Marketing Intelligence Report: Starbucks Purchase and Buyer Behaviour

This report provides a comprehensive analysis of Starbucks' marketing strategies, focusing on purchase decision-making processes and buyer behavior. It explores the stages of purchase decision-making, including need recognition, information search, evaluating alternatives, purchase decisions, and post-purchase evaluation. The report also examines various buyer behavior theories, such as the rational model and cognitive dissonance theory, and identifies factors influencing buyer behavior, including cultural, social, personal, psychological, and economic factors. Furthermore, it investigates brand loyalty, corporate image, and repeat purchasing. The report delves into market research techniques, differentiating between primary and secondary research and exploring sources of secondary data. It also discusses the validity and reliability of market research findings. The report includes a customer satisfaction survey and provides an evaluation of the survey, offering insights into techniques for assessing customer response.

Marketing Intelligence

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................6
2.1 Market research techniques....................................................................................................6
2.2 Using sources of secondary data............................................................................................6
2.3 Validity and reliability of market research findings..............................................................7
2.4 Marketing research plan.........................................................................................................7
TASK 3............................................................................................................................................9
3.1 Market size trends..................................................................................................................9
3.2 Competitor analysis...............................................................................................................9
3.3 Evaluation............................................................................................................................10
TASK 4..........................................................................................................................................11
4.1 Techniques for assessing customer response.......................................................................11
4.2 Customer satisfaction survey...............................................................................................11
4.3 Survey review......................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
Marketing is an essential component for every business organisation. Developed products
and services can attain greater value in international and national markets when marketing
strategies are implied. This report is based on different aspects which are related to products of
Starbucks whenever a person decided to purchase. From stages of purchase decision making to
factors that can affect buyer behaviour will be elaborated in this assessment. The effectiveness of
a proposed strategy for marketing products and services of Starbucks increases when the
concepts and theories described in this report are applied. In addition to this, a customer
satisfaction survey will also be provided and reviewed for the organisation in order to get a deep
understanding for techniques involved in assessing customer response.
TASK 1
1.1 Stages of purchase decision making process
Purchase decision making process is at the end of buyer. Every individual who thinks of
buying a product from Starbucks has to go through all these five stages. To understand complete
processing easily, an example of a person thinking about drinking coffee at Starbucks is stated as
below:
Need Recognition: Needs are something that can be generated because of any reason be
it personal factor or some sort of influence. Once, the concerned person is confirmed that he
wants to drink coffee, he will proceed to next stage.
Information search: Consumers conduct market research and collect information from
all possible sources (Malaval, Bénaroya and Aflalo, 2014). From the above example, person will
search for various cafeterias and restaurants that provide coffee and its variables. The consumer
can take support from information sources like internet or advertisements.
Evaluating alternatives: The market is full of competition. Large number of options are
acquired from the information that is collected by purchasers in the second stage. Consumer has
to evaluate these options and then make a choice of the company from which they will fulfil their
need (Moutinho and McCabe, 2014). The person who had a desire to drink coffee has selected
Starbucks as the prime option.
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Purchase decision: At this stage, customer has evaluated that selected option is viable for
making purchase and he paid required amount to company for acquiring respective product and
service. The person here drinks coffee and pays billing amount to Starbucks.
Post purchase evaluation: The final stage of purchase process includes acquisition of
feedbacks from customers by company (Saleh, Ali and Julian, 2014). After getting the product or
service, if consumers are happy and satisfied, tendency for repeat purchase increases.
When the customer goes through all the stages of purchase decision making process, the
marketer has to play respective roles. Right from the initial stage, the marketer should be able to
meet the needs of customers. Features or attributes of products should be communicated in such
a way that purchase decision of customers is in favour of Starbucks.
1.2 Buyer behaviour theories
Buyer behaviour theories help in understanding the mechanism which supports in making
specific choices. Rationale model of buyer behaviour is based on attributes of consumers that
help them in making choices which are oriented towards maximum benefits. Starbucks is a
multinational company that runs a chain of coffee shops. The customers who perceive this
organisation for fulfilling their needs expect good quality eatery with excellent services (Rani,
2014). Rational behaviour theory helps in understanding attitudes of individuals in marketplace.
Purchasers with rational attitudes will choose Starbucks only when they perceive it as a
practically viable option.
Cognitive Dissonance theory of buyer behaviour is based on the attitudes and personality
of consumers who have conflicting thoughts. For example: a person is facing a dilemma of
having some coffee at nearby cafe. Dilemma occurred because he has two options that is either
to go to Starbucks or Costa. The cognitive dissonance theory is based on this origin of thoughts.
Consumer decisions are driven by their inner thoughts and beliefs rather than practical facts
(Schiffman, Paladino and Carlson, 2013).
1.3 Factors affecting buyer behaviour
Buyer behaviour is reflected when a person takes decisions regarding purchasing a
product from Starbucks. The factors that can influence this behaviour are described as below:
Cultural: The society and community which surrounds a consumer from the cultural
factors affect buyer behaviour. For example: a person wants to drink coffee from Starbucks but
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his community doesn't believe in supporting foreign brands. At this point, consumer behaviour is
influenced by the culture.
Social: Reference groups or social classes are the components of social factors that
influence purchasers. The motivation or inspiration provided by social factors help purchasers in
deciding whether they will buy a product from a company or not (McQuarrie, 2015). For
example: if a person has some bad experience with Starbucks and he is a significant contributor
to the welfare of society, many people who are influenced by thoughts and beliefs of this
individual will be affected whenever purchasing from Starbucks will be concerned.
Personal: Age, life-cycle stage, occupation, education and personal circumstances are the
elements of personal factors. Consumers' decisions are highly influenced by their personal space
and its current conditions.
Psychological: Motivation, perception and learning of a consumer are considered as
psychological factors. If an individual is not motivated to make purchase from a particular
company then he won't buy any product or service until and unless the firm gives an
extraordinary offer (Malhotra, Birks and Wills, 2013). Negative perception and disbelief also
influence buying decisions of consumers.
Economic: Income levels and choice of lifestyle with pricing strategies of company
contribute as economic factors that affect the buyer decisions and behaviour of consumers.
1.4 Brand loyalty, corporate image and repeat purchasing
Brand loyalty: Positive attitude towards a brand which influences a consumer to make
purchase solely from one company is regarded as brand loyalty. Starbucks has gained a lot of
brand loyal customers across various operational centres.
Corporate image: The nature of thoughts or images in a person's mind whenever a
company or brand is referred is known as the corporate image. Basically, multinationals use this
concept for understanding their reputation in the eyes of common people (Jacob and Weiber,
2015). Starbucks' positive corporate image has developed over years after the success of strategic
business expansion.
Repeat purchasing: When an individual is satisfied by the products and services of
Starbucks but makes purchase decisions only occasionally, then repeat purchasing takes place.
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The mind set of repeat purchasers is quite fluctuating because they can switch over other brands
any time.
All these three terms i.e. brand loyalty, corporate image and repeat purchasing are
interrelated. Starbucks uses these parameters in measuring the brand awareness and reputation
from customers' point of view. When customer is satisfied by the purchase decisions then
probability of repeat purchasing increases. Continuous reception of the best quality products and
services convert repeat purchasing into brand loyalty and positive corporate image.
TASK 2
2.1 Market research techniques
Market research is a process through which information is gathered regarding success and
failure of a strategy or product. The purpose behind running market research is to get knowledge
about customer satisfaction as well as company position in the competitive markets. The
importance of market research is felt when business organisations wish to expand or target
potential customers on the basis of their current products and services. There are two types of
market research discussed below: Primary research: The primary researches are divided into two types that is quantitative
and qualitative. Quantitative market researches are collection of statistical or observed
data which is gathered by computational techniques (Barnham, 2015). On the other hand,
qualitative techniques are methods which are employed for getting valuable information
without considering their size and volumes. Primary market research is entirely new
information. The use of quantitative research is realised when Starbucks wants larger
samples with appropriate validity while qualitative research is used when company aims
to develop an insight about opinions and attitudes.
 Secondary research: When existing sources of information are to be used for conducting
market research then secondary research techniques are employed (Ormston and et. al.,
2014).
2.2 Using sources of secondary data
The data can be gathered by either the primary sources or the secondary sources. In this
research, the data collection is being done. Primary data is the data that has been collected by the
person for the first time and secondary data means the data that has been already collected by
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some external body. Various sources of secondary sources includes books, journals, online etc.
So, in this research, the researcher will make use of the secondary data in order to achieve all the
aims and objectives. So, the data can be collected by the following means :
1. Books/Journals : The researcher can gather much information about the aim from the
books as there are various online and offline books available that can help the researcher
in analysing the information better and more efficiently.
2. Online : By the means of online, everything has become possible, so one can gather a
huge amount of information from online sources. It can be any commercial website or
any other education portal. Also, the researcher can get statistics on the aim in order to
make the whole research more approximate and efficient.
Market research objectives for Starbucks
 To identify potential customers in UK's market.
 To get an insight about nature and extent of competition.
Secondary data is the information that is collected from other researches or reports. The
secondary market researches are conducted to get secondary data. The sources of these data are
given below:
 Public sources: Being free of cost, public sources are available to all individuals. Public
sources include government census, public libraries, reports, etc. that are valuable works
of different individuals (Bryman and Bell, 2015). Educational institutions, colleges and universities.
 Commercial sources: Starbucks can consider commercial sources only when sufficient
financial resources are available because the utilisation of these sources includes certain
costs. Competitor data, business reports, information from trade associations, etc. are the
components of commercial sources (Market research techniques, 2017).
To achieve the defined market research objectives, public and commercial sources can be
used. They will aid the research both qualitatively and quantitatively (Oliver, 2014). Starbucks
can also use project reports of educational institutions and universities because it has great
quality research and abundance of information.
The target audience of Starbucks includes adults, young adults from the age group 18 to
25 and extending till 40. Children in the age group 13 – 17 have contributed to about 2% of the
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sales in Starbucks. Hence, it can be stated that major target of potential customers is in the young
adult age group (Who Is Starbucks' Target Audience?. 2017).
2.3 Validity and reliability of market research findings
The validity of the research is considered as a sort of idea that helps in analysing how
sound the research is. Along with the design of the research, the validity also applies on the
methods that are being used in the research (Saeidi and et. al., 2015). So, the research should be
efficient enough that it holds a large validity as Starbucks can involve various methods and
techniques that can help the company in expanding the overall validity of the company.
Reliability in research is considered as the fact that how true the research and its data is. That is
why, efficient methods have been used by the researcher in order to have all the data and
information efficiently and appropriately. There are some limitations as well as if in case, the
researcher wants to put more time for the research just to make the research more effective, in
such cases, it is also important to ensure about the fact that cost and time are available because if
they are not available, they can act as the limitations of the research.
The tool that was used for conducting the primary market research was a customer
satisfaction survey. The use of this tool was valid because it was helpful in achieving the
information regarding potential customers in UK and also the nature and extent of competition in
the market. As the findings are valid, it automatically relates to being reliable.
2.4 Marketing research plan
Market research plan for Starbucks
Background: Starbucks is premier coffee shop of USA and has spread its roots to Asia,
Australia and Africa. The company has gained brand reputation and recognition in different
parts of the world due to its quality products and humane services.
Rationale: The company chose to conduct market research because of increasing competition
and proportionately declining consumer share. Development of scientifically advance
techniques have helped Starbucks to realise that product perseverance can be improved with
help of findings from this research.
Objective of research: Starbucks aims to conduct a market research for identifying potential
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customers and recognising its position in current operational markets with respect to
competitors.
Methodology: Primary research techniques that will be used by Starbucks are surveys, personal
interviews. Secondary market research techniques proposed for this plan are use of balance
sheets, inventory records and sales figures of the company as well as major competitors.
Data analysis: The information acquired from these sources and techniques will be interpreted
and cross checked by analysis department to get valid and reliable information.
Time frame: 4 months.
Budget: £62,000 is allocated by Starbucks to conduct this research.
Month 1 Month 2 Month 3 Month 4
Development of
rationale
Setting up of
objectives
Methodology
implementation
Data analysis and
interpretation
TASK 3
3.1 Market size trends
Starbucks operational market of UK has consumers that belong to age group of young
adults and adults. Great quality coffee and soothing ambience has led this company to gain
commendable market share within a short period from establishment (Sengupta, Balaji, and
Krishnan, 2015). The cafe and coffee shops industry of UK is getting a revenue of £6 billion
with a 6.3% of annual growth. This contribution to the GDP (Gross Domestic Product) of the
company is quite astonishing. Starbucks is the second largest business organisation that is
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involved in this industry in terms of market share. The biggest competitor of Starbucks is Costa
Coffee.
Considering markets of London specifically, Starbucks has been giving tough
competition to its rivals. The volume of this market is about double when compared to UK's
entire domestic market. The reason behind such huge difference is the existence of population
that has high disposable income and brand preferences. Digital marketing styles and growing
presence of business organisations on social media communities have changed market trends of
cafe and coffee shops industry (Claycomb and Martin, 2013). These trends are visualised over a
time period of about 4-5 years which indicates rapid growth due to technological developments.
3.2 Competitor analysis
Competitor analysis is a technique through which one business organisation can get the
idea about strategies that are being developed by its competitors and rivals (Dabholkar, 2015).
Apart from methods used by rivals, strengths and weaknesses of their organisational dynamics
are also figured using competitor analysis.
Competitor analysis plan
Chief competitors of Starbucks: Cafe Nero and Costa Coffee.
Objective: To get information about competitors strategies and products.
Identification: This research is being conducted to understand the strengths and weaknesses of
Costa Coffee so that Starbucks can sustain severe competition.
Methodology: The company will adopt Porter's five force analysis to conduct this operation.
Time Frame: 1.5 months.
When the above described competitor analysis plan is carried out the it was found that
Starbucks is facing a neck to neck competition from Costa Coffee. On the other hand, there is an
increasing threat from new entries in the British markets. The market share of these two
companies has a vast difference (Competitive Analysis, 2017). The changing preferences of
customers to select healthy and hygienic products has caused Starbucks to reconsider the
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proposed strategies. Customer perception for both the companies is a brand value with positive
image but technological capabilities of Costa is much higher than Starbucks.
Carrying Out the above proposed plan, following information is acquired:
Competitor Analysis Findings
Competitors: Costa and Cafe Nero
Marker Share: Costa has 20% share, Cafe Nero has 9% and Starbucks holds 31%.
Financial Analysis: Starbucks and Costa hold a stronger position in the market when it comes
to financial capabilities. However, Cafe Nero is providing silent competition to these
international giants in terms of increasing customer share.
Competitor Geographic Coverage: Costa: Founded in 1971, the company has headquarters in England and has 3,401 shops
across the world. Cafe Nero: This company is also based in England i.e. London and has 700 branches
worldwide.
 Starbucks: This enterprise was founded in 1971 in USA. There about 24,464 stores
across the world.
From the above data, it is quite influencing that Starbucks holds a strong geographical
coverage with regards to its competitors.
Distribution Network:
The distribution network of Starbucks is very strong when compared with competitors. The
amount of customer satisfaction reached for this organisation is commendable.
Depth of Product Range:
Cafe Nero Product List: Espresso based drinks, cappuccino, latte, macchiato, fruit boosters,
chocolate drinks, caramelatte, different types of coffees, pasta salad and soup dishes.
Costa Product Range: The company offers wide variety of coffees depending on the regional
taste of consumers, eatery and different types of drinks or refreshments.
Starbucks Product Range: Low diet drinks and different types of coffee, beer, wine, iced
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drinks, coconut milk, handcrafted diary and soy, wide range of tea products.
Technological Capabilities: All the three companies are offering services with amalgamation of
technology. But on comparing the capabilities, undoubtedly, Starbucks has acquired highest
efficiency.
Brand Image: Costa and Starbucks hold stronger brand image while Cafe Nero doesn't have as
much international presence or awareness amongst customers.
Customer Perception: Starbucks is perceived as one of the best coffee houses and customers
have been relying on the products and services of the company. There is quite similar image of
Costa and Cafe Nero in terms of customers.
3.3 Evaluation
To evaluate the opportunities and threats which are faced by Starbucks's coffee variables,
SWOT analysis is conducted as follows:
Strengths
 Starbucks is a brand which
automatically rates its products and
services quite high in eyes of
consumers.
 Profitability of the organisation is
remarkable.
 Company has highly efficient staff and
action plans. Moreover, employee
satisfaction levels are also noticeably
high in the organisation (Secondary
Market Research, 2017). Strategic position of Starbucks in
global markets is quite strong.
Weaknesses
 Pricing of products and services is too
high.
 Uniqueness is no doubt present in
products of Starbucks but heavy
competition has declined unique
quality.
Opportunities Threats
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