Brand Communities and Brand Loyalty Assignment - Starbucks
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Added on 2020-10-22
Brand Communities and Brand Loyalty Assignment - Starbucks
Added on 2020-10-22
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BRANDS AND BRAND COMMUNITIES
ContentsINTRODUCTION......................................................................................................................................4Body of Research.................................................................................................................................4Discussion..............................................................................................................................................5CONCLUSION......................................................................................................................................7REFERENCES......................................................................................................................................8
INTRODUCTION The term “Branding” refers to the process of creating a unique image or brand for a product in the minds of customers primarily through advertising campaigns with a consistent theme. It aims to establish a differentiated and significant presence of brand in the market that attracts & retail loyal customers. Company can gain high competitive advantage over other rivals with effective brand strategy (Laroche, Habibi & Sankaranarayanan (2012). The concept of brand loyalty compromises of a customer’s commitment to continue or repurchase to use one brand product or services. Businesses may provide a customer loyalty programs that keep consumers coming back. In return, consumers enjoy the perks and rewards of being a loyal customer. The chosen organization for given report is Starbucks Corporation which is an American coffee house chain. Presently, the company operates in more than 28,218 location worldwide. The report covers how Starbucks generate higher profitability ratio through customerloyalty. Body of ResearchStarbucks is an American based leading coffee house chain, operating all across the world with more than 28,218 locations. It was first established in the year 1971 and gain profitability in the early 80s. From past 47 years, company is trying to distinguish itself from other competitors like Barista, Costa Coffee on the basis of quality, taste and customer loyalty while popularizing darkly roasted coffee. Starbucks Corporation has been credited with transforming the coffee industry. Althoughcompany took it something that had already been done in the same way from past decades andturned it upside down. They are undertaking things in a unique or different manner ever since it is formed, including customer loyalty as well. Basically the company have developed a loyal following of consumers both with revolutionary reward programs as well as great customer experience. But there are certain things that makes this program so great. The worldwide coffeehouse chain is not largely successful for a stroke of luck but the company was aware of the fact that what they were doing and they always keep a foot ahead in terms of attaining high competitive advantage. However the owner of company found that by increasing consumer retention just by 5%, entire profitability of firm would increase by 25-29%. Although this is not a small pay off. According to Gartner Group, 80% of Starbuck’s future revenue will generate from 20% of its existing consumers (Zhou, Zhan & Zhou, (2012). Considering and applying the concept of Pareto Principle, firm also thinks 80% of sales can come from 20% of loyal customers. In-fact Company has pretty much double its profits with customer loyalty programs. According to statistics report, it has been figured out that 41% of Canada and U.S. based Starbucks transactions were mostly generated via loyalty card while only 24% were made through mobile application. Thus, it can be state that with the help of loyalty programs company’s revenue & its presence in market can be increased with these. Apparently, Starbucks has revamped its loyaltyprograms. For example: For every purchase or else I say with each cup of coffee, customers are able to get the stars. Once they are accumulated with 12 stars, customers can redeem these points whenever they want. This makes customer attached and fascinating with the given products. But now it ensures that customer can get more stars and that too at faster rate. As a result, Starbucks agreed to listen to its loyal consumers and then make change accordingly. As now it will take 125 stars to get a free product or item like for every $1 spent = 2 stars. This makes consumers motivated to spend more amount of money at Starbucks to unlock better andbig rewards.
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