Role of Marketing in a Consumer Society - Essay Example

?Role of Marketing in a Consumer Society Table of Contents Table of Contents 2 0 Overview 3 3.0 Broader Marketing Environment 8 4.0 Theories of Consumer Society 10 References 14 Bibliography 17 1.0 Overview Starbucks developed from a small local business into the acknowledged strong leader in the industry of specialty coffee as they buy only the superior quality coffee and provide an authentic store experience to consumers. The coffee buyers of the company had long-lasting relationships with farmers and paid the highest prices for top-quality beans in the industry (Tuck School of Business at Dartmouth n.d.). The development of brand Starbucks is due to the unmatched coffee shop atmosphere provided which attracts the consumers to the place. The growth of Starbucks is also based on their sound management as well as effective operations (Reference for Business 2011). Starbucks developed a strategy to open only company?owned stores and avoid franchising. This strategy facilitates the company to keep full control of its excellent products and services. Starbucks strived to control more of its supply chain with the purpose of maintaining high quality of coffee high with consistent levels by working with growers and upholding the standard of coffee. These two strategies facilitate Starbucks to distribute the first part of its value proposition as well as quality (Marangos n.d.). In this paper, the role of marketing in consumer society will be described properly with reference to Starbucks. The company developed various strategies and marketing techniques while operating in consumer market. Various strategies were adopted to satisfy customers with delicious coffee drink. The company operates in broad marketing environment, which has been explained by taking into consideration various factors related to the environmental issues. The theory of consumer society had also been discussed by analyzing the satisfaction level of consumers. 2.0 Marketing Techniques and Strategies From the case study it has been observed that Starbucks has developed expansion and growth strategies in order to make expansion of their brand or products. The marketing strategy of Starbucks is totally unique and different from others. They have adopted the strategy based on various factors such as expansion of business in favorable areas with suitable demographic profile in order to support and render service to them. This strategy was developed based on the growing reputation of Starbucks brand (CalaRos Bay 2004). Various small business firms at the outset face the issue of expansion or growth of their business. Thus, based on these two concepts, expansion as well as growth strategies have been adopted. Business expansion is a stage of a life of the company in consumer society and business growth is the increase in financial fortunes for employees along with owners. Expansion strategy is developed with a view to validate the initial business start up idea of entrepreneur and the subsequent efforts of fulfilling the vision into success. Growth strategy means that the variety of changes will take place in the company’s business market. Growth causes challenge in managerial legal and financial aspects. This strategy will enable to raise the market share of company and large number of competitors in the market (Reference for Business 2011). The rapid store expansion strategy of Starbucks is domestic store expansion along with international store expansion. The other strategies are employee training in addition to recognition, where recruitment, hiring and training methods for baristas and store managers are included. They also provide screening, training programs and awards for partners. The other strategies are real estate group, store development group and retail operation group, planning as well as construction. For providing facilities to consumers as well as employees, several strategies are developed such as a broad range of store formats, a “stores of the future” project team, high traffic and high visibility of the location of stores, store opening cost that is controlled and accessibility of Wi-Fi at their stores (Nugroho 2006). In Starbucks' international strategy, it forms joint ventures or licenses with other companies in order to hold and operate Starbucks stores which are different from its domestic approach, where the stores are largely company-owned (Global Exchange 2003). The strategy for international store expansion is company-owned as well as company-operated stores or licensing; a new subsidiary was formed as ‘Starbucks Coffee International’ and in South Pacific region consumer product was expanded as well (Nugroho 2006). Starbucks believe in in-store experience and creating loyalty of consumer from their brand or products. They want that customers should experience their coffee house and coffee drinks and in this way they follow marketing of products and brands. They prefer to offer customers with their products of coffee or tea. They also have a preference for word-of-mouth process along with storefront appeal for promotions instead of traditional marketing techniques and advertising (CalaRos Bay 2004). Through ‘word-of-mouth’ advertising technique they gained the attention of customers. The customers get attracted mainly due to their high quality of products and services. Thus, they do not want other marketing techniques to promote their products. This technique played a significant role for the success of Starbucks Coffee Company. These marketing techniques are followed for the welfare of the consumers (Voteforus.com n.d). The best strategies as developed by Starbucks which made it unique from others are “perfect cup of coffee”, in which a major emphasis is provided on the quality of the product. Though the price of the coffee is quite high than expected, it is the best brand to provide its customers with rich, delicious taste of coffee as well as smell. The second strategy is the “third place” which means they keep the atmosphere of the shop in such a way that the customers will feel it as the relaxing place in between home and work. This strong concept plays a tremendous role to attract the customers (Gia 2009). Customer satisfaction is a vital issue for Starbucks right from the entrance of the store to the final drop of their coffee because they want the customers to feel their uniqueness from the experience of coffee. The marketing strategy of Starbucks is extended to build a community around their brand. The individuals are allowed to share their experience with Starbucks on the website and the company personally joins the discussion. Another strategy is “smart partnership” in which the company creates strategic partnership in order to grow the business. By using this strategy, the company has greatly increased their sales. The strategy “innovation” means that the company always thinks of creating and innovating ideas and thoughts in their products and services. They have also started e-marketing. They also included various flavors to their coffee and more menus in the menu chart. The strategies are developed by taking into consideration the aspects of consumers (Voteforus.com n.d). The success of Starbucks in consumer society is due to their success in strategy implementation and marketing techniques such as expansion strategy, innovative products and brands, excellent store concept as well as distribution policy (Gia 2009). 3.0 Broader Marketing Environment The major external forces that represent the marketing environment of Starbucks are economic, political, legal, social, technological and competitive factors. The marketing environment is the actor in the outer environment, but has an impact on the company and affects the ability of marketing management to build and sustain successful relationship with the customers. The technological environment shapes the destiny of the company. The political environment consists of laws, government agencies and pressure groups that have impact on the organizations in a society (Scribd 2011). The political environment of Starbucks meets with challenges while operating in foreign countries. The company is expected to come across difficulties in Europe due to severe competition. The coffee culture in the Old Continent has deep roots, and the current political dispute between the US and Europeans may strengthen the already problematical anti-Americanism sentiment over there (CalaRos Bay 2004). Fair trade coffee supported that real takeover did not come until April 2000, when Starbucks controlled 20 percent of the US specialty coffee industry and agreed to carry fair trade. At first Starbucks refused to take fair trade by providing the explanation that until there was no consumer demand it might not trade the politically correct beans in its 2,300 stores. A year-long campaign was planned by ‘Global Exchange’ which is a ‘San Francisco’ based human rights organization. A campaign was ultimately concluded in plans in order to stage protests at Starbucks in 29 cities. The retailer decided to keep away from a public relations nightmare and sold the beans (Straus 2000). In the competitive environment, four categories are identified who seem to be regarded as the competitor of Starbucks. The direct competitor is the rival who produces similar products. Close competitors also produce similar product of the rival. Substitute competitors produce different products with high quality. In indirect competition, all firms compete indirectly for consumer money. The legal environment consists of contract law, product safety, consumer law, data protection, environment law, planning laws and trade descriptions. The social environment of the company has an impact on the consumer demand, population size as well as growth. The demographic profile and culture as well as belief have an influence in social environment (Scribd 2011). The three major companies competing with Starbucks are Caribou Coffee, Diedrich Coffee and Dunkin Brands. Various others coffee chain companies as well as retail companies are competing with Starbucks. The retail companies competing with Starbucks are AFC Enterprises, New World, Panera Bread Co. and Tulley. Five chief companies in Asia which are competing with Starbucks are Sponelli Coffee Company, Coffee Club, Suntec Dome Holdings, Coffee Connection and Bunke’s Coffee. An international competitor Java the Hut introduced online coffee beans along with equipments. The success factor of the company is due to its social environment where people can drink quality coffee and tea. Their major focus is to keep the place in such a way that the people can gather together and enjoy tasteful coffee drink. This coffee shop is a new concept for the US consumer where the gap is bridged between family and work. They defined the place as “be yourself” in order that consumers can hold their individual activities and gathering with friends. The high quality of the products as well as services along with a wide range of products such as coffee, tea and other products related to these have increased the level of acceptance from the consumers. In the US, Starbucks progress in a macro environment which is characterized by an aging population gradually more diverse with large Hispanic origins (CalaRos Bay 2004). The US per capita coffee consumption is on the rise and specialty coffee consumption has been rising as well; the income is on the decline and gap between “haves” and “have nots” is widening. The disposable income is considered to be at risk in the present economy and consumer spending has also declined (CalaRos Bay 2004). The broad environmental factors of Starbuck have an influence in its role in marketing environment. 4.0 Theories of Consumer Society Starbucks develop the marketing methods based on the existing consumer of the society. As coffee shops are a great place to meet people, they provide coffee as an affordable luxury to the consumer. Since the consumers are more conversant about coffee, there is no chance to deceive them (Nugroho 2006). The concept of consumerism intends to protect the rights of consumers. Modern consumer is not an inaccessible personality which means he does not make purchase without logic. To a certain extent, all participants in a contemporary fact may be called as consumerist culture and a consumer society. Several people possess consumerist values or attitudes which represent that they always desire to consume more and they try to find meaning as well as satisfaction in life to a greater extent throughout the procurement of new consumer goods. Consumerism has become known as a part of a historical method that has created mass markets, industrialization and cultural attitudes that make sure that rising incomes will be utilized to purchase an ever-growing output (The Encyclopaedia of Earth n.d.). According to Baudrillard, “This now constitutes a fundamental mutation in the ecology of the human species. Strictly speaking, men of wealth are no longer surrounded by other human beings, as they have been in the past, but by objects” (Gursky 2011). The consumers are logical in the sense that they prefer one market or more in general. The course of action of consumer is that they prefer coffee and tea consumption depending on their liking. Consumers are always striving for superior quality products which is provided in the suitable atmosphere and based in relation to their lifestyle at the time of consumption. In the US though the income was declining, the consumption of coffee was rising (CalaRos Bay 2004). The industry can be divided into two major categories on the side of consumption such as mass-marketed along with specialty coffee (Tuck School of Business at Dartmouth n.d.). The models of consumer behavior are loyalty, sociology and psychology. Loyalty means the propensity of a consumer to attach to particular products. Sociology denotes the influence of one person on other due to buying behavior of the consumer. Psychology means how an actual item of a people is influenced to purchase a product which is a bit different from the previous one (Patel & Schlijper n.d.). The theory of motivation can be related to the consumer theory of Starbucks because they were in need of delicious coffee with social atmosphere where they can gather with their friends after day’s work. When the consumption of coffee was declining in the US, Starbucks provided opportunity to the consumers to satisfy their needs. The need of human can be divided into five categories: Psychological needs in which consumers have a thirst for delicious coffee; safety needs i.e. the need of the consumers for a costly drink such as delicious costly coffee (Baines, Fill & Page 2008, p. 99). Social needs denote the consumers’ need of such a place where they can gather with family and friends. One after the other, the needs get fulfilled. Esteem needs involve drinking a cup of coffee in such a place where it is a matter of status to the consumer. After this need gets satisfied, the consumer demands for self-actualization need (Baudrillard & Kellner n.d.). The consumer before making any purchasing decision takes into consideration various factors which ultimately results in developing the purchase motive of individual consumer for a particular product. The consumer gathers information of the product in need and after the information has been acquired they make evaluation of the product. Among various products the best one is selected after a thorough evaluation. The consumer then acquires the product to fulfill their needs and then re-evaluates it for future use (Gursky 2011). Humans seem to be more adjusted to changes in perceived satisfaction than to absolute level of satisfaction. If they are used to eating or drinking out once a week, that seems a normal matter. If it gets changed and the consumers start eating or drinking out three or four times a week, then the consumer will feel a surge of pleasure. However, once consumers become accustomed to the new circumstances then the pleasure decreases and they may consider the new situation as usual. For this reason, a fact is well-known to marketers that consumers’ happiness can be constantly attracted by stimuli that guarantee to have something more, new and different objects (Brooks 2007). Needs are not directed at objects but at values. Satisfaction of needs expresses reliability to the values. Customer satisfaction does have a positive effect on an organization’s profitability. Satisfied customers try to build the basis of any successful business. They are expected to share their incidents and experiences with other people for repeat purchase, brand loyalty and positive ‘word of mouth’ of the product (Baudrillard, n.d.). Satisfaction has an influence to the consumer for repurchase intention but dissatisfaction has been considered as a major cause for customer defection or discontinuation of purchase. In businesses, developing customer loyalty is not an option any longer. It is thus the only method of building and gaining sustainable competitive advantage. It is a vital objective of marketing to develop loyalty with major customers which is shared by key players in all industries provided to business customers. The strategic essential to build a loyal customer base are emphasized on major factors such as customers, proactively developing high level of customer satisfaction with every interaction, predicting the needs of the customers and responding to each needs before the competition occurs, building closer bonding with customers as well as creating a value perception. Customer satisfaction does not mean that repurchase will occur on the part of the customers, but still it plays a significant part to make certain customer loyalty as well as retention (UCTI 2006). References Baudrillard, Jean. and Kellner, Douglas (No Date). “Early Writings: From the System of Objects to the Consumer Society”. UCLA Graduate School of Education & Information Studies. Available: http://gseis.ucla.edu/faculty/kellner/essays/baudrillard.pdf accessed 20 March, 2011. Brooks, Keith (2007). “Consumerism and the Commodification of Social Life”. York University. Available: http://www.yorku.ca/robarts/projects/gradpapers/pdf/Brooks_Modern_Consumer.pdf accessed 20 March, 2011. Baudrillard, Jean (No Date). “Consumer Society”. Chapter 2. Baines, P, Fill, C and Page, K (2008). Marketing. India: Oxford University Press. CalaRos Bay (2004). “Expansion Strategy”. CalaReos Bay. Available: http://www.calarosbay.com/files/StarbucksCaseStudy.pdf accessed 20 March, 2011. Gia, Khanh Pham (2009). Marketing Strategy of 'Starbucks Coffe'. Germany: GRIN Verlag. Global Exchange (2003). “Lattes for All: Starbucks Plans Global Expansion”. Celebrating 20 Years of Global Exchange. Available: http://www.globalexchange.org/campaigns/fairtrade/coffee/662.html accessed 20 March, 2011. Gursky, Andreas (2011). Foundations of Marketing (1): Economics. Consumer Culture. Marangos, Alkis (No Date). “Coffee Quality”. Maintaon Business Acumen. Available: http://businesstrueormyth.files.wordpress.com/2009/05/m512_starbucks_alkismarangos.pdf accessed 20 March, 2011. Nugroho, Danny (2006). “Starbucks Strategy”. Slideshare. Available: http://www.slideshare.net/tommy2cruise/starbucks-strategy accessed 20 March, 2011. Patel, Shail. and Schlijper, Antoine (No Date). “Factors in the Models”. Unilever Corporate Research. Available: http://www.maths-in-industry.org/miis/38/1/Consumers.pdf accessed 20 March, 2011. Reference for Business (2011). “Business Expansion”. Reference for Business Encyclopaedia of Small Business. Available: http://www.referenceforbusiness.com/small/Bo-Co/Business-Expansion.html accessed 20 March, 2011. Scribd (2011). “The Marketing Environment”. Reading and Publishing Evolved. Available: http://www.scribd.com/doc/13212980/Marketing-Environment-Chapter3 accessed 20 March, 2011. Scribd (2011). “The Competitive Environment”. Reading and Publishing Evolved. Available: http://www.scribd.com/Marketing-Environment/d/19739907 accessed 20 March, 2011. Straus, Tamara (2000). “Starbucks Campaign Background Info”. Organic Consumer Association. Available: http://www.organicconsumers.org/Starbucks/coffback.htm accessed 20 March, 2011. The Encyclopaedia of Earth (No Date). “The Consumer Society”. The Encyclopaedia of Earth. Available: http://www.eoearth.org/article/Consumer_society accessed 20 March, 2011. Tuck School of Business at Dartmouth (No Date). “The Coffee Industry”. Tuck at Dartmouth. Available: http://mba.tuck.dartmouth.edu/pdf/2002-1-0023.pdf accessed 20 March, 2011. UCTI (2006). “Customer Satisfaction”. Asia Pacific University. Available: http://www.ucti.edu.my/wps/issue1/wp-06-06-paper.pdf accessed 20 March, 2011. Voteforus.com (No Date). “Points to Learn from the Starbucks Marketing Strategy”. Improve Your Business Online Reputation. Available: http://www.voteforus.com/starbucksmarketingstrategy.html accessed 20 March, 2011. Bibliography Anderson, Carol H and Vincze, Julian W (2006). Strategic Marketing (2Nd Ed.). India: Dreamtech Press. Baudrillard, Jean (1998). The Consumer Society: Myths and Structures. India: SAGE. Chaffey, Dave & Et Al (2008). Internet Marketing: Strategy, Implementation and Practice, 3/E. India: Pearson Education India. Ferrel, O. C. & Hartline, Michael D (2008). Marketing Strategy. India: Cengage Learning. Friedman, Lawrence G (2002). Go-To-Market Strategy: Advanced Techniques and Tools For Selling More Products, To More Customers, More Profitably. Burlington: Butterworth-Heinemann. Goodwin, Neva R. & Et Al (1997). The Consumer Society. Washington: Island Press. Glickman, Lawrence B (1999). Consumer Society in American History: A Reader. United States: Cornell University Press. Herbold, Robert J (2007). Seduced By Success. India: Tata McGraw-Hill Education. Kurtz, David L & Et Al (2009). Contemporary Marketing. India: Cengage Learning. Kotler, Philip (1972). Marketing – Management. India: Pearson Education India. Oldroyd, Mike (2006). CIM Coursebook 06/07 Marketing Environment. Burlington: Butterworth-Heinemann. Simon, Bryant (2009). Everything But The Coffee: Learning About America From Starbucks. US: University of California Press. Young, Felina C and Pagoso, Cristobal M (2008). Principles of Marketing' 2008 Ed. Philippines: Rex Bookstore, Inc. Read More