Qualitative Analysis Of Starbucks

The survey questions mostly consisted of multiple choice questions, two open-ended questions, allowing written responses, and one qualitative response question. These questions were chosen to establish consumers differences and comparative perspective of Starbuck’s competitors, their daily usage of the social media platforms, the coffee shops visited frequently, and their opinions on consumers who frequent Starbucks. The survey contains one matrix/rating scale question ( Appendix I, Question 5) based on how important qualities are when choosing a coffee shop. Lastly, there were two demographic questions. The demographic questions are for a general understanding on consumers behavior based on age group and gender. For an overview of the survey, see appendix I.

In Amanda Roadarmel’s essay “Starbucks: More Than Just Coffee” published in the Arak Journal, she describes the many reasons why people go to Starbucks and the marketing ploys behind them. Using college students as one of her main examples, she describes the ways in which Starbucks caters to their customers. She argues that Starbuck’s main draw is not their food and drink but the lifestyle that is associated with the chain. This lifestyle is what draws people to pay four dollars for coffee as the consumer sees the price as not just a coffee price but the price its cost for the comfort of being a Starbucks person. Starbucks describes its average consumer as middle aged, well-educated, middle class Americans.

One major concern is that the participants used were not necessarily current Starbucks customers. The purpose for this was to increase and promote Starbucks to non-customers. Questions regarding the current Starbucks menu and ambiance does not solicit a true response if the individual surveyed is not a customer. Furthermore, competition coffee retailers are also a large concern. Surveying a

Starbucks will be the first come in your mind when you want to have a cup of coffee. Don’t you feel curious about why is Starbucks so successful? This report explains how Starbucks take advantage in consumer purchase decision making process, how does Starbucks attract customer, how does Starbucks segment its market and new trends in society affect purchasing process.

Former Starbucks Executive Scott Bedbury once said “Brands need to communicate that they are along for the ride. They are made of flesh and emotion. That they are made possible by people” (10 Quotes from Starbucks Executives, 2010, para. 6). Starbucks’ beliefs in customer service, community solitude, and a strong business core stretch far behind just a belief in a quality caffeinated product. “We make sure everything we do honors that connection – from our commitment to the highest quality coffee in the world, to the way we engage with our customers and communities to do business responsibly” (About Us, 2011, para. 4). Thus, this commitment is the motivation behind Marketing Team A’s proposed

Nevertheless, Starbucks gradually deviated from the position it originally set up at first for its customers. Experience has been its unique selling proposition, which includes the quality of coffee, the aroma and the decoration in the stores and the relationship between baristas and customers, but that has been compromised by the intention of mass distribution and cutting operation costs. Starbucks has reached ubiquitous presence with its products and enhanced the speed of service at the expense of perceived quality, so much so that customers have formed negative brand associations with it, such as referring to it as a heartless corporation, after aggressive expansion. It deteriorated customer-based equity (Keller, 2012). Although Starbucks might improve the brand performance and the variety of different usage situations, the brand image suffered from weakened favorability of brand association (Keller, 2012). As a result, the whole model of brand resonance (Keller, 2012) was affected and became less likely to build emotional connection with customers, which gave small competitors the opportunity to satisfy customers’ expectations that Starbucks failed to fulfill.

Cognition gives the companies information on how consumers respond to different marketing stimuli they face for the products used. It has to do with customer’s thinking and how do they behave toward a particular product. To be more specific and also reading the book “cognition refers to the mental structures and processes involved in thinking, understanding, and interpreting stimuli and events.” (Peter & Olson, pg. 21)

The context change in form that Starbucks found itself competing with smaller chains that resembled its former pre-expansion model with competitors focusing in creating symbolic-expressive value and fast food restaurants that had started to offer specialty coffee with more aggressive advertisement at a lower cost. The competitive context changed for Starbucks because it’s focus in mass distribution channels and its retail footprint strategy stated its product within a standard performance product value; this affected the value perception of the product.

Exhibit 8 shows customer retention information. We can find from this data, that established customers and new customers are quite different in respect of education, income and attitudes toward Starbucks. According to the exhibit, customers who first visited Starbucks five years ago have higher degree of education and higher income level. Beside that, new Starbucks customers do not see it as a brand of high value, while established customers believe Starbucks to be brand they trust (50%), offering high quality product (51%). Next exhibit suggests, who customers visiting Starbucks stores often, are more satisfied, than customers who buy coffee from the company average four visits per month.

The Starbucks Company is a purveyor of gourmet coffee that was founded in 1971 at Seattle’s Pike Place Market (Retrieved March 10, 2015, from http://www.starbucks.com/about-us/company-information). At that time Starbucks was a single storefront that offered premium, fresh roasted whole bean coffees. Since opening that single store Starbucks has grown to an international presence with branding that is recognizable worldwide. In addition, Starbucks has increased their product line beyond hot and cold coffee beverages to include hot and cold teas, packaged whole bean and ground coffees, high quality, fresh foods and coffee making equipment and supplies. Starbucks operates a total of 19,767 company operated and licensed stores and operates in 62 countries. In addition to the Starbucks’ brand the company also owns and operates other well-known brands such as Teavana and Seattle’s Best Coffee. (Retrieved March 10, 2015, from http://news.starbucks.com/uploads/documents/Starbucks_Fiscal_2013_Annual_Report_-_FINAL.PDF)

Their marketing research shed light on the fact that their focus had shifted from the consumer towards store growth and product expansion. The research also highlighted the fact that they were lacking in customer service. Through these studies, Starbucks was able to identify what their customers wanted in terms of satisfaction. Consumers wanted Starbucks to make improvements to their service and also start offering better prices and incentive programs.

Recently, brand equity has increasingly been defined in customer-based contexts. It defines brand equity as the value of a brand to the customer (Aaker, 1991; Keller, 1993) defines brand equity as “a set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm and/or to that firms’ customers." Brand awareness, brand associations, perceived quality, brand loyalty and other proprietary assets were the five assets of brand equity. Keller (2003) argued that the power of a brand lies in the minds of the customers and what they have experienced and learned about the brand over time. He defines customer-based brand equity as “the differential effect that brand knowledge has on

According to Aaker (1991), “brand equity is the set of brand assets and liabilities that is linked to a brand, its name, and symbol that add to or subtract from the value provided by a product or service to a firm and/or to that firms customers”. Some academics have given the components of brand equity. It consists of “perceived quality, brand associations, brand awareness and brand loyalty “(Aaker, 1991; Baldauf et al., 2003; Keller, 1993; Selase Asamoah, 2014), and this is the first version of components of it; regarding it as the “consumer 's behavior” toward a make, Keller (1993) proposes two elements: “brand awareness and brand knowledge”; Kim et al.(2008) argue that strong brand equity boosts “consumer satisfaction, repurchasing intent, and degree of loyalty”. Thus, past

In consumer behavior study, the construct brand personality has received a considerable amount of attention, defined in Aaker’s (1997) article as the “set of human characteristics associated with a brand”. This idea is well accepted by most proactitioners and marketing academics (Aaker, 1997; Carr, 1996; Duboff, 1986; Durgee, 1988; Kassarjian, 1971; Levy, 1959; Ogilvy, 1988; Plummer, 1985; Sirgy, 1982) for decades, and now has become an important topic of marketing research because of its implementation in consumer behavior theory: differentiating a brand in a product category (Plummer, 1984), enhancing consumers ' preference and loyalty to a brand (Fournier, 1998), and creating brand equity (Keller, 1993). It also has impacts on influencing brand recognition, brand beliefs such as perceived quality (Ramaseshan and Tsao, 2007), and brand associations (Freling and Forbes, 2005).

Executive Summary..................................................................................................................................3 Market Segmentation ...............................................................................................................................4 Methods of Segmentation................................................................................................................4 Lifestyle Segmentation in the Specialty Coffee Market ..............................................................5 Segments