment of
service quality, customer satisfaction and positive word of mouth in fashion apparel retailing and
casual dining restaurants. They found two key groups of interaction behavior (service manner and
need identification) which create customer’s sense of comfort, and this comfort positively impacts
both service quality & customer satisfaction, and these leads to positive word of mouth.

Variables Studied in this Paper

There are four variables in this paper that affect word of mouth.
1. Interaction Behaviors
There are two groups of interaction behaviors and they are as follows:
1.1.Service Manner (such as facial expressions, bodily gestures, tone of voice and language)
● The service employee showed patience
● The service employee was helpful
● The service employee smiled at me
● The service employee was polite
● The service employee was relaxing to interact with
● The service employee showed passion for their job
● The service employee was cheerful
1.2.Need Identification (such as understanding and concern for customers)
● The service employee asks for preferences
● The service employee understands individual need
2. Comfort
The research paper defined the variable comfort as follows:
● A feeling of anxiety or relaxation arising from the social interaction with the service employee
Butcher et al. (2001).
● Paswan and Ganesh (2005) simply regard it as the level of comfort during interpersonal social
interaction.

3. Overall Service Quality (such as reliability, responsiveness, assurance and empathy)

● Service quality is defined as ―the consumer‘s judgment of product‘s [service‘s]
overall excellence or superiority (Zeithaml, 1988).
● Service Quality is divided into two stages service outcome & service process
- Reliability & assurance are mainly concerned with service outcome
- Assurance and empathy are concerned with service process
4. Customer Satisfaction
● The interaction between the sales person and the customer is an important
determinant of the customer’s satisfaction with the service.
● Concern, civility & congeniality are three dimensions that are highly co-related with
customer satisfaction. (Winsted, 2000)
- Concern includes respect for the customer, being genuine, making small talk
- Civility means minimal accepted levels of behaviors or types of behaviors that
service providers should avoid in order to provide an adequate level of service.
- Congeniality involves displaying a positive attitude and having a warm temperament
& personality.
Conceptual Model of this Paper

From the above conceptual model, we borrow two variables which are ―Overall Service
Quality” and “Interaction Behaviors” to use in our conceptual model.

Third Literature Study:

Making Your Online Voice Loud: The Critical Role of WOM Information 3
Huang, Minxue and Cai, Fengyan and Tsang, Alex S.L. and Zhou, Nan. (2011).

Summary
The paper studies word of mouth and its ripple effect, which means how word of mouth spreads and
diffuses in the market. The paper studied four dimensions/variables that affect word of mouth and its
acceptance; these variables are quality, authority, authenticity and interestingness. The paper
studies word of mouth in the online environment and how to control it, the researchers consider this
study to be important because word of mouth is difficult to control in an offline environment. They
conducted this research in China. The purpose of this research was to help marketers to choose
better online forums to create a more effective ripple effect.
Variables Studied in this Paper
This research paper studied four variables that help create a ripple effect. They also studied how
each variable can influence the acceptance of the word of mouth. The variables are as follows:
1. Quality:
In Rieh‘s (2002) study, information quality was operationally defined as the extent to which users
thought that the information was useful, good, current, and accurate. According to the Elaboration
Likelihood Model proposed by Petty, Cacioppo and Schumann (1983), the quality of an argument
is an important factor in determining the persuasive impact of a message. They also found that
argument quality influences a consumer’s attitude towards a product. Specifically, consumers are
likely to have a more favorable attitude towards a product when the product-related information
has a high quality (strong) argument rather than a low (weak) one.
2. Authority:
The research paper states that, cognitive authority can affect how people search and use
information. Authority makes consumers trust the information more, and that a sender’s expertise
is one of the most important factors that influence a receiver‘s acceptance (Bansal and Voyer,
2000).Rieh (2002) defined it as the extent to which users thought that the information was
credible, trustworthy, reliable, official, authoritative and amateurish. As suggested by Mitra and
Watts (2002), the online voice represented three aspects of communication: ―Who is saying‖,
―What is being said‖ and ―How is it said‖. Consequently, several standards could be used to
evaluate an online voice. Among these standards, the standard of authority was used to evaluate
the speaker ―Who is saying‖.
3. Authenticity:
The standard of authenticity was used to evaluate what is being said and how. Mitra and Watts
(2002) argued that authenticity was one of the most important factors that influence whether a reader
believed online information. Credibility, Trustworthiness and reliability refer to authenticity in the sense
that the information is true and credible.

primary importance to attract people’s attention. Furthermore, relevant advertising studies (e.g.
Olney, Holbrook and Batra, 1991) have proven that the perceived interestingness of an
 advertisement directly affects its audience’s viewing time. Derbaix and Vanhamme (2003) found that
eliciting surprise helps induce WOM activity. When one considers―acceptance towards WOM
information‖ as a partial mediator, only the relationship between ―interestingness‖ and ―resending
intention‖ is significant.

Conceptual Model of this Paper

From the above conceptual model, we will borrow one variable which is ―Authenticity”.
Conceptualization of Word-of-Mouth

The first literature which is about ―Generating positive word-of-mouth communication through
customer-employee relationships‖ defines Word-of-Mouth (WOM) as an informal communication
directed at other consumers about the ownership, usage, or characteristics of particular goods and
services and/or their sellers.

In the second literature whose topic is ―Interaction Behaviors Leading to Comfort in the Service
Encounter‖ Word-of-Mouth requires consumers to engage in attribution analysis, recall and
interpret events, communicate and share meaningful information with others. Word-of-mouth can be
positive, neutral or negative. Instances of positive word-of-mouth include relating pleasant, vivid or
novel experiences and recommendations to others.

From our last literature, ―Making Your Online Voice Loud: The Critical Role of WOM Information‖
the definition of Word-of-Mouth is informal advice between people about goods, services, and
social issues.
Research Problem

Research Question

What are the factors affecting the word of mouth towards Coffee Chains?

Research Objectives

● To study the attitude towards word of mouth of Café shops.

● To study the effects of interaction behaviors, store perception, trust and authenticity to Café
shops.

● To study the important factors that affect people’s decision to spread positive word of mouth
about café shops.

● To measure the level of word of mouth of café shops.

● To study the differences in word of mouth of café shops among various demographic factors
such as gender, age, monthly allowance/ salary , etc.

Hypothesis

● Hypothesis 1: There is a difference in word of mouth of Coffee Chains between gender

● Hypothesis 2: There is a difference in word of mouth of Coffee Chains among the 4 monthly
allowance/ salary groups

● Hypothesis 3: There is a relationship between number of visits to Coffee Chains per month and
monthly allowance

● Hypothesis 4: There is a relationship between getting updated information about Coffee shops
and gender

● Hypothesis 5: The level of word of mouth of Coffee Chains is high

 Additional Hypothesis

● Hypothesis 6: There is a difference in word of mouth of Café shops between like and
dislike discussing the places you eat and drink at with people

● Hypothesis 7: There is a relationship between average spending in Café shops per visit
and gender

● Hypothesis 8: There is a relationship between beverage bought at Café shops and gender
Conceptual Model of Word of Mouth of Coffee Chains Coffee

The word of mouth of Coffee Chains is depending on 4 variables which are Interaction behaviors,
overall service quality, trust and authenticity. The dimensions in each factor are specified in detail
as follows:

Interaction Behaviors
● Politeness of staff
● Sincerity of the staff
● Decency of expressions and gestures used by staff
● Ability of staff members to identify individual needs

Store Perception
● Found in premium locations
● Classy store decor
● Good in-store atmosphere
● Provides good facilities

Trust
● Consumer confidence in the products
● Assurance of product quality
● High expectations from the beverages served
● Consumer’s perception of it as a responsible organization

Authenticity
● Original in terms of products and services
● Offering new flavors to consumers
● Reliability of the brand
● Customization of beverage to individual taste
- &
 Chapter3: Research Methodology
1. Research Design
Three types of research design can be implemented namely exploratory research, descriptive
research and causal research. However, we have conducted only exploratory research and
descriptive research for our project.

1.1 Exploratory Research

When a problem has not been clearly defined, we can use exploratory research to explore and
analyze the situation. This will help us to discover research problems. Exploratory research does not
give us an answer, but it helps us to understand the situation better. Exploratory research helps
determine the data collection method and often relies on secondary research (such as our literature
review). The objective of exploratory research is to gather preliminary information that will help
define problems and suggest hypothesis. Exploratory research on its own is not sufficient but it is
essential for conducting descriptive or causal research. 4

We have utilized secondary data analysis (conducted a literature review using past research papers)
to identify the factors that affect the word of mouth of Coffee Chains.

1.2 Descriptive Research

This research is used to describe answers to research problems in detail. The answers are usually in
the form of specific numbers and percentages. Even though this research can answer certain
question, it cannot explain what caused a situation. Descriptive research helps to determine the
independent and dependent variables and it helps to explain the relationship between them.
Descriptive research is also often known as Statistical research. We used questionnaire survey as a
method for collecting data about the population being studied. It helps in obtaining information that
will be used to provide solutions to the research problems.
 1. Data Collection

One of the most important steps in research methodology is data collection because it is essential to
gather and explain this data to interpret the research questions. There are several ways of collecting
data. However, we used questionnaire survey to gather information about word of mouth of Coffee
Chains from the sample of the total population who drink beverages of Coffee Chains. We selected
the survey method because it is an efficient, fast, accurate and inexpensive way of collecting data.

After the questionnaires were designed, we sent in our draft to our professor. After certain changes
the final draft was created and approved. After all the recommended and required changes were
made the questionnaires were ready for data collection.

SAMPLE SIZE DETERMINATION

Z= confidence level in standard error units

p̂ = Market share of Retail organised sector in the coffee industry (15%, as per secondary research)
e= Maximum allowance error (4%)

Sample size = 307 Approx

 2. Sampling Plan

We emailed 300 sets of questionnaires .The questionnaire was about the word of mouth of Café
shops. We determined our sampling plan as follows:

• Target population: Who are the people we collected data from?

We selected respondents by asking them whether they had tried beverages at Café shops before
they started filling the survey. In the email we mentioned that people who visit the café shops need
to fill the survey.

• Sample size: How many respondents answered the questionnaires?

300 respondents

• Sampling method: What was the method used to select respondents?

We used the non-probability sampling method; this is a non-randomization method. We selected
respondents based on convenience sampling, whereby we chose respondents in the office who
were available to answer the questionnaire and those who have been to café shops.
 3. Scale and Measurement

Questi Lev Type of Question

on el of
scale
Part 1: General Information
1 Ordinal Ranking question
2 Nominal Determinant-choice
3 Nominal Determinant-choice
4 Nominal Frequency-determination
5 Nominal Frequency-determination
6 Nominal Determinant-choice
Part 2: Measuring Variables
7 Interval Attitude rating scale: Likert scale
8 Interval Attitude rating scale: Likert scale
9 Interval Attitude rating scale: Likert scale
10 Interval Attitude rating scale: Likert scale
11 Interval Attitude rating scale: Likert scale
Part 3: Personal Data
12 Nominal Simple dichotomy
13 Nominal Simple dichotomy
14 Nominal Determinant-choice
15 Nominal Determinant-choice
16 Nominal Determinant-choice
17 Nominal Determinant-choice
18 Nominal Simple dichotomy
19 Nominal Simple dichotomy
20 Nominal Simple dichotomy

QUESTIONNAIRE
 1) BASED ON PRIORITIES, KINDLY RANK THE FOLLOWING BASED ON THE FACTORS
WHICH AFFECT YOUR DECISION WHEN BUYING COFFEE. (1-6, 1 AS MOST
IMPORTANT)

____ QUALITY OF COFFEE

____ LOCATION OF THE SHOP

____ BRAND VALUE

____ TASTE OF THE COFFEE

____ FRESHNESS

____ PRICE FACTOR

Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank Rank Result

140 56 1 Most important
**
Brand 48 4
Freshness 17 5
36 3 3rd most important
Location 18 110 6
Quality 41 2 2nd most important

* Ranking calculation = 1x140 + 2x57 + 3x41 + 4x38 + 5x18 + 6x6 = 655

**Choosing minimum total = Most important
Conclusion:
The most important factor that affects the decision to buy coffee is “taste”. The second and third are
quality and price respectively.

2) WHICH BRAND OR COMPANY COMES TO YOUR MIND WHEN YOU THINK ABOUT THE
WORD BREWED COFFEE? ( BASED ON THE MULTIPLE OPTIONS, PLEASE SELECT
ONE)

□ CAFÉ COFFEE DAY

□ BARISTA
□ STARBUCKS
□ BLUE TOKAI
□ COFFEE BEAN AND TEA LEAVES
□ MCDONALDS COFFEE
 Descriptive Frequency Percent
Brand that Comes First to
Mind
Starbucks 191 63.67
Blue Tokai 25 8.33
Barista 33 11.00
Café Coffee Day 36 12.00
Coffee Bean and Tea 5 1.67
Leaves
McDonalds Coffee 10 3.33
Conclusion:
The brand that first comes to respondents’ mind when talking about coffee is
Starbucks, which is with 63.67% of the respondents.

3) AT CAFÉ SHOPS, WHAT TYPE OR KIND OF BEVERAGE DO YOU PREFER

DRINKING? ( PLEASE SELECT ONE)

□ COFEE
□ TEA
□ CREAM BLENDS
□ ICED/HOT CHOCOLATE
□ MOCHA
□ JUICE

Descriptive Frequency Percent

Beverage Usually
Consumed
Coffee 145 48.33
Tea 34 11.33
Juice 15 5.00
Hot/Iced Chocolate 67 22.33
Mocha 21 7.00
Cream Blends 18 6.00

Conclusion:

Almost half People usually drink coffee at the coffee shops, rest Hot/Iced Chocolate is
the most ordered drink after Coffee.
 4) HOW OFTEN DO YOU GO TO CAFÉ SHOPS IN A MONTH? ( PLEASE
SELECT ONE )

□ 0 TIMES
□ 1-3 TIMES
□ 4-10 TIMES
□ MORE THAN 10 TIMES

Descriptive Frequen Percent

cy
Number of Visits per Month
Less than once 1 40
2 .0
0 0
1-3 times 1 40
2 .0
0 0
4-10 times 4 13
1 .6
7
More than 10 times 1 6.
9 33

Conclusion:
Most respondents usually go to Coffee shops less than once a month, which is 40% and 1-3
times a month, which is also 40%.

5) PER VISIT TO CAFÉ SHOPS, ON AN AVERAGE HOW MUCH DO YOU SPEND?

(PLEASE SELECT ONE)

□ 0 – 100 INR
□ 101 – 250 INR
□ 251 – 500 INR
□ MORE THAN 500 INR

Descriptive Frequen Percent

cy
Average
Spending
 0 to 100 INR 2 7.
3 67
101 to 250 1 56
INR 7 .6
0 7
251 to 500 INR 8 28
4 .0
0
More than 500 INR 2 7.
3 67

Conclusion:
Most respondents spend 101 to 250 INR per visit to a café shop, which is
around 56.67%.

6) THROUGH WHICH WAY DO YOU GET THE MOST UPDATES OF CAFÉ

SHOPS AND THEIR OFFERS/NEW LAUNCHES? (PLEASE SELECT ONE)

□ NEWSPAPER/ MAGAZINE
□ POSTERS/ BROCHURES
□ WEBSITE/ BLOGS
□ FAMILY/ FRIENDS
□ SOCIAL NETWORKING SITES/APPS
□ RADIO/TELEVISION

Descriptive Frequency Percent

Source of
Information
Newspaper/ Magazine 35 11.67
Radio/Television 9 3.00
Friends/Fam 96 32.00
ily
Social networks 89 29.67
Website/Blo 27 9.00
gs
Posters/Brochures 44 14.67

Conclusion:
Most respondents get updated information about Café shops’ offers,
promotions and new launches by friends or family, which is 32%.
IN THE FOLLOWING QUESTIONS, KINDLY GIVE THE RESPONSES BASED ON
APPROPRIATE MEASURE SCALE BASED ON 1 TO 5 WHEREIN 5 REPRESENTS
STRONGLY AGREE AND 1 REPRESENTS STRONGLY DISAGREE

7) CONSUMERS INTERACTION WITH STAFF

A) THE STAFF OF CAFÉ SHOPS IS POLITE

1 2 3 4 5

B) THE STAFF OF CAFÉ SHOPS DAY IS SINCERE

1 2 3 4 5

C) THE STAFF OF CAFÉ SHOPS DAY REPLY WITH PROPER EXPRESSIONS

AND GESTURES

1 2 3 4 5

D) THE STAFF OF CAFÉ SHOPS CAN IDENTIFY THE NEEDS

1 2 3 4 5

Interaction Behavior Me Ra
an nk
7.1 4. 1
Politeness 1
6
7.2 4. 2
Sincerity 0
6
7.3 Expression & Gestures 4. 3
0
4
7.4 Need 3. 4
Identification 9
9

Conclusion:
 ● The strength of Café Shops’ interaction behavior is “politeness”.
● The weakness of Café shops’ interaction behavior is “low need identification” than
customers‘ expectation.

8) STORE PERCEPTION

A) STORE IS FOUND IN GOOD PREMIUM LOCATION

1 2 3 4 5

B) STORE HAS HIGH QUALITY OUTLAY

1 2 3 4 5

C) STORE HAS WELCOMING ATMOSPHERE

1 2 3 4 5

D) STORE IS WELL EQUIPPED WITH FACILITIES

1 2 3 4 5

Store Perception Me Ra
an nk
8.1 Premium 4. 1
Locations 2
5
8.2 Store Decor 4. 3
1
3
8.3 In-store Atmosphere 4. 2
2
0
8.4 Facilities 4. 4
Provided 0
5

Conclusion:
● The strength of Café Shops’ perception is “premium locations”.
● The weakness of Café Shops’ interaction behavior is “low facilities provided” than
customers‘ expectation.
 9) RELIABILITY

A) I HAVE TRUST IN UTILISATION CAFÉ SHOP PRODUCTS

1 2 3 4 5

B) I M ASSURED OF CAFÉ SHOP QUALITY

1 2 3 4 5

C) I HAVE HIGH EXPECTATIONS OF CAFÉ SHOP QUALITY

1 2 3 4 5

D) ACCORDING TO ME, CAFÉ SHOP WORKS RESPONSIBLY

1 2 3 4 5

Trust Me Ra
an nk
9.1 Consumer Expectations 4. 1
2
3
9.2 Quality Assurance 4. 3
1
3
9.3 Consumer Confidence 4. 2
1
4
9.4 Responsibility 4. 4
0
1

Conclusion:
● The strength of Café Shops’ trust is “Consumer Expectations”.
● The weakness of Café Shops’ trust is “low Responsibility” than customers‘
expectation.

10)GENUINENESS
 A) CAFÉ SHOP OFFERS ORIGINAL PRODUCTS

1 2 3 4 5

B) OFTEN CAFÉ SHOP OFFERS NEW FLAVOURS

1 2 3 4 5

C) I FEEL CAFÉ SHOPS OFFER RELIABLE COFFEE

1 2 3 4 5

D) I HAVE AN OPTION TO CUSTOMISE MY COFFEE BASED ON MY TASTE

1 2 3 4 5

Authenticity Me Ra
an nk
10.1 Originality 4. 2
0
3
10.2 New Flavors 3.79 44
10.3 Brand Reliability 4. 11
2
4
10.4 Customization 3. 3
8
6

Conclusion:
● The strength of Café Shops’ authenticity is “brand reliability”.
● The weakness of Café Shops’ authenticity is “low new flavors”

11)PROMOTION THROUGH WORD OF MOUTH

A) I OFTEN PRAISE ABOUT CAFÉ SHOPS TO PEOPLE

1 2 3 4 5

B) I WOULD ENCOURAGE OTHERS TO VISIT AND TRY PRODUCTS OF

CAFÉ SHOPS
 1 2 3 4 5

C) I WOULD RECOMMEND PEOPLE TO VISIT AND TRY PRODUCTS OF

CAFÉ SHOPS

1 2 3 4 5

Word-of-Mouth Me Ra
an nk
11.1 Tell others good 3.99 11
things
11.2 Encourage 3.84 33
others
11.3 Recommend others 3.93 2

Conclusion:
● The strength of Café Shops’ word-of-mouth is “keep telling other good things” by
customers.
● The weakness of Café Shops’ word-of-mouth is “low chance to
encourage others” to know and try Cafés than company‘s expectation.

FOLLOWING QUESTIONS ARE ABOUT THE PERSON

12) PLEASE SPECIFY YOUR GENDER

□ MALE
□ FEMALE

□ Descriptive Frequency Percent

Gender
Male 1 48.
4 00
4
Female 1 52.
5 00
6

Conclusion:
Most respondents are Females, 52%.

13)PLEASE SPECIFY YOUR STATEHOOD

 □ DELHITE
□ NOT DELHITE

Descriptive Frequen Perce

cy nt
Nationality
Delhite 249 83.00
Non-Delhite 51 17.00

Conclusion:
Most respondents are Delhites, i.e. 83%.

14)PLEASE SPECIFY YOUR AGE

□ LESS THAN 20
□ 21-30
□ 31-40
□ MORE THAN 41

Descriptive Frequency Percent

Academic Year
Less than 20 6 21.
3 00
21-30 7 24.
4 67
31-40 6 22.
8 67
41 plus 9 31.
5 67

Conclusion:
Most respondents are 41 above in age, 31.67%.

15)PLEASE SPECIFY YOUR MONTHLY SALARY OR ALLOWANCE

□ LESS THAN 25000 INR

□ 25001-50000 INR
□ 50001-75000 INR
□ MORE THAN 75000 INR
 Descriptive Frequency Percent
Monthly Allowance
Less than 25,000 8 29.
7 00
20,001 - 1 44.
50,000 3 67
4
50,001 - 6 20.
100,000 1 33
More than 100,000 1 6.
8 0
0

Conclusion:
Most respondents have a monthly salary of 20,001 – 50,000 INR, 44.67%.

16)WHAT KIND OF BEVERAGE DO YOU PREFER TO DRINK AT CAFÉ SHOPS?

□ COFFEE
□ TEA
□ JUICE
□ CARBONATED DRINKS

Descriptive Frequen Perce

cy nt
Beverage Preferred
Coffee 131 43.67
Tea 67 22.33
Juice 63 21.00
Carbonated drinks 39 13.00

Conclusion:
Most respondents prefer coffee, 43.67%.

17)WHERE DO YOU SPEND YOUR FREE TIME?

□ DEPARTMENTAL STORE
□ BEAUTY SALON
□ HOME
□ SPORTS FIELD
 Descriptive Frequen Perce
cy nt
Where They Spend Their Free Time
Department 127 42.33
Store
Beauty Salon 12 4.00
Home 108 36.00
Sports field 53 17.67

Conclusion:
Most respondents spend most of their free time at department store, 42.33%.

17. DO YOU LIKE NON INDIAN COFFEE BRANDS?

□ YES
□ NO

Descriptive Frequen Perce

cy nt
Liking for Non Indian Brands
Yes 238 79.33
No 62 20.67
Conclusion:
Most respondents like Non Indian brands, 79.33%.

18. DO YOU LIKE TO DISCUSS THE PLACES TO EAT AND DRINK WITH
PEOPLE?

□ YES
□ NO

Descriptive Frequen Perce

cy nt
Discussion About Places to Eat & Drink
Yes 229 76.33
No 71 23.67

Conclusion:
Most respondents like to discuss about places to eat and drink, 76.33%.
 19. DO YOU LIKE TO HANGOUT WITH FIRNDS IN CAFÉ SHOPS?

□ YES
□ NO

Descriptive Frequen Perce

cy nt
Hanging Out with Friends in Coffee Shop
Yes 197 65.67
No 103 34.33

Conclusion:
Most respondents like to hang out with friends in coffee shop, 65.67%.
 TABLE 1

RELATIONSHIP BETWEEN BEVERAGE CONSUMED AT CAFÉ SHOPS AND AGE

Table of Beverage usually consumed by Age

AGE
<=20 YRS 21-30 YRS 31-40 YRS >=40 YRS
Beverage Usually TOTAL
Consumed
Frequency 29 35 36 45 145
Col
Coffee percentage 46.03 47.3 52.94 47.37
Frequency 5 9 5 15 34
Col
Tea percentage 7.94 12.16 7.35 15.79
Frequency 4 2 5 4 15
Col
Cream Blends percentage 6.35 2.7 7.35 4.21
Frequency 18 14 10 25 67
Col
Iced/Hot Chocolate percentage 28.57 18.92 14.71 26.32
Frequency 3 5 9 4 21
Col
Mocha percentage 4.76 6.76 13.24 4.21
Frequency 4 9 3 2 18
Col
Juice percentage 6.35 12.16 4.41 2.11
300
TOTAL Frequency 63 74 68 95

Conclusion:
 Respondents from all different age groups consume coffee but at the same time they
also prefer different type of beverages as well. However, the people from age group of
31 to 40 years consume higher amount of coffee as compared to the rest at almost 53%

TABLE 2
The relationship between average spending in café shops in one visit and monthly
allowance or salary

Table of Average spending by Monthly allowance/ Salary

Monthly allowance/ Salary
Less than 25001 to 50001 to more than TOTAL
Average
spending 25000 50000 100000 100000
Frequency 11 7 3 2 23
Col
0 to 100 percentage 12.64 5.22 4.92 11.11
Frequency 59 77 28 6 170
Col
101 to 250 percentage 67.82 57.46 45.9 33.33
Frequency 16 38 24 6 84
Col
251 to 500 percentage 18.39 28.36 39.34 33.33
Frequency 1 12 6 4 23
More than Col
500 percentage 1.15 8.96 9.84 22.22

TOTAL Frequency 87 134 61 18 300

Conclusion:
Most respondents, who have monthly allowance no more than 100000, have the
average spending in café shop in one visit equal to 101 to 200. Other respondents, who
have monthly allowance more than 100000, spend 251-500 on average in café shop per
visit
 TABLE 3
The relationship between source of information and gender

Table of Source of information by gender

Gender
Male Female TOTAL
Source of information
Frequency 17 18 35
Col
NEWSPAPER/MAGAZINE percentage 11.81 11.54
Frequency 3 6 9
Col
RADIO/TELEVISION percentage 2.08 3.85
Frequency 54 42 96
Col
FAMILY/FRIENDS percentage 37.5 26.92
Frequency 41 48 89
SOCIAL NETWORK Col
SITES/APPS percentage 28.47 30.77
Frequency 11 16 27
Col
WEBSITE/BLOGS percentage 7.64 10.26
Frequency 18 26 44
Col
POSTER/BROCHURES percentage 12.5 16.67

TOTAL Frequency 144 156 300

CONCLUSION:
For most male respondents, they get updated information about café shops from their
friends or family, while most female get the information from social networks but at the
same time they get the information from family and friends as well regarding the café
shops.

TABLE 4

The relationship between brand of café shop and gender

Coffee brand that first comes to mind based on gender

Gender
Male Female TOTAL
CAFÉ SHOP
Frequency 96 95 191
Col
STARBUCKS percentage 66.67 60.9
Frequency 11 14 25
Col
CAFÉ COFFEE DAY percentage 7.64 8.97
Frequency 15 18 33
Col
BARISTA percentage 10.42 11.54
Frequency 15 21 36
Col
BLUE TOKAI percentage 10.42 13.46
Frequency 1 4 5
COFEE BEAN & TEA Col
LEAVES percentage 0.69 2.56
Frequency 6 4 10
Col
MCDONALDS COFFEE percentage 4.17 2.56

TOTAL Frequency 144 156 300

CONCLUSION:
 Starbucks is the first brand that comes to the café shop visitors when they think about
coffee

TABLE 5

The relationship between average spending per visit in café chop and age group

Table of Average spending by age

AGE
<=20 YRS 21-30 YRS 31-40 YRS >=40 YRS TOTAL
Average
spending
Frequency 6 6 7 4 23
Col
percentag
0 to 100 e 9.52 8.11 10.29 4.21
Frequency 36 31 37 66 170
Col
percentag
101 to 250 e 57.14 41.89 54.41 69.47
Frequency 19 27 16 22 84
Col
percentag
251 to 500 e 30.16 36.49 23.53 23.16
Frequency 2 10 8 3 23
Col
More than percentag
500 e 3.17 13.51 11.76 3.16
300
TOTAL Frequency 63 74 68 95

CONCLUSION
 Most respondents in all age groups have spent 101-250 in each visit to café shops

TABLE 6

The relationship between number of visits per month and gender

Total number of visits per month to café shops by gender

Gender
Male Female TOTAL
No. of visits per
month
Frequency 60 60 120
Col
0 times percentage 41.67 38.46
Frequency 57 63 120
Col
1-3 times percentage 39.58 40.38
Frequency 16 25 41
Col
4-5 times percentage 11.11 16.03
Frequency 11 8 19
Col
More than 5 times percentage 7.64 5.13

TOTAL Frequency 144 156 300

CONCLUSION
Most male respondents visit less than 1 time per month to café shops and most females
visit 1-3 times per month
 TABLE 7

The relationship between average spending and gender

Table of average spending by gender

Gender
Male Female TOTAL
Average
spending
Frequency 13 10 23
Col
0 to 100 percentage 9.03 6.41
Frequency 84 86 170
Col
101 to 250 percentage 58.33 55.13
Frequency 38 46 84
Col
251 to 500 percentage 26.39 29.49
Frequency 9 14 23
Col
More than 500 percentage 6.25 8.97

TOTAL Frequency 144 156 300

CONCLUSION
MOST OF THE MALES AND FEMALES SPEND ON AN AVERAGE OF 101 TO 250 IN
PER VISIT TO CAFÉ SHOPS
TABLE 8

The relationship between beverage usually consumed and gender

Table of beverage consumed usually by gender

Gender
Male Female TOTAL
Beverage usually
consumed
Frequency 78 67 145
Col
Coffee percentage 54.17 42.95
Frequency 12 22 34
Col
Tea percentage 8.33 14.1
Frequency 9 6 15
Col
Cream Blends percentage 6.25 3.85
Frequency 26 41 67
Col
Iced/Hot Chocolate percentage 18.06 26.86
Frequency 11 10 21
Col
Mocha percentage 7.64 6.41
Frequency 8 10 18
Col
Juice percentage 5.56 6.41

TOTAL Frequency 144 156 300

CONCLUSION:
The most consumed beverage among males and females in coffee but males tend to
consume more coffee than females.

To test a significant level of word of mouth of café shops

Null Hypothesis = 3 is based on the neutral or middle point of the 5 point scale

The level of word of mouth of Café shops is high

N Mea Std Dev Std Err Minimum Maximum

n
30 3.9222 0.7045 0.0407 1.6667 5.0000
0

DF t Value Pr > |t|

299 22.67 <.0001

Ho: µ = 3 The level of word of mouth of café shops is neutral.

Ha: µ ≠ 3 The level of word of mouth of café shops is high.

Decision: Reject Ho (Pr or p value <.0001 is less than 0.05)

Conclusion:

The level of word-of-mouth of café shops is significantly high.

 Conclusion

The above studies were conducted through online surveys among known group circles
to see the effect of WOM communication. In the social media age word-of-mouth can
travel fast rather than using any other method. In the hospitality business, products are
intangible therefore they cannot be promoted before tasting and most of the
advertisement or promotion is done through verbal communication. The scale, speed
and real-time nature of the social Web and the increased possibilities for people to
share and express themselves play a crucial role in this research project. People have
always talked about their experiences, emotions, needs and products, services and
brands. With the arrival of interactive and social media the patterns, role and impact of
word-of-mouth have evolved and new forms of online communities were shaped. The
studies and the research done with the above methods prove that the word of mouth
marketing is highly profitable to the organisations. With use of WOM communication,
the industry sees a significant reduction in the marketing costs that lead to the higher
profits.

For the research purposes, a combination of exploratory and descriptive method have
been used as the methodology for analysis of the term project that helps to bring out the
sample size for the use of questionnaire survey task. The questions in the questionnaire
constitutes different variety of questions that help in better coverage of wide areas such
as preference, quality, age, expenditure and also the geographical location.

The questionnaire helps us to get plethora of data from large sample size of people.
The selection of the sample size is 300, which was calculated based on confidence
level of 95%, and margin of error at only 4% and population proportion of 15%has been
taken based upon the market of share of industry.

As seen from the responses from the respondents not only show the effect of the WOM
communication on the café industry but also many other criteria which brings out a
detailed study about other things. Firstly, the data provided in the Table 1, shows the
details of the selection of favourite beverage among the different age group and it
shows that the people in the age group 31-40 selected coffee as their favourite
beverage. Table 2 and table 3 show the spending and selection among the genders of
different beverages from the different source of social media platforms and both the
genders prefer Starbucks as their most loved café. It also shows the monthly
expenditure of people on café’s. Table 8 show the choice of beverage but the males
tend to consume more tea as compared to females. In the end we put the hypothesis to
test to see the outcome of hypothesis of the given data and we found out that the WOM
communication in the given is significantly high.