Starbucks Marketing Research


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Starbucks Marketing Research

  1. 2. <ul><li>1971 </li></ul><ul><ul><li>Starbucks opens its first store in Seattle’s Pike Place Market </li></ul></ul><ul><li>1998 </li></ul><ul><ul><li>At year end, Starbucks roughly grew 400% to a total of 4,700 stores. </li></ul></ul><ul><ul><li>2008 </li></ul></ul><ul><ul><li>Currently Starbucks owns 15,800 stores, Howard Schultz recently returns as CEO to slow store growth due to declining profits in the last few years to focus on customer experience. </li></ul></ul>
  2. 3. <ul><li>Overall Design </li></ul><ul><li>High end </li></ul><ul><li>Stronger Gourmet coffee </li></ul><ul><ul><li>Latte’s </li></ul></ul><ul><ul><li>Unique expresso drinks </li></ul></ul><ul><ul><li>Variety of Pastries and dessert </li></ul></ul><ul><li>Offerings </li></ul><ul><li>Seasonal products </li></ul><ul><ul><li>WINTER </li></ul></ul><ul><ul><li>Eggnog Latte’ </li></ul></ul><ul><ul><li>Gingersnap Latte’ </li></ul></ul><ul><ul><li>FALL </li></ul></ul><ul><ul><li>Pumpkin spice </li></ul></ul><ul><ul><li>FOOD: </li></ul></ul><ul><ul><li>pastries, muffins, No Bagels, Salads, sandwiches, </li></ul></ul><ul><ul><li>TO GO FRAPPACHINOS </li></ul></ul><ul><ul><ul><li>Double shot energy drink </li></ul></ul></ul><ul><ul><ul><li>Merge with retailers ex. CVS </li></ul></ul></ul>
  3. 4. <ul><li>FIRST IMPRESSIONS </li></ul><ul><ul><li>Warm, inviting, cozy, quaint, Earthy colors, Seasonal, </li></ul></ul><ul><ul><li>ATTITUDE OF EMPLOYEES </li></ul></ul><ul><ul><li>Knowledgeable, Cheerful, Understandable </li></ul></ul>
  4. 5. Research Problem and Questions <ul><li>Decision Problem </li></ul><ul><ul><li>Over 600 Starbucks stores have closed within the past 2 months </li></ul></ul><ul><li>Research Problem: </li></ul><ul><ul><li>Plausible cause is over-estimating location density </li></ul></ul><ul><li>Research Questions </li></ul><ul><ul><li>How do consumers perceive Starbucks in relation to competitors? </li></ul></ul><ul><ul><li>Are they aware of Starbucks? </li></ul></ul><ul><ul><li>How loyal are Starbucks customers? </li></ul></ul><ul><ul><li>What do consumers value most when purchasing coffee? </li></ul></ul><ul><ul><li>How important is customer service? </li></ul></ul><ul><ul><li>Does convenience matter? </li></ul></ul><ul><ul><li>Is the atmosphere at Starbucks valued? </li></ul></ul>
  5. 6. Research Design <ul><li>Focus group Study </li></ul><ul><ul><li>Informal non-structured discussion among real consumers </li></ul></ul><ul><ul><li>“ Starbucks is a wonderful place although it can get a bit expensive” </li></ul></ul><ul><ul><li>Dunkin Donuts has huge competitive advantage over Starbucks with their “BETTER FOOD” </li></ul></ul><ul><ul><li>Customers were annoyed by the fact that Starbucks is almost on every block in the city </li></ul></ul><ul><li>Depth- Interviews (5) </li></ul><ul><ul><ul><li>Consensus of most important aspects that re-occurred. </li></ul></ul></ul><ul><ul><ul><li>Word Association </li></ul></ul></ul><ul><ul><ul><li>Sentence Completion </li></ul></ul></ul><ul><ul><ul><li>Escalade = Car </li></ul></ul></ul><ul><ul><ul><li>Not price sensitive </li></ul></ul></ul><ul><ul><ul><li>If you had to eat in the morning would you have a Danish or Sausage and eggs? </li></ul></ul></ul>
  6. 7. Problem Audit <ul><li>Starbucks locations may be too close to each other causing cannibalism. </li></ul><ul><li>Some customers do not like the fact of making their own coffee to taste just right. </li></ul><ul><li>Price is also more expensive than other competitive coffee shops </li></ul><ul><li>Food at Starbucks is generally very snack-like </li></ul><ul><ul><li>Ex . Pastries, Danish, muffins </li></ul></ul><ul><ul><li>As opposed to competitive coffee shops such as Dunkin Donuts who offer Sausage and Egg Sandwiches . </li></ul></ul>
  7. 8. Secondary Data <ul><li>We used secondary data at the beginning of the project as exploratory research design. We gathered information on Starbucks to use in the development of a research problem. Secondary data is very useful for many applications. It is relatively easy, inexpensive and much data is available. We knew as a group we wanted to do something related to SB and how they seemed to be doing so poorly as we have seen in the news. After a week of secondary data, discussing with the group, we decided on a research problem to base our depth interviews, surveys on. </li></ul>
  8. 9. Con’t <ul><li>The findings helped us further modify the research problem and see what other researchers on the topic conducted. We took aspects of our data design and refined our research problem and survey questions from secondary data. </li></ul><ul><li>Without secondary research, we would have had to conduct primary data, gathering information specifically for the research project and would be unaware if the research has already been done on the topic . </li></ul>
  9. 10. <ul><li>Starbucks Coffee Company Full List of U.S. Store Closures </li></ul><ul><li>www. </li></ul><ul><li>Data such as this helped to segment where closings coming from and if there was a trend and so on. </li></ul><ul><ul><li>On July 1, 2008, Starbucks Corp. announced it is closing 600 company operated stores in the next year, due to the US economies downward spiral, that had hastened the pain caused by the companies own rapid expansion . </li></ul></ul>Con’t
  10. 11. <ul><li>Starbucks closing 5 percent of U.S. stores </li></ul><ul><li>As many as 12,000 Starbucks workers will lose their jobs when the company begins closing 600 U.S. stores this summer. </li></ul><ul><li>Article from the Seattle times  </li></ul><ul><li>As many as 12,000 Starbucks workers will lose their jobs when the company begins closing 600 U.S. stores this summer. </li></ul><ul><li>The Seattle coffee company is cutting 5 percent of its U.S. locations as part of a wide ranging effort to boost its bottom line and its stock price. The chain is accelerating international growth. </li></ul>
  11. 12. Data Collection <ul><li>Questionnaire </li></ul><ul><li>Quantitative and Qualitative </li></ul><ul><li>Sample size </li></ul><ul><li>100 participants took the survey </li></ul><ul><li>Customers view </li></ul><ul><li>Starbucks vs. Dunkin Donu ts </li></ul>
  12. 13. Data collection cont ’ <ul><li>Location matter </li></ul><ul><li>Customers who live in the suburbs are satisfied with Starbucks </li></ul><ul><li>and most of the customers who live in the city is unsatisfied. </li></ul><ul><li>Product satisfaction </li></ul><ul><li>55% of respondents had positive feelings about their </li></ul><ul><li>coffee whereas 44% had negative and neutral feelings . </li></ul><ul><li>Location </li></ul><ul><li>We chose the Starbucks in the Boston area for it’s convenience </li></ul>
  13. 14. Ho: µ =average quality of customer service ≤ somewhat unsatisfactory Ha: µ = average quality of customer service >some what unsatisfactory
  14. 15. The number of cases in the dataset is recorded under the column labeled N ... The average satisfaction of last visit to a starbucks coffee shop is contained in the Mean column. Variability can be assessed by examining the values in the Std. Deviation column. The more that individual data points differ from the mean, the larger the standard deviation will be. WE REJECT THE HYPOTHESIS (95% INTERVAL, 0.00 SIG. LEVEL,
  15. 16. How satisfying is Starbucks Coffee? Frequency distribution Analyze menu: analyze->descriptive statistics->Frequencies
  16. 17. Based on your experience how does Starbucks coffee compare with Dunkin Donuts coffee in terms of taste?
  17. 18. Paired-Samples T test Starbucks coffee shops are too close to each other vs. Café’s from best(1) to worst(6)
  18. 19. Ho: µ =relation between living settings and store location H a µ= in relation between living settings and store location INDEPENDENT SAMPLE TEST small value (<.05) in the column labeled Sig . indicates that this hypothesis is false and that the groups do indeed have unequal variances. In the above case, the value <.05 in that column indicates that the variance of the two groups, rural and city, is not equal.
  19. 20. Concept Corrections <ul><li>Adapt to the current situation </li></ul><ul><ul><ul><li>More knowledgeable customers (expectations) </li></ul></ul></ul><ul><li>Close inefficient locals and invest on perfect concepts. (fewer but better ) </li></ul><ul><ul><ul><li>Big, comfortable exact stores in good locations. </li></ul></ul></ul><ul><li>Improve Customer Service. </li></ul><ul><ul><ul><li>Training, capacitating, retaining </li></ul></ul></ul><ul><li>Improve Price/ Quality Satisfaction. </li></ul><ul><ul><ul><li>New blends, types, and qualities </li></ul></ul></ul>
  20. 21. Hitting the Competition <ul><li>Marketing& Advertising </li></ul><ul><ul><li>Use influential people (actors, connoisseurs, people with credibility) </li></ul></ul><ul><li>Educating </li></ul><ul><ul><li>Teaching the consumer about the products (quality, attributes, comparisons) </li></ul></ul><ul><li>Concept innovation: sub-brand </li></ul><ul><ul><li>Starbucks Express: on the go, Dunkin Donuts Concept . </li></ul></ul>