Case Study: Starbucks Corporation

“Brand Image and its Influence on Customers
Behaviour. Case Study: Starbucks Corporation”
1. Introduction
The awareness of ethic and social issues seem to be increasingly
spreading around the world, and business is not getting away from it.
People are willing to see organisations being good corporate citizens, and
the next generation of business leaders wanting to make a social or
environmental difference with their jobs (Wharton 2012). One of the
critiques that is constantly heard is that many corporations are still trying
to show that they ‘care’ as a marketing strategy, contradicting what they
say with what they do (Wharton 2012). This should be taken into
consideration by every organisation, since it affects the way customers
perceive the brand. Such perception is considered brand image, and it is
believed to have a halo effect on customers’ satisfaction judgement
(Hishamudding and Nor Asiah 2001).
Creating emotional bonds with a favourite brand can bring many benefits
(O’Donnell and Brown cited Fournier 1998), but it can be difficult to
achieve and maintain. For example, recent studies found that negative
corporate news can have an adverse impact on customer affinity towards
favourite brands, as well as other customer behaviour issues such as
willingness to purchase, price willing to pay, among others (Sago and
Hinnenkamp 2014). To appreciate the impact of negative information and
the strategies taken to battle it, Starbucks Corporation will be examined
and analysed through the present project research.
Starbucks Corporation, as many other global corporations, has faced a
long list of issues throughout its existence that have threatened its
reputation, such as growth obsession, hypocritical campaigns, exposure of

consumers’ information through its mobile apps, among others (Einstein
2012, Seaford et al 2012, CNBC 2014). For example, in the UK, one of the
major controversies has been Starbucks’ intention of avoiding paying
taxes, and in spite the company agreed to pay over £20 million in
corporate tax in June 2013 (Evans 2013), the consequences of such public
information might still remain.
However, one can question why Starbucks continue to be one of the
leading brands within the coffee shops industry. Will it continue to be?
What do customers take into account nowadays during their buying
decision process? How much do corporate culture and strategic decisions
affect customers’ perception of the brand? What is the actual impact on
sales? Is it possible to rebuild a positive brand image and regain
customers’ loyalty? How much does it cost?
The influence of brand image on consumer buying decision is the ultimate
target of the present research, and Starbucks Corporation will be the case
study.
1.1 Aims and Objectives
Aim
To assess the influence Starbucks’ brand image has on consumer
behaviour against other factors such as price, location, and quality.
Objectives
1. To identify and describe the main factors that determine brand image.
2. To identify factors affecting customer purchase decision process.
3. To examine the extent to which Starbucks’ brand image affects
consumer behaviour in comparison to other factors.
4. To make recommendations for gaining a positive influence on customer
behaviour.

2. Literature Review
In order to understand the theories related to the aim of this research, a
wide range of sources have been revised, critically analysed, and
presented in this section. The start point is the concept of brand, including
brand image, brand positioning, and brand loyalty, followed by theories of
perception, and finally it is presented the consumers buying decision
process.
2.1 Brand
Brand is a name, term or phrase, logo, sign, symbol, design or
combination of them used to introduce a product or service (American
Marketing Association 2014). They exist in customers’ minds and depend
on attitudes, lifestyle and psychographics (American Marketing
Association 2014). Torkaman and Nejad (2013) cited Kapferer (1997) who
states that brand is an abstract of identity, authenticity, features and
differences that can summarise and communicate an idea, list of
attributes, values and ethics behind a product or service. Hence, it is not
only about a product’s name, logo, symbol, or slogan; it has also an
intangible nature that functions as a set of promises to customers
regarding trust, consistency, expectations, and performance (O’Donnell
and Brown 2012). Branding is a useful tool that not only helps to
differentiate a product or service from others, but also to develop a close
and often enduring relationship with customer (O’Donnell and Brown
2012).
To achieve both differentiation and enduring brand-customer
relationships, each brand must create a unique selling point, for example:
personal identification (Kaynak et al 2007). Others perspectives suggest
that competition must be pre-emptied from members’ minds through
superior service, distinctive offerings, or communications to minimize

threats of substitutions and develop positioning (Fischer et al 2010). In a
few words, unique appealing features and strategic positioning are very
essential for a brand to be able to attract and retain customers (Torkaman
and Nejad 2013 cited Hogan 2007).
2.2 Brand Image, Brand Identity and Brand Positioning
Brand image refers to the manner in which the public decodes all the
signals emitted by the brand, the idea that occurs to the consumers when
they see or hear that brand (Fill 2013). It can be simplify by saying that it
is the perception of a brand that consumers have.
On the other hand, brand identity is the statement of how a company
wants its brand to be perceived (Torkaman and Nejad 2013). It is a vital
corporate-based concept that can be described as a set of unique
connections of a brand name which brand strategists are trying to create
or maintain (Torkaman and Nejad 2013). Each company should be careful
at the time of selecting the strategies that are expected to distinguish the
company from competitors, as they will be the ones influencing the brand
image customers will perceive and like or dislike. This is the reason why
brand identity is based on the position within the market a company
wants to have. Kotler and Keller (2013) define brand positioning as the act
of designing an image that place a product or service in a distinctive place
inside the target market’s mind.
For example, the airline EasyJet has aimed create an appealing brand
image for low-budget customers based on low fares and friendly service
(Smith 2013), which would be the strategies the company is using as
‘EasyJet identity’ to gain the desired customer perception and a great
position within its market. In contrary, British Airlines has intended to
create a global and caring brand image that offers comfort and luxury
(Luxury Branding 2012). Therefore, the strategies taken differ from those
taken by EasyJet and consequently both brands have a different position