The document analyzes Starbucks' strategy to attract more Italian coffee drinkers in Milan. Descriptive statistics on a questionnaire sample show it adequately represents the city population. Italians prefer espresso/macchiato made with moka/machine and high quality coffee. They typically drink coffee at bars or home. Starbucks is seen as less traditional, expensive, and aimed at youth compared to Italian bars. To target non-loyal bar goers, Starbucks should offer new coffee varieties and collaborate with Italian brands. Focused marketing through recommendations, online reviews, and social media may help attract Italians.

1. Starbucks
Giuseppe Giadone
Francesco Donelli
Nicola Bombini
Fabrizio Lanubile
Data Driven Strategy course (UCSC)
A.A. 2021-22

2. Definition of the problem
In our analysis, we will use descrptive statistics and cluster analysis tools in order to find a
solution to get Starbucks brand closer to italians, making it a reference place for habitual
coffee consumption, not just a place for teenagers and tourists, extending its customer
base in the process.
The data we will use are based on real life questionaries provided to inhabitants of the city
of Milan

3. Sample
description

4. Age distribution in the sample
46-55
33%
36-45
28.8%
26-35
24.7%
19-25
13.5%
Sample
46-55
34%
36-45
29.7%
26-35
23.1%
19-25
13.2%
Reality (city of Milan)
Age is well distributed in
the sample compared to
reality

5. Gender analysis
Males
51.1%
Females
48.9%
Sample
Males
50.5%
Females
49.5%
Reality (city of Milan)
Gender
distribution is
almost the same
as in reality

6. Distribution in relative terms
(age and gender)
Reality (city of Milan)
Sample
Summing up, the
sample represents
very well the real
population according
both to gender and
age

7. Instruction and occupation
Sample
Work
72.5%
Study
24.6%
Retired
2.8%
Work
68.2%
Study
22.9%
Retired
8.9%
Reality
Retired people are a little under represented, but
that shouldn't cause big issues for our case study
because they are a marginal target for us
University
71.6%
High school
26%
Middle school
2.3%
Sample
Since the questionaries were provided to people with
at least 19 years of age for business purposes, the
main part of the sample is made up of students from
universities and last year of high school

8. Lifestyle
Our main target are people that classify themself as open minded , so that they can easily change
their perception of Starbucks brand, and abitual so that can become loyal to the brand.
The distribution of open mindness is mostly skewed to the right, with high frequency of score between 8
and 10, while abitual has a more uniform distribution.
1 2 3 4 5 6 7 8 9 10
75
50
25
0
Open Mindness
Frequency
Score
1 2 3 4 5 6 7 8 9 10
40
30
20
10
0
Abitual
Frequency
Score

9. Comments about Sample
The sample we work with is very reliable from a demographical perspective, as we
would expect from the way it has been constructed. Only demographical issue could be
a little under representation of retired people, but that doesn't seem very relevant for
our case study. Moreover, people interviewed in the survey have the good prorperty of
open mindness, but aren't much abitual, so it may be difficult to retain their loyalty to
starbucks. Overall the sample seems to have the right characteristics to lead our
analysis to meaningful results.

10. Coffee
consumption
habits

11. Coffee factors
Quality of coffee and type of preparation are the two most important aspects regarding coffee consumption
for Italians. You can see from the histograms that the distribution of the score for these two factors is
skewed to the right, meaning that both categories get high scores from the majority of the sample
1 2 3 4 5 6 7 8 9 10
80
60
40
20
0
1 2 3 4 5 6 7 8 9 10
60
40
20
0
Frequency
Quality
Score Score
Frequency
Type of preparation

12. Location habits
Only one person in our sample has Starbucks as a main
destination to drink coffee, so we have to understand the
main differences with more popular places to drink coffee
like bars.
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13. Q10 P-value Eta squared
Bar/Relax 0.146855 0.009854
Bar/Energy 0.827499 0.000223
Bar/Socialize 0.571038 0.00718
Bar/Habit 0.033140 0.021131
Bar/Culture 0.139649 0.010215
Bar/Break 0.282563 0.005364
Why people go to bar?
We performed a bivariate analysis to understand if there
is a specific reason why so many people usually go to bar
compared to other places. You can find on the left the
table that summarizes the results of p-value and eta
squared. There is no particular reason why people attend
bars instead of other places based on these factors, since
the mean score doesn't change in a statistically significant
way.
The only exception is habit, for which we have a p-value
<0.05, but we have a value of eta squared lower than our
threshold of 0.02 so the difference in mean is not strong
enough
η2> 0 ⇒dependence on mean if η2>0.04 or η>0.2

14. Why stay home?
Q10 P-value
Eta
squared
Home/Relax 0.104 0.0731
Home/Energy 0.041 0.0081
Home/Socialize 0.405 0.0044
Home/Habit 0.274 0.0527
Home/Culture 0.320 0.0498
Home/Break 0.704 0.0036
η2> 0 ⇒dependence on mean if η2>0.04 or η>0.2
In this case, even if we reject H0 only in one case, for the
Energy factor, n^2 exceeds our threshold of 0.04 in three
case, so there are various reasons why people in our
sample drink coffe at home

15. Espresso
54.3%
Macchiato
24.8%
Cappuccino
16.8%
Marocchino
4%
Type of coffee
Moka
46.9%
Machine
43.4%
No coffee
5.9%
Instant
3.9%
Preparation
Italians really enjoy traditional, high quality coffee preprared with Moka, mainly of Espresso type, offered by bars or drank at home
Italians' preferences

16. Final insights
Coffe consumption habits
Factors to target
Type of coffee
Preparation
Quality
There are three main factors that are key for italian
coffee drinkes:
italians prefer Espresso or Macchiato coffee,
preparared with moka or machine. Quality of coffee
is also key for italian coffee drinkers, they love
coffee of good quality
What NOT to focus on
From the attributes we had at our disposal, there
is no statistical evidence that people decide to
drink coffee at bar because of any of these factors
but habit, whereas there is no a statistical
evidence for people who drink coffee at home
regarding break,energy and socialize.

17. Italian Bars vs
Starbucks

18. Value curves: Starbucks vs Bar
Traditional Italian Bars Starbucks
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Compared to its main
competitors (traditional
italian bars) Starbucks is
considered a less
traditional and expensive
solution, primarily aimed
at young people. The
quality of the service
should also be improved
to gain more clients.

19. Bar habits
Our main target is made up of the
ones who don't have a single
trustworthy bar, because are very
hard to aim at, and the ones who
prefer Italian bars
63% of the people have no
fixed bar/no preference, so
they will be easier to target
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Do you have a trustworthy bar?
Percentage

20. Factors to target
We decided to analyze what are the main factors
that can change the idea of the main targets
highlighted in the previous slide. Here we see the
factors that could move the mind of people that go
not to just 1 bar, but 2 or 3
Loyal, but not too much
There are 2 main factors that stand out
and that we can force to improve our
customer base:
new coffee offers and comfortable
seats
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21. Factors to target
We repeated the analysis for
our other main target, the ones
who like to experiment more
places
I like to change
Here we have 3 factors upon which we
have to enforce our strategy:
Collaboration with Italian brands
Famous people advices
Higher media visibility
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Percentage

22. Channels
Famous people advices
Higher media visibility
Collaboration with Italian brands
Which are by chance also the 3
favorite factors of the 'I like to
change' category
2 person out of 3 would try a new bar
according to one of these categories: It's then clear that the choice of the
channels in our marketing campaign is
crucial to increase our customer base.
We should try to get to people through
these 3 channels, since are the most
effective on our target.

23. Channels
We tried to understand what are the
channels that would make people that
pay attention to at least 1 of the 3
factors listed in the previous slide
change their mind
How to reach the target?
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Percentage

24. Channels
Channels to target Channels NOT
to target
TV ads
Discounts
Recommendations from
close people
Online reviews
Social media
In conclusion, the channels to focus on for a marketing
campaign in order to reach the target of our analysis are are:
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Percentage

25. Italian bars vs Starbucks
Final insights
Factors to target
New coffee offers + collaboration with italian brands
Offers of Italian varieties of coffee with popular brands
Starbucks should produce more traditional and high quality
coffee, if it wants to compete with italian bars to gain faithful
clients.
We identified 2 categories of potential new customers to target,
but there is no common factor among the preferred ones of the
2 categories. It can, however, be found a compromise:
Then, considering the higher proportion of the 'Loyal, but not
so much' category, another important factor to target could be
the other preferred from them, comfortable locations.
Factors NOT to target
Merchandising, always last among the preferred
factors
Music and Wi-Fi, always second-last
The clearest insight from this analysis is that there
are factors not to target at all, cause nearly all
people don't really care about. These are:

26. Italian bars vs Starbucks
Final insights
What to focus on What NOT to focus on
It's clear that what matter most to people are
online channels, given that the factors that are
most important for their judgements are online
reviews and social media. Uniting these with the
most important factor detected,
recommendations from close people, it'clear that
the main channel that we have to target is social
media, which collects itself the other 2, cause
gives place to online reviews, and is a vector of
the thoughts expressed by people we know
Another fact that highlights the need to focus on
online channels, is the fact that the 3 out of the 4
less important channels for our customers are all
offline vehicles, hence there is no need of
investment there. Moreover, another secondary
factor in our case are discounts, which is the
second-last channel

27. Experience at
Starbucks

28. Why customers are not loyal?
Half of the sample has been at least once in a Starbucks in
Milano, but just one person became a regular
This is a clear problem, hence it's useful to analyze what went
wrong in their experience
Looking through the answers to the questionnaire,
we found 3 factors that can surely be improved
The following scores refers to Starbucks experience, with a
low score representing insatisfaction about the specific factor

29. About price
Price The price is indeed a major
problem, since Starbucks offer
is not cheap
More than one half of the
interviewed rates the price
between 1 and 4
Just 7% values it more than 8
This is a clear gap to overcome
with traditional bars, which
have a far cheaper offer
1 2 3 4 5 6 7 8 9 10
0,25
0,2
0,15
0,1
0,05
0
Percentage
Score

30. About noise
64% of the people rates the
noise in the bars 5 or less
Noise
Given that one of the main
offers of Starbucks is giving a
comfortable place to study or
work, the level of noise at bars
is surely a target we have to
reach
1 2 3 4 5 6 7 8 9 10
0,2
0,15
0,1
0,05
0
Score
Percentage

31. About crowding
Crowding
Another problem connected to
the previous one, is crowding
57% of the interviewed rate it 5
or less
These are very similar data to
the noise problem, which is
natural because they are
connected
These 2 problems are quite comprehensible
even because Starbucks is a very powerful
brand, but the bars in Milan are still not
enough to satisfy all the costumer base
1 2 3 4 5 6 7 8 9 10
0,2
0,15
0,1
0,05
0
Percentage
Score

32. Experience at Starbucks
Final insights
Price
Noise and crowiding, that are related
The problems with the Starbucks experience are evidently
polarized in 2 macrocategories
It's clear that the Italian customer isn't used to spending that
much for coffee, since it is seen as maybe the cheapest product
available in a bar, given the medium price that stands at about
1€, hence the offer surely has to be reviewed. Regarding crowd
and noise, given that Starbucks has basically just arrived in Italy,
it's quite natural that there are problems with this, since it is in a
phase of expansion in the italian market. This problem should be
naturally solved in the future with the opening of new shops.
Factors to target

33. Cluster Analysis

34. Cluster analysis
9_1 (Tasty and quality)
9_2 (Price)
9_3 (bar setting)
9_4 (the way of doing)
9_5 (Origin)
9_6 ( Eco-friendly)
Variables involved
10_1 (Realxing)
10_2 (Energy)
10_3 (Socialize)
10_4 (Take a break)
10_5 (Habit)
10_6 (Italian culture)

35. Cluster analysis
In the first cluster subset we have the main portion
of the observations followed by the third and the
second one. The standard deviation is low in the first
subset with respect to the others.

36. Cluster analysis
From the values of the mean of each factor for each
cluster, we can delineate 3 clear categories:
In the first cluster we can see people that care pretty much about all the factors
In the second cluster we can see people that seem to care mainly just about
quality, but way less then the other groups about other factors
In the third cluster there are again people who care about quality mostly, but at
the same time they don't forget about the other things
1.
2.
3.

37. Cluster analysis
Cluster Description
High-quality and Tradition
It is a customer refined. As in all the other
clusters, the customers are deeply linked to the
quality. The italian culture and the way of doing
are very important leading to a willingness to
pay very high.
Take-Break
58,14% 27,91%
It represents the type of customer whose although
quality matters sees coffee as daily break from the
busy life of the day. Nothing else matters
The latter type of customer likes the bar environment and
thus also likes the sociability. Coffee is understood as an
energy-giving drink while always bewared to the process of
preparation.
Tasty energy
19,95%

38. Conclusions

39. To gain fidelty of italian clients, first step for Starbucks should be focusing on preparation of Espresso and
Macchiato coffee, prepared mainly with moka or machine, to improve quality of the product and offer coffee
with the best traits in italians customers preferencies. Starbucks, in fact, basically has no tradition when it
comes to quality coffee preparation and is not considered a high-quality brand in italian's view. Price,
moreover, according to consumers does not reflect the quality of coffee. Starbucks should focus on coffee
quality and tradition by creating a storytelling around its new, high quality coffee. Their marketing campaign
should also focus on attracting more middle aged and over 40 people, beacuse Starbucks in the common
view is seen as a place for younger people, while abitual italian coffee drinkers are generally older.
Conclusions
To reach the target we identified in "Italian bars vs Starbucks" section, the marketing campaign should be focused on
collaboration with italian brands and promote new coffee offers along the tradional Espresso and Macchiato. We can
think Espresso and Macchiato as the core of the new offer, accompanied by more peculiar and slightly expensive
solutions to integrate the offer.The marketing campaign should be conveyed through online channels, both online review
and social media, with the latter that plays the most important role according to the results of our analysis.

40. Conclusions
Starbucks should focus on lowering the price, as we demonstrated in the analysis of
"Experience at Starbucks" . Conquering the appropriate target audience for the offering
will help increase revenues and subsequently increase outlets. The creation of new stores
will spread the clients in a more balanced way and this should solve the problem of over-
crowding and excessive noise that italian clients associate to Starbucks.
Cluster analysis shows that there are three types of customers. Starbucks should be able to
reach the first subset of customers (High-quality and Tradition) both because they are willing
to pay more (having attached low weight to price) and because they are subject to stronger
loyalty (the habit of going to the coffee shop is important to them). However, it is the most
difficult to reach since it is strongly linked to Italian coffee culture and they would see
Starbucks as a foreigner coming to Italy to try to replicate Italian coffee.
Finally, if Starbucks implemented advertising campaigns to promote the origin and eco-
sustainability of its products, it would also reach other customers who, although they have
different characteristics, are still linked to tradition and quality.