Starbucks paper

Starbucks: Consumer Behavior Analysis
Richard P. Deja
Mason C. VanDyne
Cody J. Zahm
Zoe S. Loridas
Aquinas College

Abstract
The purpose of our research was to observe and collect data concerning what made up the
mass population of Starbucks consumers within the Grand Rapids area. These areas of interest
included: Gas Light Village, 28th Street Woodland Mall, Northland DR. NE, and Knapp Street.
Data was collected by two different methods; observation and questioning. Subjects of
observation included: age and gender of the consumer, what they purchased, and whether they
stayed or left after their purchase. Subjects of questioning came from members of the Starbucks
staff if manager or team leader was not present. Based off a sample size of 300 and four
interviews with Starbuck staff members, our data determined that most Starbucks consumers are
females between the ages of 21-39 that prefer specialty coffees, and leave after making their
purchases. Future research should be focused on how to better serve these group of customers
within their geographical areas.
Overview of the of the methods used. How did you ensure quality data was observed?
To ensure that we had the most accurate forms of data we came up with using
observation, Q&A style, and research to gather all the information needed. With observation we
each choose a separate Starbucks to conduct our analysis. Each having a spread sheet that
entailed the same content; different ages, gender, coffee/tea drinks, times, and whether or not the
individual would sit or leave after being served. As a customer walked in we would mark off if
they looked around the ages of 10-20, 21-39, or 40+. Then we would identify male or female,
and go on to listen to their order, marking if it was a tea, coffee, or latte. Along with the coffee
they bought we would observe if anyone had bought a complimentary item along with it. Due to
the many different types of drinks lattes were part of a broad spectrum or quintessential ‘latte’,
frappuccino, and mocha. Then we would mark the time period in which they had entered and
finally watch to see if they would sit or leave after getting their desired items.
We decided to take it a step further and come up with a list of seven questions to ask the
manager on duty at the time that we had been observing. The questions included; What is the
most popular beverage outside of “Holiday” drinks? How many people do you approximately
serve each day? How many people purchase a drink get a complementary good? During the
lunch hours, what is the average age that comes in? What is the busiest time? What are the
consumer demographics based off age and gender? And what’s the most popular time of year?

We think this helped our understanding of the differences that can occur in what we saw from
the short period of time we were there to what usually goes on every day. The last tactic we used
was research into any other aspect of the company that could help us along the way.
Data captured and analyze

We also asked questions to the store manager they were able to give us a rough estimate
and their own common knowledge to what the answers entailed. These managers included; Sarah
(Gaslight), Sean (Northland), Andrea (Knapp Meijer), Kelly (Woodland Mall). The following is
the question and answers that we received. What is the most popular beverage outside of
“Holiday” drinks? We had three answers for Caramel Macchiato (Andrea, Sean, Sarah), one
answer for Mocha Latte (Kelly). How many people do you approximately serve each day? The
numbers ranged from 600 to 700 at two of the establishments (Sarah and Andrea) with the other
two getting over nearly 1,000 customers each day (Kelly and Sean). How many people purchase
a drink get a complementary good? While three of the Starbucks had 5-10% of the customers
buying complimentary (Sean, Andrea, Kelly), while Gaslight had an astonishing 40% (Sarah).
During the lunch hours, what is the average age that comes in?
Since the East Grand Rapids is right by a high school with open lunch their main
customer at that hour is teens in high school (Sarah). The other three locations say that their main
customers are from the ages of 21-39 (Sean, Andrea, Kelly). What is the busiest time? In all four
locations stated that the mornings are the busiest time for them (Sean, Andrea, Kelly, Sarah).
What are the consumer demographics based off age and gender? While Gaslight said that middle
aged men and high schoolers were their main customers (Sarah), the other three said both middle
class women were their customers ranging from 20-45 (Sean, Andrea, Kelly). And what’s the
most popular time of year? It was a unanimous vote for the holiday time being the busiest time of
the year, along with the most wonderful (Sean, Andrea, Kelly, Sarah).

Sarah. Gaslight Village, Grand Rapids.
Kelly. Woodland Mall, Grand Rapids.
Sean. Northland, Grand Rapids.
Andrea. Knapp Meijer, Grand Rapids.
What type of consumer behavior is being demonstrated?
The consumer buying behavior is considered high product involvement. This means
consumer feels that the product values are linked to the end results and values (Chand S.). The
main consumer behavior that we mainly observed was females between the ages of 21 and 39
who want their coffee fast and efficiently. They want a service that it is easy for them to grab and
go, and get on with their day. We were surprised though by the amount of women that came in
and left that had children with them. The quintessential ‘soccer mom’ that is always on the run.
It’s fast and it’s easy for them to go in, get their coffee and run out with a bunch of kids with
them. We also observed a lot of college students who came in to sit down with a coffee and a
complementary good and study for hours, sometimes going back for more coffee when they were
out. It’s a nice environment for them to sit and get work done, while having food and drink in
their reach. Another behavior that we saw was the older crowd seemed to come in for the
convenience of where the store is located. For instance they went shopping in Woodland and the
Starbucks was right there in the middle of the mall so they decided to stop and get a coffee.
Again it’s fast for them to get in and get out.
Who was your targeted consumer and why?
While researching Starbucks’ target audience, a person must look deeper into Starbucks
is offering. While researching, I came to find that the main target audience is people of a higher
income bracket who have a strong awareness of social status. The reason Starbucks picked this
as their main target audience is because people with lower income statuses usually won’t spend
money on higher end coffees. The people who spend money on Starbucks coffee are people who
can afford more than just a caffeine buzz. The people that Starbucks really tries to attract is the
person who looks at a Starbucks Coffee and says “This is a way to show people who I am”. The
brand of Starbucks is known as a high end coffee. People look at Starbucks the same way they
may look at a luxury car. Starbucks has reinforced that feeling by having La Boulange (San

Francisco) make all of their baked goods. This helps keep the upscale feel of the company, while
also adding some delicious items to the menu.
The second major target audience that Starbucks looks for is young females. Starbucks
realizes that we are in a time period where they are the cool place to go. Because of this they
have started to add products and promotions that really set the hook. Starbucks has been adding a
lot of low calorie drinks that typically attract young women. While young women is a major
target, Starbucks is also starting to market to young families in general. You can see this in their
products like fruit squeezes and vanilla milk.
What questions need to be askedbefore a theory can be developed development or
problem/opportunity identified? Explain why?
We believe that the first question that must be asked is “Do we have enough data
collected to ensure that our data is accurate”. The reason we believe this question must be asked
is to ensure that we don’t spend money trying to advertise to a certain consumer, and have it not
be targeted correctly. For example, looking at our data we found that people are much more
likely to leave the establishment than stay. If we look at that and decided to run a campaign to
entice people to stay in the café we could maybe make more money from each customer based
off from them wanting a refill, or just a complimentary item. This campaign could be something
that is very successful, however if our data is incorrect we could lose the company a lot of
money on this venture.
One other question we believe should be asked is “Was there any variables that could
have changed the outcome of the research”. One important aspect of any marketing campaign is
to realize what the real problem is. In this regard we believe that every possible variable must be
accounted for before coming to a conclusion on a theory, problem, or opportunity.
What type of business strategies would you employ to reinforce or change the
demonstrated consumer behavior and why?
The current Starbucks customer is a loyal customer but their average purchase per
customer is not where we would like to be. Our average purchase per customer hovers around
$7.50. (Shah, 201) We believe that with a few tweaks we can get it up to $9.00. Our average
customer is on the go and is headed somewhere to do something. We want to create an

environment where they can take a break from the hustle and bustle and relax for a minute or
two. The first step is to create larger store fronts in the larger and more popular areas. This will
allow you the space to accommodate for more people bringing your average money per visit up.
Another business strategy would be to re-energize on the experience for those that stay. People
will often meet at Starbucks to conduct an interview or to conduct business. Starbucks could
create meeting areas where it will block out a good deal of the noise and people. Another idea of
personalizing the experience would be to do a “happy hour” type experience with a local band.
Getting people to come in and sit down while getting them to stay longer will increase their total
purchase per visit.
Basedon your observation of these consumers, what other compatible products or services
would you recommend or consider for these consumers? Why?
For Starbucks stores to be more successful in the greater Grand Rapids area, Starbucks
needs to focus on the requirements of their majority consumers. Both males and females between
the ages 26 to 40+ require products and services that allow them to get in out fast. These
consumers have busy work or family lives. The Starbucks phone app and drive-thru help with
this problem, but in busier inner cities, more drive-thru’s would be more economical. Younger
males and females between the ages of 16 to 25 require more space and more secluded rooms for
studying and homework. We suggest expanding the lounge space and possibly adding study
rooms for these consumers. This would allow Starbucks to get consumers to stay longer and buy
more complementary goods. Starbucks would also benefit from utilizing the space that they
already have for store merchandise. Allowing more merchandise to be displayed would lead to
more merchandise sold, if Starbucks shows how their merchandise can better fulfill the
consumer’s needs.
What business strategies might you consider to get them to purchase compatible products
identified.
Starbucks should implement a growth strategy for the design and structure of their stores,
and the services they provide (Suttle). As stated before, Starbucks could grab a hold of the
younger male and female college or high school students by having more available room for
homework and study activities. This group of consumers are also more likely to buy

complementary goods that the others, and the longer these individuals stay in the store, the more
likely they will buy complementary goods. Those older males and females with busy family and
work lives would benefit from a Starbucks delivery system. Starbucks already has an innovative
app for making online orders, so the next logical step should be delivery. These customers would
not have to deal with the traffic or lines at Starbucks stores. Instead their coffee could be
delivered to the consumer at home or at work.
Starbucks could also expand on their green marketing campaign by linking their
Starbucks thermoses with their in-store coffee products. Starbucks could offer a happy hour a
few times a week for those customers that have or buy a Starbucks thermos. There would have to
be small price cuts on both the thermoses and the coffee to bring in the max amount of regular
and new customers(Suttle). Starbucks when benefit for trying to go more green by throwing
away less coffee cups, and would sell more coffee and thermoses at the same time.
What surprised you and what did not? What would your team do differently?
As a whole, we really were not surprised as much as to who demographically was going
to be going to Starbucks and the drinks that were to be ordered. What we were surprised at was
the fact that the complementary goods that were sold was a very low percentage. Going in we
expected the complementary goods, such as baked goods, to be a bigger percentile than what we
retrieved in our data. Another surprise that we saw was a lot of families coming in and everyone
getting a coffee or latte.
To do something differently, as stated above, we would want to have a larger data pool
collected which would take a longer period of time. With this larger pool of data we would
possibly get a more accurate collection of data. Also if we were not doing it during the holiday
months that might make the latte count decrease due to the fact that they are accumulating the
most drinks that we have collected. Which might make the tea and the coffee counts increase.
Learnings (was this easy or hard? What challenges did you incur and why?) Must be tied
back to the chapters in the text on types of consumer behavior.
As a group, we had a few challenges. We had a hard time separating what information
was important, and what information was not important to our research. We debated on the use
of case studies and articles to complement our findings, but we couldn’t find any relevant

information concerning our results. Many of us had a hard time gathering accurate data because
of how busy the stores were. Whether because we couldn't hear some of the orders or we lost
track of orders. Other challenges included; not gathering information from drive through
customers, setting up interviews with managers, and unable to find a large sample size in the
evening shifts due.
From a limitation standpoint, we also had a hard time finding out important information
about Starbucks consumers just through observation. For example, we could not accurately state
these consumer’s income class, market segmentation, buying influences, or family life cycle
without writing a consumer questionnaire. Time restrictions made it impossible to create and
distribute a consumer questionnaire with such a sample size.

Reference Page
Andrea, Personal Communication, November 13, 2016
Chand, S. (n.d.). Consumer Buying Behaviours: 4 Important Types of Consumer Buying
Behaviours. In Your Article Library. Retrieved November 14, 2016, from
http://www.yourarticlelibrary.com/consumers/consumer-buying-behaviours-4-important-types-
of-consumer-buying-behaviours/22153/
Suttle, R. (n.d.). In Different Types of Business Strategies. Retrieved from
http://smallbusiness.chron.com/different-types-business-strategies-4634.html
Sarah, Personal Communication, November 10, 2016
Sean, Personal Communication, November 9, 2016
Shah, Khushbu. "Starbucks or Dunkin' Donuts? Where America's Coffee Loyalty Lies."
Eater. N.p., 15 Jan. 2015. Web. 9 Nov. 2016.
“What is the Target Market for Starbucks.” Retrieved November 11, 2016,
https://www.reference.com/business-finance/target-market-starbucks-d8d3a765c9191aa8
Kelly, Personal Communication, November 11, 2016
“What is the Target Market for Starbucks.” Retrieved November 11, 2016,
https://www.reference.com/business-finance/target-market-starbucks-
d8d3a765c9191aa8

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