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Marketing

Plan:
Starbucks
Marketing Assignment
2.0

Group 3

Members :
Aditya Sood 2013PGP020
Nupur Sahni 2013PGP263
Salil Aggarwal 2013PGP338
Sruthi Thomas 2013PGP402
Sudhir Kumar Singh 2013PGP407
Vivek Devaraj 2013PGP450

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PROBLEM SOLVING

Starbucks purchases and roasts high-quality, whole bean, specialty coffees and sells them along
with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections,
coffee related accessories and equipment. It is a premium coffee outlet with 20,891 stores in 62
countries.

Having understood the background of company the worlds largest coffee outlet, we analyzed
the consumer market in which Starbucks operates.

Problem solving can be done using three methodologies. Extensive problem solving is done in
case of expensive purchases. An expensive high risk infrequent purchase will require a lot of
detailed information and careful analysis before deciding which one to purchase. Limited
approach is used if the item being purchased is low value and frequently bought, it follows that
the buyer will spend less time and effort and will have less involvement with the purchase. In
the routinized approach, consumers have experience with the product category and a well-
established set of criteria with which to evaluate the brands they are considering. In some
situations, they may search for a small amount of additional information; in others, they simply
review what they already know.

In case of our product STARBUCKS, consumer will go for limited problem solving methodology
as it is an inexpensive product.
.
Barrier to entry is checked.

Expense of other speciality coffee is checked.

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Health consciousness of consumer is studied and checked whether he is deviating from
the caffeinated drinks.

Checking whether too many stores of Starbucks are set up people get irritated on seeing
too many stores.

Information is gained first from memory - if insufficient then from external resources,
like

Memory - Previous experience with Brand

From an Advertisement

Researching the Brand

External - Friends, Family

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

Contribute positively to our communities and our environment

Starbucks appeals only to an educated, upscale consumer

THE BUYING DECISION PROCESS

The "Consumer Decision-Making Process" is what every single customer goes through before
trying out a new product or brand. It consists of a number of steps that influence the consumer
along different stages. The figure below shows the single steps of that process. All these steps
are dependent on social, cultural, individual and psychological factors.

Consumer Decision Making Process

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The different steps in consumer decision making process in the consumer behaviour of
Starbucks are explained in detail below.

I. PROBLEM RECOGNITION

The buying process starts when the buyer recognizes a problem or need triggered by
internal or external stimuli. The need recognition here is for people to realise their need
for coffee. This could be because of internal factors or external stimuli. A persons
normal need, could rise to a threshold level and become a drive. It could also be due to
external stimuli, like the presence of a coffee outlet, or an advertisement or a fellow
colleague mentioning about how good the morning coffee was. These factors all can act
as stimuli, and create within the buyer a need for coffee. Since Starbucks belongs to one
of the top coffee brands, people will automatically think of the company when it comes
to satisfy the need.

II. SEARCH PROCESS

The search process for satisfying the need takes place at two levels. The milder search
state is called heightened attention, in which the person simply becomes more receptive
to information about the product. In this stage, the person probably gathers more
information about popular coffee outlets and coffee brands from word of mouth or
advertisements noticed, once the need for coffee has been stimulated. In the active
information search, looking for the product and available alternatives becomes a much
more thorough process, in which the buyer thoroughly tries to make out which are his
available alternatives for fulfilling his need for coffee through a more intensive search.
Because Starbucks belongs to the low-involvement product purchases, the customer
does not exactly know what kind of beverage the person might want until he/she gets
into the store. Therefore, the information search can also take place while being at the
store. The coffee brand provides in store promotion by eye catching advertisement of
popular or new products (drinks or food) or having programs such as "one free coffee
day" / "happy hours" to promote their coffee.

The information sources from which the consumer may derive information from fall
into a number of categories. Personal sources are sources like family, friends, colleagues
etc who might suggest a particular brand of coffee or recommend a new coffee outlet
that they might have tried recently. Commercial sources of information are
advertisements, websites, sales persons etc who actively try to promote their product
and give information about it to people who are not aware of it. Experiential
information sources come from handling or using the product and thus, the information
derived is an outcome of experience with the product.

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The market maybe partitioned into several categories while arriving at various possible
alternatives successively. The total set will initially consist of all the possible sources of
coffee. The awareness set would include the popular coffee brands that the buyer is
aware of like Caribou, Diedrich, Subway, Starbucks, Dunkin Donuts etc. Out of these, the
buyer would shortlist the products to be considered to form the consideration set. Once
the buyer has decided that he wants coffee from a nearby coffee outlet, he would
narrow it down to Starbucks and Dunkin Donuts as the choice set. Finally, the decision
is to be made from this set.

Total set Awareness Set Consideration Set Choice Set Decision

Starbucks Starbucks Starbucks Starbucks ?


Dunkin Dunkin Dunkin Dunkin
Donuts Donuts Donuts Donuts
Caribou Diedrich Diedrich
Diedrich Caribou
Subway

III. EVALUATION OF ALTERNATIVES

Consumers decide which brand they want to buy based on the functional benefits, the
emotional benefits, or both. Function or performance benefits of the brand are important to
consumers, but they also choose particular brands because it can be used to express their
personality, social status, or affiliation or to fulfill their internal psychological needs, such
as the need for change or newness.

The consumer sees each product as a bundle of attributes with varying abilities to deliver
the benefits that the consumer is looking for to satisfy his need. The attributes of interest to
buyers that could influence the decision making in the satisfaction of need for coffee could
be the price, taste, location and ambience of the coffee outlet etc. After being in one
of Starbucks coffee houses, the customer will quickly notice the unique ambient that the
store offers. Starbucks comes out on top when it involves alternative evaluation most of
the time because of their unique "experience". Starbucks is able to build up human contact
through their employees. Those try to make the customer feel good about being
at Starbucks. This results in Starbucks being considered as a high premium brand.

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III. PURCHASE DECISION

The buyers of Starbucks products can be classified in two categories:

The Daily Commuter-someone traveling to or from work, out shopping, or delivering


goods or services.

The Captive Consumer-someone who is in a restricted environment that does not


allow convenient departure and return while searching for refreshment, or where
refreshment stands are an integral part of the environment

Starbucks offers coffee which is a low-involvement product. This means that consumer are
often engaged in a limited decision making process, or they may see coffee buying as an
impulse purchase or a routine purchase. Additionally, if consumers are loyal to a specific
brand, like Starbucks, they would tend to buy coffee without much information search or
evaluation of alternatives.

Starbucks is trying to get consumers to get more involved in the product in several ways:

Starbucks is marketed as a status item and so it is more high involvement (has more
economic, psychological, and social risk) than unbranded coffee or cheaper coffee from
Subway or McDonalds.

The company is using various campaigns, such as Bold Coffee campaign and the Via
taste challenge recently conducted in the UK to get consumers to come into the store
continually and try its products. This is a good use of buyer behavior theory, which
predicts that customers may switch brands just to try something new. By providing
customers with a new flavor to try each week, Starbucks actively manages customers

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natural inclination to try new things. And by emphasizing its socially responsible
behavior, Starbucks is also providing consumers with more benefits on which to
evaluate its products.

Starbucks customers purchase decisions are also influenced by factors like:

Apart from personal evaluation store consumers are able to get opinions from
friends, family or coworkers that can recommend Starbucks this is called the
routine primary membership group.

Secondary membership group which involves a bigger variety of recommendations


and opinions as it come to acquaintances that are not all that close such as clubs or
professional groups.

Starbucks focuses a lot in spreading out their companies name by word of mouth
just recently they have made commercial adds but what they mostly work for is to
be recommended to their product by someone consumers know. Or they can take
an opinion leaders and make advertising with them as Starbucks has taken a lot of
advantage from in being in big movies such as The Devil Wears Prada, 13 Going on
30 and Miss Congeniality. Seeing your favorite artist or actress sipping on a cup of
Starbucks beverage may give you the motive to go and get some yourself.

IV. POST PURCHASE EVALUATION


The consumers post-purchase evaluation process is an important step taken by
consumers to purchase a product at Starbucks since all the research and the
variation of products they offer can all be done in a store itself.

Starbucks gives a good motive for customers to return because if for any reason you
are unsatisfied with your drink you are offered another drink

The customers are even given a coupon for a free drink in case of dissatisfaction
with the first one.

The customer service in Starbucks is what makes the experience. The employees
make sure that the customer receives what they ask for in a personal way which
makes a customer feel like they are the only person Starbucks is attending to and
caring for. As Howard Schultz, CEO, stated, We arent in the coffee business, serving
people. We are in the people business, serving coffee." This tends to have a
favorable impact on the evaluation of customers purchase decision.

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DECISION MAKING UNIT/ROLES

Buyer These are generally responsible for purchasing function. They are also
responsible for sourcing and negotiation.

Influencer Influencers are those who may have a persuasive role in relation to
the deciders.

Decision Maker Decision makers are the one who are responsible for making
the final decision about buying the product or going ahead to avail the service.
The deciders review the information provided from lower down the buyer
decision process the buyers, original initiators, etc.

In case of a Business to Consumer Service like what Starbucks is offering, mostly all the
roles as per the Decision Making Unit are played by the same individual the final
consumer of the Coffee and related products.

In scenarios where people in a group are weighing the options of going for refreshment,
many a times, various roles (buyer, Influencer and Decision Maker) are played by
different entities. For example, friends who prompted an individual to go for Coffee are
acting like an Influencer. The final decision to go for the coffee and related products is
made by the Buyer itself.

Sources and Reference

1) http://natmar124.blogspot.in/2011/09/ch6-consumer-decision-making.html
2) http://www.slideshare.net/gauravthareja9/schiffman16ppt-best-pptdecision-making1
3) http://www.starbucks.in/about-us/company-information
4) http://www.marketingteacher.com/lesson-store/lesson-decision-making-unit.html

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