Research, Pricing, and Marketing Assignments

PART 1: RESEARCH

Located in downtown Chicago, Rothbart’s Egg is a combination juice bar and art gallery which provides emerging visual artists the opportunity to showcase their work and network with art galleries and more established artists. During the day, the Egg brings in revenue through smoothie sales and provides an eclectic environment for students and employees from the Loop area to relax and view local art. At night, the Egg offers a limited cold tapas-style appetizer menu and adult beverages. In any given metropolitan area you will find smoothie shops, cafés with art on the walls, bars, and art galleries, but rarely will you find a place that so seamlessly combines all of these enterprises.

The success of Rothbart’s Egg will come in part from our reach to several target markets: college students, visual art patrons and buyers, and general downtown public. Our college student market consists primarily of undergraduates between the age range of 18-24 with incomes of less than thirty-thousand per year, who spend long daytime hours in the campus area studying, attending class, and collaborating with fellow students. Our art market consists of patrons and buyers interested in fostering growth in the contemporary art world, and therefore spans many income levels and artistic styles. Because our gallery showcases emerging artists, buyers will not be spending more than 400 dollars per piece. The general downtown public audience includes thousands of people who live, work, and visit in the Loop. Residents of the Loop have an average yearly income of $120,000. As the second largest central business district in the US (after Manhattan), the Loop is a stable hub of the city, and a hotspot for food, retail, and housing.

Although Rothbart’s Egg is a unique enterprise bringing many already-existing enterprises together in a completely new way, it will still have to compete against several similar establishments including bars and smoothie shops. There are twenty-eight bars within a 1-mile radius of the center of the Loop, any of which would be in direct competition with the Egg’s evening beverage menu and lounge atmosphere. Jamba Juice is a very popular and successful nationwide smoothie chain with locations all over Chicago. Jubilee Juice and Brian’s Juice Bar and Deli are two more examples of health-focused smoothie shops and delis near the Loop in Chicago. Although not located in the Loop, The Hothouse in Wicker Park, Chicago, is a competitor because it is a non-profit music venue, art gallery, comfy lounge and bar, and, similar to Rothbart’s Egg, focuses on displaying student talents and creating an inlet for emerging artists.

Tapas bars and restaurants will not be part of Rothbart’s Egg’s competition, even though the Egg will have a tapas-style appetizer menu. Unlike traditional tapas restaurants, the Egg’s menu will be smaller and not limited to Spanish cuisine. The Egg’s focus will be on atmosphere and our beverage menu. Other Loop galleries will not be direct competitors because artists do not show their work at multiple galleries, and different artists attract different audiences.


Audience Research

We interviewed 24 patrons at smoothie shops and coffee shops in the campus area of Champaign-Urbana, Illinois. In addition to demographic information, we researched frequency, time of day, and reasons for visiting their respective establishments. Further analysis of our research revealed several clear trends. Most of the patrons interviewed were students or university professionals—probably due to the on-campus locations of both establishments. Smoothie consumption in adults over the age of 40 was rare. Most smoothie shop patrons visited infrequently; only a few times every few months. Most morning coffee shop patrons never drank smoothies, while most afternoon coffee shop patrons drank smoothies at least once a week. Most morning coffee shop patrons got their beverages to go, while afternoon patrons were far more likely to order a beverage to stay. Atmosphere was the number one factor in enticing patrons of both establishment types to have a beverage to stay. 68% of interviewees seemed interested in an establishment like Rothbart’s Egg.



PART 2: PRICING
Rothbart’s Egg determined its pricing based on direct and indirect competitor prices. Primary smoothie competitors include Jamba Juice ($3.50-$4.95), Jubilee Juice ($3.50-$5.50), and Brian’s Juice Bar ($3.25-$3.75). Tapas restaurants (indirect competitors) in the Loop include: 1492 Tapas Bar ($4.92-$9.92), Emilio’s Tapas Restaurant ($5.95-$14.95), and Bravo Tapas & Lounge ($6.00-$9.00). Average bar prices in the Loop area are as follows:

Beer: $5-$7,
Well drinks: $8,
Top shelf martini: $12,
House wine: $7/glass, $22/bottle.
Juice and milk: $3/glass
Soda: free

Rothbart’s Egg will offer 16, 24, and 32 oz. sizes of smoothies for $3.75, $4.50, and $5.25, respectively. The Egg offers three signature smoothies, one developed by each of the three proprietors, which will sell for $4.00 (small), $4.75 (medium), and $5.50 (large):

Kinsey’s Cravin’ Cranberry—Cranberry, Raspberry, Apple
Amanda’s Angel Food—Strawberry, Banana, Orange
Ellen’s Tiki Surprise—Pineapple, Mango, ??? (third ingredient changes week to week)


The Egg will offer six Tapas-style appetizer plates, as follows:

$5.00
Blue cheese stuffed dates served with French bread
Kalamata Olives stuffed with your choice of blue cheese, goat cheese, almonds, or anchovies

$7.50
Lox-Cucumber Skewers with caper cream cheese
Smoked White Fish with seasonal vegetables and dijon aioli

$10.00
Shrimp and Mango Skewers with chili-lime sauce
Smoked Salmon with blueberries, capers, and roasted pecans


We will also have a full service bar in the evening that will feature a Specialty Martini List and Alcoholic Smoothies. Signature Martini’s will be $10 and any of the daytime Smoothies may have any shot of choice added for an additional $3. The rest of the price list is as follows:

Beer: Domestic-$4 Premium-$5.50 Super-Premium-$7
Mixed Drinks: Well-$8 Premium-$10 Super-Premium- $12
Per Shot Price: Well-$4 Premium-$5.50 Super-Premium-$7
House Wine: $7/glass $22/bottle
Featured Wine (varies by selection): $12/glass $40/bottle
Juice and milk: $2
Soda: $1


PART 3: MARKETING

Rothbart’s Egg will market to each of its target audiences (college students, visual art patrons and buyers, and the general Loop public) through both time-intensive and money-intensive approaches.


Time-intensive approaches include the following:

College Students: CHALKING
Chalking the classroom chalkboards with an advertisement for Rothbart’s Egg, including name, location, hours, and description.
-5 people x 1 hour each = 5 hours chalking

Art Public: NETWORKING
The River North, West Loop, and Pilsen gallery districts have over 100 galleries that participate in a mass opening signaling the start of the Fall art season, always the first Friday in September from 5-9pm. This is a prime opportunity to network and get the word out about Rothbart’s Egg. Networking will be accomplished in two different ways: 1) Have 5 people milling about in different galleries socializing, telling people about Rothbart’s Egg, and carrying clipboards to sign interested people up on our mailing list. 2) On Halsted St. in the West Loop gallery district, have 3 people manning a table with a large grand-opening poster and mailing list signup, handing out menus, info cards, and coupons as described below.
-8 people x 4 hours = 32 hours networking

General Public / Pedestrians: COUPONS
Handing out “Buy One Get One Free” smoothie coupons (good for 3 months) and “Buy One Get One ½ Off” appetizer coupons (good for 3 months) to passing pedestrians during lunchtime rush hour (11am-1pm).
-3 people at 2 hours x 4 days of handing out coupons = 8 hours of coupon handing-out


Money-intensive approaches include:

College Students: NEWSPAPER AD
Purchase a 1/8th page (8 square inches) ad in the Columbia Chronicle, a once-weekly newspaper that is dispersed on Mondays not only to Columbia College students but also to the broader neighborhood. Advertisement focuses on advertising Rothbart’s Egg as a cool young hangout to drink smoothies, study, and chill out.
-Graphic design provided for free by the Chronicle.
-Writing, editing, and proofing performed by the proprietors, free of charge.
$367.27 for an ad in the paper every other week over a period of 18 weeks (9 ads)

Art Public: POSTCARDS IN THE MAIL
Direct mailing of postcards to our mailing list (including galleries and gallery-goers, built from our previous networking at the Fall season opening) every 6 weeks advertising each new exhibition opening at Rothbart’s Egg.
-$62.48 for printing of 1000 postcards (color back and front) on vistaprint.com
-Designed for free by Amanda (professional graphic designer)
-$230.00 for mailing of 1000 postcards using First Class postage at $0.23 each through vistaprint.com
-$100 for addressing, sorting, etc.
-mailing service at vistaprint.com
$392.48 total cost

General Public / Pedestrians: AT&T YELLOW PAGES
Advertisement and listing placed in local Yellow Pages.
-Free listing
-$3,000 one time, 1/8th page, year-long advertisement
-$500 additional charge for 1000 clicks of a sponsored link on Google search.
$3,500 total cost

Personal Budget

Here is a link to my personal budget, the non-group-related portion of this week's assignment.

Personal Budget

The group part is forthcoming in the near future.

~Ellen