Coffee beverages are becoming a very familiar sight within the bay area and have been for some time now. It can be drank during all times of the day and currently is being drank by fifty-two percent of the United States, over the age of eighteen(Coffee Facts and Figures). Coffee companies are sprinting through newer markets trying to get a piece of the action. Certain demographic locations will be sought out first. These will be the places that marketers feel will have the most significant effect on coffee sales in the shortest amount of time. By looking at Santa Clara and Alameda counties, we will be able to compare demographic variables to determine which county will be most marketable for coffee.
By choosing two PMSA’s, which are primary metropolitan statistical areas, we are able to study two metropolitan areas of over one million people to determine which county is better suited for marketing coffee. Both PMSA’s are of similar size, Santa Clara being about 200,000 bigger at 1.6 million. Both are even in the same general location: the Bay Area. The factor that will separate these two areas are demographic variables. Demographic variables divide a market into smaller groups based on size, population or distribution.
One of the most important demographic variables when looking for a coffee market is age. Young people, under the age of eighteen are less likely to drink coffee, so it is important to calculate how many consumers above the age of eighteen live in each PMSA. According to Coffee Facts and Figures, “fifty-two percent of all adults over eighteen drink coffee daily in the U.S.” Since Santa Clara County has 165,000 more adults (18 & over) than Alameda, and presumably fifty-two percent drink coffee, Santa Clara County has 95,000 more potential coffee drinkers just from age alone.
Another demographic variable that ties in with age is population. Since coffee is a drink generally for consumers over the age of eighteen we can connect the two by saying that since the population of Santa Clara County is bigger, it has a larger grouping of individuals over eighteen, thus giving them a larger target market.
Occupation is another variable that has an effect on the buying behavior of consumers. People who have jobs are not only up in the morning to purchase coffee, but they also have the money to purchase a cup. A person who works is much more likely to purchase a cup of coffee than someone who doesn’t. The advantage goes to the Santa Clara market again because they have 150,000 more commuters that ride to work each day than Alameda county. This is again 78,000 extra people, according to Coffee Facts and Figures (52%) that would potentially buy coffee in Santa Clara that wouldn’t in Alameda. Social class also goes along with occupation. Money and spending habits are what place people into social classes. Since coffee is an expendable item, people in higher social classes will be more likely to purchase it than other classes because it is not a necessity. Both PMSA’s are fairly similar in this department. Both counties are well above the poverty line, while property in Santa Clara and the cost of living is slightly higher, thus raising the social class.
The last demographic variable that we will look at in determining which market to focus on is income. Income is extremely important in the marketing of coffee. Because coffee is not a necessity, it is only bought by those who can afford its extra cost. This generally lies in the hands of those with higher incomes, who can more easily afford a cup of coffee every morning. Santa Clara County’s median income per household is $74,335. This is $19,000 more than the average family from Alameda. The same can be found per capita. The average single from Santa Clara earns $6,000 more at $32,800 than does a single from Alameda. This shows that an employed individual over the age of eighteen is more likely to buy a cup of coffee if he lives in Santa Clara rather than Alameda because he has a higher income to support this habit.
Santa Clara is a better place to set up a coffee market but not by much. While it is stronger in every demographic segment, most of it’s strength has to do with it’s size. The Alameda area is two hundred thousand people smaller, which keeps its numbers slightly below Santa Clara’s. Alameda is not a weak market, it simply lacks the size and the financial aspects which make Santa Clara such an appealing market. When looking for the best area to market coffee, we must look for the area with the biggest target market. Santa Clara has more people within our target market, therefore, we will market our product towards Santa Clara County.