Coffee Truck
In addition the market for coffee is also in a state of monopolistic competition. Coffee is widely available from coffee shops like Starbucks, from restaurants, and also people drink coffee made at home. The nature of the competition for our coffee truck will change depending on the location, but there is always a need in monopolistic competition to find ways to distinguish our product/service from the competition, and create a distinctive brand for the truck.
Target Market and Key Economic Concepts
The target market for the coffee truck will change somewhat with each location. A location downtown, for example near the Rail Runner, would have one particular clientele, while a location near UNM would have different characteristics. The underlying factor is that all customers want coffee, related drinks, and snacks. The demographic characteristics might be different depending on location, but the psychographic characteristics will be similar for each market. Even for fair trade coffee, demand is inelastic (Niemi, 2009). The demand for coffee, as noted, is inelastic because coffee is a ritualistic purchase -- coffee drinkers do not skip their morning cups very often. The consumer from a coffee truck is specifically someone who wants their coffee on the go. In that sense, we are competing against the other coffee trucks, and coffee shops that offer coffee to go. There is a greater convenience associated with the coffee truck.
The other economic aspects that need to be understood is the size of the market in any given area. This will be dependent both on the level of traffic in an area, adjusted for ho wmany people are likely to stop. Coffee is a low cost purchase, so income is usually not an important factor, but it could be, as one critical substitute is making coffee at home. The market potential is therefore defined by the people who might buy a coffee out of home. This is a fairly large market,...
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