Consumer Behavior at Starbuck - Case Study Example

Consumer Behavior at Starbuck al Affiliation Consumer Behavior at Starbuck Introduction s are integral ion any business. Customer will shop depending on their preferences or trends in the market. Customers determine the amount of products supplied to the market by a given firm. The duty of each firm is to determine customer behaviors and plan their marketing strategies based on these trends. The market is wide and new entries pose a major threat to a company’s production and market demand. The essay will focus on Starbuck and their strategies put across to counter customer behavior. The focus will be to determine its market Mix and recommend measures that will enhance the product supply in the market. Customers react to products based on the marketing strategy and other internal factors. This will enable a plan to be set aside to counter consumer behaviors. Methodology The survey will involve 25 target consumers. The consumers will be chosen from daily users of the product. They will be profiled based on attitudes, motivation, personality, perception and learning behaviors of the target group. This will enable a consumers profile based on wider issues. An analysis will be done on the efforts by the current administration to profile their customers and their plan based on the data collected. The current market mix will be focused upon with information gathered from the profiling aiding the analysis. The brand manager would be focused upon with an aim of scrutinizing his plans to counter consumer behaviors. Results gender Male Female Number of customers 14 11 The attitude of the customers would be determine by their reactions towards the product, here20 of the customers have a positive attitude towards the product with 5 of the customers citing sugar levels and levels of caffeine as a health concern. On matters satisfaction, the customers cited the customer service and promotional strategies as reason as to why they consume coffee at the store, 10 of customers were satisfied by products offered at the store with 15 suggesting for improvements. The prices of the products was cited as motivating factor for the majority of the customers citing with a 5 customers citing addition with 8 suggesting the promotional strategies as a motivating factor towards purchasing of the products. Profiling based on income income Number Price as motivational factor Promotional strategies as a motivational factor Addiction No income 2 0 1 1 Less than $ 10000 7 3 4 2 $ 10000 5 4 1 1 More than $ 10000 11 8 2 1 The customers also cite advertisements, recommendation and internet as factors that led to their learning aspects of their products. Learning method Number Advertisement 14 Recommendation 6 Internet 4 Personal research 1 Customer perception on the product Majority of the customers cited advertisement as means in which they learned about the product. Only one person did personal research in choosing Starbuck as their preferred coffee brand. Factors Not satisfied Satisfied but needs improvement Satisfied Product 3 5 17 Services 1 8 16 Management 5 9 11 Majority of customers had a great personal perception about the product being offered at Starbuck. Discussion The section will focus on the implication of the customers to efforts by the brand manager to counter customer behavior. Measures will include ensuring customer satisfaction and designing models to counter competition and retain current customers. The section will draw from academic sources to support models applied by the firm in satisfying their customers. The market Mix will form the basis of the discussion. Product Starbuck has created products that will satisfy their entire customer regardless of their financial status and the health concerns. Majority of the customers from the profiling are those from the high end of society with those with no income consuming less of the product. The firm has designed different brands to cater for each end of the income brackets. The same applies to those customers with health concerns. ‘Free sugar’ coffee is aimed at increasing the market share and changing the customer perception about brands at the coffee shop. The supply of the products would depend on the demand created by motivation factors created by the customers. Those of the low end of the cycle Production of sugar free coffee is consistence the attitude of some of the customers on the effect of the coffee produced and supplied by Starbuck. Attitude is triggered by culture and cognitive behaviors of the customers, once the new brand is released into the market, those defiance customers would have a product that meets their need and hence increasing their consumption of different brands of coffee at the store. A firm needs to balance between customer satisfaction and the revenue collection goals. Products at the coffee shop tend to focus on revenue collection through increased market share. The firm’s products tends to create its own demand as they target specific groups of their customers. Price The company has a on a unique pricing strategy aimed at retaining the customers and attracting more customers. The pricing is set depending on the customer behaviors. to cater for the needs of their customers base on their income, the firm has introduced two products with similar quality and taste. Vente coffee costs 1.75dollars while Caramel Frappucino cost 5 dollars. (Starbuck, 2014)The strategy is aimed at increasing the number of customers visiting the shop. Offering price ranges would enable those customer make informed choices while purchasing goods at the coffee store. The firm also offers seasonal discounts on a range of products. Discounts are aimed at attracting more customers and rewarding loyal customers by offering cheaper services. The company has designed cards to be issued to loyal customers. The card members would be handed privileges while shopping. This include reduced prices and special prices during holidays and special occasions. During birthdays, cardholders are issued with a 15% discount off their normal prices (Starbuck, 2014). The strategy is meant to create a positive attitude towards the customers. Discounts pose major challenge to the customer perception. Cheaper prices are associated with low quality and new customers may shy away from predict due to its prices. The model may only be effective in retaining customers. Place Customer seeks services and good that tend to be convenient in terms of location. Starbuck locates its premises. Customers would prefer locations that reduce their transportation cost. New consumers would locate Starbuck with less difficulty. This is due to their policies to locate their business in the central business district and busy streets. Motivational factors needs prompt customers to seek available alternatives will satisfy their needs (Bowman& Gatignon, 2012). Location is a vital part in attracting customers and a change in location would mean that customer change their preferences and turn to alternatives. The one stop shop chosen by the firm would reduce the cost to the final customers and at the same time maintain the quality. Customer would a half of the customers samples are calling for improvement in both the management and the market. The firm has chosen to use a direct distribution network in that consumers access their products directly from the source. Reduced cost in distribution would have the same effect to the final product. Prices determine the amount of supply to be offered into the market (Deaton & Muellbauer, 2000). Minimum prices will mean increase in demand, which would prompt the firm to increase supply into the market. The firm is utilizing the direct channels of distributions to ensure that more customers are attracted their range of products. Promotion The survey indicates most of the customers utilized the advertisement platform to locate. Only four indicated the internet as their source of information. Their promotional strategy involves using the golden card customers to recommend their friends and families. This is enhanced by the firm’s efforts to brand each merchandise bought at the coffee store. This includes branding wrappers and receipts to enhance promotion. Information sourced from peers and family member would influence the way customers respond to products. The firm has utilized advertisement with modes of promotion changing depending on the customer geographic location. The levels of the customer participation is minimal, this is evident on the number of customers performing self-research. Discounts and special offers has been utilized by the firm in ensuing new products are consumed in the same quantity as the old products. the market remains wide and new entries poses a major challenge to the firms objectives of retaining their customers. The internet remains the cheapest mode of communication between people of different geographical area (Mothersbaugh, 2009). The firm on the other hand has neglected it in their means to promote their services. From the 25 sampled customers, the firm only four used the internet in inquiring for services from the firm. The wide usage of the internet makes it ideal for firms to use it in advertisement and other promotional strategies. The brand manager has failed to encourage their customers to use the internet to inquire services. Competing firms may use the internet to their advantage and pull customers away from Starbuck. The high-end society accounts for the largest share of customers at the firm. this means that most of the customers have access to the internet. The firm failures to acknowledge this fact act as a loophole in which rival firms may use to shift demand to their firms. the low market lower-end market accounts for a sizable share of the customer market and little effort is being done by the brand manager to ensure the needs of these customers is catered for. Recommendation The firm needs to focus more on the changing trends in their customer to design an appropriate marketing strategy. A large percentage of the customers tend to unsatisfied by the services with those satisfied calling for improvements. The management needs to ensure any product being issue to the market meets the customer expectation. This means that the firm needs to cluster their customers based on income and preferences. The attitude of the customers towards the goods being offered need to focused upon. By determining the needs of the customers, the firm may introduce other products that satisfy customers from different income groups. This will mean maintaining quality but availing affordable services and good to the customers with no hidden charges. This will change the perception of most customers towards the products from the firm. The current charges are high compared to other stores hence making it difficult for new customers seeking services from this firm. Discounts are short-term strategies that will attract customers but when the prices are adjusted to normal, customers would react by seeking other stores with discounted prices. The firm should then create a pricing strategy that will ensure the new customers are retained after the seasonal discounts are over. The firm should engage with customers to ensure improvement of services offered to them. This will include engaging them in matters concerning product design. The brand manager should use the profiling to improve on products and at the same time introduce new products that will attract customers based on their preferences. Customers exhibit some traits that will prompt the brand manager to improve on their services and product to counter these traits. This would include rebranding their products, offering alternatives for those low performing products, adjusting prices to respond to low and high demands of their products. Conclusion Customers play an important part in the planning and execution of strategies by the firm’s marketing. Starbuck utilizes their market mix to improve on their customer’s response mechanisms. The firm identifies the needs of its customers and offer services depending on the levels of priority. The firm focuses on the pricing model to attract new customers and at the same time maintain the loyal customers. A company needs to balance between customer satisfaction and revenue collection. The price range offered by the firm ensures that a change in attitude do not affect the customer loyalty towards products supplied by Starbuck. When focusing on personal perception the firm focuses on offering services at the convenience of the customer. The brand manager is responsible top change in model by any firm. The distribution of the product should not affect the prices of products. It is the responsibility of any firm to balance their revenue collection with satisfying customer needs. Reference Bowman, D. & Gatignon, H. (2012).Market response and Market Mix Model: Trends and Research opportunities. Boston, MA: Now Publishers Inc Deaton, A. & Muellbauer, J. (2000).Economics and consumer behavior. New York: Cambridge University Press Mothersbaugh , H.(2009). Consumer behavior building marketing strategy. New York: McGraw-Hill. Starbuck (2014). Starbuck menu. Retrieved from http://www.starbucks.com/menu Read More