starbucks consumer behavior case study ppt

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Consumer Behavior_Explanation of how Starbucks achieve brand success base on attitude and learning

Starbucks, nowadays, is know as one of the most successful brand in North America. This paper will firstly examine how successful it is by statistic number, then explain this success by two consumer behavior theory. One is attitude, the other is learning. At the end of this paper, suggestion for Starbucks to improve is provided. Moreover, how the author of this paper has learned after conducting this research also be provided.

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Giovanni Morra

University of Roehampton submitted paper

Iris Pei-Yi Ng

Globalization of Starbucks (SBUX) has made it a branded coffeehouse across the globe that people all around the world are able to drink a cup of American coffee no matter where we are. People today are no longer drinking a cup of coffee to fulfill their need of caffeine but a cup of lifestyle and experience. Students nowadays who are still pursuing theirs studies with financially supported by parents and loan prone on spending their expenses on Starbucks despite the high price-value of the beverage and desserts in Starbucks. The visit to Starbucks is seemed to be a luxurious lifestyle to some of the students which could be reflected by the behavior of snapping pictures with their cup of beverage and posting the picture on social network everytime they visit this place. The reaction and respond from friends in social network reflect that some of the peers are rather less afford to have splendid expenditure since they have very limited purchasing power compare to those who have consistent income. This also rises up the sensation and satisfaction to behave in a way that students emphasize a lot on pleasure when they receive those envious comments and clicks of " Like " in social network. Simultaneously, such social behavior is adjourn to a contemporary culture of hedonism which students prioritizing the sense of desire and pleasure eluted when they are seemed to be grouped as people who are afford to visit a branded coffeehouse. In other word, students seem to be attracted by the brand of Starbucks and wish to show that they are classified in the group of social group with higher taste. This could be explained in relation with the Theory of Leisure Class proposed by Thorstein Veblen (1899) who uses a car as an example. Someone who owns a new car does not indicate a new transportation but signify a certain extent of status, class and name of the particular person. Max Weber (Breen, 2005) also proposes that the term class is defined as a situation which there is shared typical probability of procuring goods, having a position in life and seeking for satisfaction in oneself. Many of the middle aged adults look at such phenomenon as a trend which students are actually wishing to socialize and fear of being left out if they do not follow their friends to loiter at Starbucks. Therefore, this writing is a plea for the hedonism culture among students to be taken more seriously. This writing also acknowledges the importance of looking at the current social behavior happening among the new generations.

Dr. Hagai Gringarten

Retailers serve as critical differentiators for brands and can be an important part of a firm's competitive advantage. Since consumers often base their buying decisions on impressions of price and store image (Grewal, Krishnan, Baker, & Borin, 1998), this research was designed to determine if there are any significant differences in customer-based brand equity for each retailer, based on customer perceptions of price and store image. This research was a quantitative, non-experimental, exploratory-comparative study using a survey research. A survey was conducted at a regional Southeastern U.S. university with a student body of approximately 3,500. The target population was students who are ardent customers of retail coffee shops. A total of 621 students completed the survey, but only 539 questionnaires were used for data analysis, 250 questionnaires containing McDonald's McCafe survey data and 289 questionnaires containing Starbucks survey data. Descriptive and inferential statistics including t-tests and three-way ANOVA were used to analyze the data and answer the research questions and hypotheses. Overall, Starbucks, the brand, displayed higher brand equity than McDonald's, the brand, in contrast to Interbrand's ranking of global brands where McDonald's is ranked 12 and Starbucks is ranked 60 among the top global brands (2018). The results of this study imply that store image can add to brand equity, thus creating a sustainable competitive advantage for products and firms, while allowing them to charge premiums. Price usually is positively related to perception of quality; the study found that price was not significantly related to customer-based-brand equity in every retail operation.

Sun Joo(Grace) Ahn

Guided by the framework of Self-Determination Theory (SDT), this study examined the effects of external rewards on undermining customers’ intrinsic motivation to engage in a retail loyalty program. Two experiments revealed that participants who received a salient, controlling reward (i.e., a promise of reward with an explicit requirement and deadline, without options of choice) reported lower intrinsic motivation to use the loyalty program than participants who received a non-salient, autonomy-supportive reward (i.e., a promise of reward with a less explicit requirement and no deadline, with options of choice). However, the undermined intrinsic motivation of those who received the salient, controlling reward was enhanced when they were given verbal feedback acknowledging their potential negative feelings associated with using the loyalty program. These findings provide important practical implications for designing a more effective loyalty program.

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Example Of Essay On Starbucks Case Study: Consumer Behavior And Environmental Influences

Type of paper: Essay

Topic: Marketing , Customers , Products , Starbucks , Employee , Workplace , Coffee , Business

Words: 1600

Published: 02/08/2020

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Starbucks is one of the most trusted brands in the world with more than 20,000 stores in 62 countries (Loxcel, “Loxcel Starbucks”). In order to achieve those results, the company had to implement high standards for employee training, customer service, real estate acquisition, and product quality. With a mission statement that focuses on building a great working environment, embracing diversity, promoting human dignity, high standards of product creation, Starbucks does not offer only products to consumers, but it also offers satisfaction to both employees and customers in different communities.

Successful Store Positioning. It is possible to notice that Starbucks is located at high-traffic areas, such as airports, commuting routes, or college campuses. Location can be a significant factor that determines success because the company can gain more exposure, thus saving resources on marketing campaigns. Starbucks Focuses on Expansion Constantly. New stores are constantly opened because of licensing and international expansion. While the company had only 6,000 stores in 2003, they currently have stores opened at more than 20,000 locations worldwide. Employee Quality. When compared to the average fast-food industry turnover rates, Starbucks has one of the lowest barista turnover rates in the industry, which is estimated at 70 percent (Moon and Quelch, “Starbucks”). Diversification of Products. Although Starbucks started out as a coffee shop, they expanded into other markets to increase revenue. For example, they currently offer tea, iced tea, smoothies, and other beverages in addition to coffee. When the company added sandwiches, hot breakfasts, and other food items on the menu, they also started competing with fast-food companies, such as McDonalds, which responded to the challenge by adding coffee to their own menus. Reduced Quality. Because of high demands, Starbucks had to place more emphasis on efficiency rather than product quality. An example is the introduction of flavor-locked packaging, which does not provide the same taste as fresh ground coffee. Apart from minor sacrifices, it is possible to notice that the company still follows the guidelines used to ensure their decisions are in compliance with their mission statement.

PERSONAL AFFECT

Positive Aspects. The first positive aspect I appreciate is high-standard employee training and customer service. Because Starbucks focuses on both employee and customer satisfaction, they deserved their success as an international brand. Second, Starbucks frequently creates new coffee-based drinks, and I respect their ability to produce innovative products that capture attention and entertain the customers. Finally, Starbucks has an environmental mission statement that recognizes the importance of using environmentally friendly products and promoting environmental responsibility as one of the corporate values. Because of their commitment to environmental leadership, they are more likely going to gain trust and credibility among their consumers. Negative Aspects. Because Starbucks is a chain store, some sacrifices need to be made in order to satisfy the needs of a growing audience. I personally do not agree with the company’s choice to venture into other types of beverages, such as tea and smoothies, or include a variety of foods on their menu. The second critique is the over-saturation caused by opening too many locations after real estate acquisition standards were lowered to satisfy the needs for rapid growth (Stone, “Lax Real Estate”). Although expansion is required to increase revenue and profitability, it is important to consider that increasing revenue by diversifying offers can lead to lower product quality because it is exchanged in favor of quantity.

Gourmet Coffee Buying Decisions

Target Market. According to Starbucks CEO Shultz, the target market in the early stages of the company’s development consisted of white-collar patrons, who were well-educated and between 25 and 44 years of age (Moon and Quelch, “Starbucks”). Because of that description, is possible to notice that their primary market is more likely going to be inclined to gourmet coffee. Market Needs. Tending to the needs of their market is one of the key reasons for Starbucks’ success. According to the company, people who visit Starbucks want a cup of coffee, but the ambient invites them to stay (Moon and Quelch, “Starbucks”). In a sophisticated environment, gourmet coffee becomes a primary choice over regular coffee. Innovation. Drinking coffee has become a routine for most people, so it is natural to assume they will desire new experiences occasionally. Because Starbucks offers a variety of products, customers can experience drinking coffee as a pleasure rather than a habit. The need for new experiences and the availability of those experiences is one of the reasons people are more likely going to buy gourmet coffee. Fear of Missing Out. Scarcity is an important principle in sales. Because several gourmet drinks and featured offers are branded by Starbucks, they cannot be obtained in other stores. Some offers may also be a limited edition drink, which makes them desirable to consumers. Incentive Programs. To reward customers for their loyalty, Starbucks offers a loyalty program for frequent customers. According to their Terms and Conditions, customers are entitled to several benefits, such as free drinks and meals on their birthday, personalized offers, and more (Starbucks, “My Starbucks Rewards”). With an incentive program, customers are more likely going to choose gourmet coffee for better rewards or as free gifts for their loyalty.

Environmental Influences in Buying

Ambiance. Several regulations and decoration choices contribute to the ambiance in Starbucks stores. The goal of their ambiance is to create returning customers by encouraging them to stay in an environment that emphasizes building a community, features suitable music, and offers a comfortable physical layout. For example, the seating areas in stores are designed to encourage lounging. The music needs to be soothing because the customers will desire to stay longer and relax in a slow-paced environment, which helps them distance from the fast-paced environments they are usually exposed to both at home and work (Thompson and Gamble, “Starbucks Corporation”). Regulating the Aroma in Stores. Aromas help people make buying decisions because smell affects taste significantly. According to Starbucks’ regulations, employees are encouraged to avoid strong perfumes and colognes (Moon and Quelch, “Starbucks”). The food is also covered and smoking is forbidden. With those regulations, the smell of coffee is emphasized as the strongest scent in the store, and may influence the buyers’ decisions as gourmet coffee smells more appealing than regular coffee. Employee Training. Starbucks understands that satisfied employees can offer better customer service (Moon and Quelch, “Starbucks”). For the company, both customer and employee loyalty are important because employees can form bonds with customers and (Moon and Quelch, “Starbucks”). Several regulations are in place to ensure customer service is exceptional. For example, employees are taught to offer free refills to customers who spill their drinks or offer compensations, such as coupons, to dissatisfied customers (Moon and Quelch, “Starbucks”). Building Trust. Demonstrating expertise in the area of service is critical for gaining trust among the customers. Employees at Starbucks are not only trained to treat customers with respect, but they are also taught how to brew excellent coffee and how to make recommendations to customers. By presenting their knowledge about coffee, employees are observed as expert baristas and have more influence over the customers’ decisions. Exposure to High-Quality Brands. Apart from serving coffee, Starbucks also has a store in which they sell premium coffee. As visitors become regular customers, they will be frequently exposed to those brands, and they may eventually decide to try one of the gourmet coffees offered at Starbucks.

Starbucks Web Site Review

Although the professional graphical design is evident on the Starbucks web site, the content and elements are most likely not distributed in a way that will maximize their marketing efforts. The main drawback is offering visitors too many options, which makes it difficult for the customer to make a decision when buying products. However, it is also important to note that the landing page shows news related to their menu or offers and recent informative blog posts. With that approach, the visitor has the option to notice important updates and offers immediately. In the featured offers, Starbucks shows concise descriptions and an image for each featured product. When a visitor clicks on a product, the description also includes nutritional values. Their approach is excellent because presenting fewer products always improves conversion rates, and a beautiful image makes the product more desirable (Gehl, “12 Ways”). However, it is also important to consider that the description is aimed at describing the flavors, which is an effective way of marketing a product to people who are already inclined to gourmet coffee or enjoy experimenting with new flavors. While the featured offers may increase sales among that population, they probably do not increase sales among other customers because they do not understand how buying those products will benefit them (Gehl, “12 Ways”). For example, clearly stating health benefits in the product description of the ingredients used could increase more sales because people will have a reason to buy the product other than great taste.

Works Cited

Gehl, Derek. “12 Ways to Increase Online Sales.” Entrepreneur, n.d. Web. 7 June 2013. Loxcel. Loxcel Starbucks Map Showing 20,834 Stores. 2013. Loxcel, Toronto. Loxcel Cell Tower & Map Consulting. Web. 7 June 2013. Moon, Youngme, and John Quelch. Starbucks: Delivering Customer Service. Harvard College. Boston, MA: Harvard Business School, 2003. Web. 7 June 2013. Starbucks. “My Starbucks Rewards™ Program – U.S.” Starbucks, 2013. Web. 7 June 2013. Stone, Brad. (2008). Lax Real Estate Decisions Hurt Starbucks. New York Times, 2008. Web. 7 June 2013. Thompson, Arthur A., and John E. Gamble. “Starbucks Corporation.” The McGraw-Hill Companies, 1999. Web. 7 June 2013.

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Starbucks Case Study

Jul 09, 2014

320 likes | 1.12k Views

Starbucks Case Study. The Acquisition of Seattle’s Best Brad Gilbert Jessica Iversen Holly Kunz Methodist University . Overview. Who? What? When? Where? How? Why? Courses of Action Solution/Results. Who?. HISTORY Starbucks is the largest coffeehouse company in the world

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Starbucks Case Study The Acquisition of Seattle’s Best Brad GilbertJessica IversenHolly KunzMethodist University

Overview • Who? • What? • When? • Where? • How? • Why? • Courses of Action • Solution/Results

Who? HISTORYStarbucks is the largest coffeehouse company in the world -Founded in Seattle in 1971 -Over 17,009 locations in over 50 countries -2010 Net income $945,600

Who? Seattle’s Best Coffee HISTORY: -1970 Whidbey Island, Washington (Wet Whisker)-Stewart Brothers Coffee Pier 70 -Pike Place Market -1988 SBC- local restaurant blind taste test -1998 AFC Enterprises

Starbucks vs. Seattle’s Best 2003 Comparison • 4,952 location in North America • 90 Seattle locations • # of employees • Retained Earnings • 129 locations in North America • 22 Seattle locations • # of employees • Annual sales (2002) $

What? • The Acquisition of Seattle’s Best Coffee (Set the scene, give background) • AFC Enterprises accounting scandal • Seattle’s Best and Cinnabon up for sale • (The sale of these companies has allowed AFC Enterprises to shift focus to Popeye’s and maximize the value of their portfolio)

When? • April 2003 (timeframe)

Where? • Seattle, Washington (location)

How? • Both Starbucks and Seattle’s Best Coffee are major companies in the Seattle and the Pacific Northwest coffee scene. They are often competitors for the same retail space. Both have loyal fans with an almost cult-like devotion to their preferred brand. (Identify main players/relationships/interactions)

Why? • Should Starbucks continue to compete with Seattle’s Best Coffee? Starbucks had the money and saw an opportunity to acquire their competitor. Should they purchase them to close them down, prevent them from growing, or use them to expand the overall corporation? (address financial management issue-issue that forces an examination of all courses of action)

Courses of Action • 1. Do not buy Seattle’s Best. Continue to compete and operate as before. • 2. Buy SBC and close them down and completely absorb them. • 3. Buy SBC and keep them as a separate company. Create differentiation between brands. Use SBC distribution network to help Starbucks enter grocery stores.

The Future of Starbucks • Starbucks/Peet’s Merger • Starbucks/Green Mountain • Starbucks Specialty Barista Bar • Regional Beer/Wine/Cheese

References • http://www.seattlepi.com/business/article/Starbucks-to-buy-Seattle-s-Best-Coffee-1112367.php • http://adage.com/print/96033

Starbucks vs. Seattle’s Best

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• Preferences

Starbucks - study case - PowerPoint PPT Presentation

Starbucks - study case

Strategic human resource management – powerpoint ppt presentation.

• FINAL PRESENTATION
• Ivonne Suwarma M9721811
•  EVALUATION FRAMEWORK QUESTIONS
• Business Environment
• Current Architecture
• Three legs of the stool
• Strategic Human Resource Management BA 7200701
• CEO Howard Schultz
• rapid expansion
• enhanced competition from lower-price fast food chains (McDonald's and Dunkin' Donuts)
• joined the Starbucks marketing team
• convinced the company to set up an espresso bar in downtown Seattle
• had 140 such stores in the Northwest and Chicago
• successfully compete against other small-scale coffee chains
• serving 20 million unique customers in well over 5000 stores around the globe
• Opened average 3 new stores a day.
• CEO Orin Smith (2000-2005)
• Entered the market of Japan, Singapore, and Hawaii (joint ventures)
• Provide a GREAT WORK ENVIRONMENT and treat each other with respect and dignity.
• Embrace DIVERSITY as an essential component in the way we do business.
• Apply the HIGHEST STANDARDS of excellence to the purchasing, roasting and fresh delivery of our coffee
• Develop enthusiastically SATISFIED CUSTOMERS all the time
• Contribute positively to our COMMUNITIES and our ENVIRONMENT.
• Recognize that PROFITABILITY is essential to our future success
• Product Supply
• building relationships with growers and exporters
• checking on agricultural conditions and crop yields
• searching varieties and sources
• fixed-price purchase commitments
• secure an adequate supply of quality green coffee beans and to limit its exposure to fluctuating coffee prices in upcoming periods
• in-and-out service
• Extended drink menu
• Convenience
• Purchased directly from small farmers who cultivated less than 3 hectares of land
• Paid a guaranteed price of 1.26 Arabica, 1.06 Robusta, and 1.41 organic beans
• Offered farmers advanced financing to help cover costs
• Developed long-term relationships with cooperatives
• Environmental stewardship
• Ethical sourcing
• Community involvement
• Increase communication
• Knowledge/ info sharing
• More coordination
• Efficient functional structure
• Divisions overlapping
• Duality of command
• Confusion and wasteful redundancy
• an orientation to the company
• customer service skills
• the technical skills necessary to work in the stores
• leadership skills
• customer service
• career development.
• Streamlining Management
• Reduce companys expenses
• Focus on global expansion
• Decrease the assumption of too much stores in every corner
• Higher employee turnover rates
• Dissatisfied employee who undergo the streamlining management
• Value of Starbucks in the customers eyes
• Focus on customers
• Long-term relationship
• BEST BARISTAS
• BEST COFFEE
• BEST ENVIRONMENT
• CAMPAIGN TO RETAIN CUSTOMERS
• CAMPAIGN TO SELL THE COFFEE EXPERIENCE
• CAMPAIGN TO ATTRACT NEW CUSTOMERS TO THE 3RD PLACE
• Need to sustain its exclusivity and premium price
• Too many Starbucks around, the premium and luxury is compromised
• The product once though of as an exclusive product is now a generic product which loses its premium

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