The methodology section of a research paper is important in enabling a researcher to examine his/her results and determine the accuracy of his/her hypothesis. Research findings represent accurate information that originates from the actual experiment/survey (Lynch & de Chernatony 2007, p. 125-128). In this survey, primary data was collected from the interviews, which enabled us to have an accurate view of the actual factors that influence Starbucks customers’. In particular, this research helped us to understand the consumers’ experience at Starbuck as well as the factors that motivated them to visit the coffee house.
In this research, 58 individuals were randomly interviewed using questionnaires. All interviews voluntarily accepted to respond to the questionnaire. Similarly, the individuals who assisted me in collecting the data accepted the work voluntarily. The interviews were done near Starbucks outlets in Melbourne CBD, and Fitzroy. 54% of the respondents were male, and 46% were women. Regarding age, 65% of the interviews were between 21 and 30 years. 21% were between 17 and 20 years, 7% were less than 17 years, 5% were between 31 and 40 years, and 2% were more than 40 years. Concerning the interviews’ occupation, 40% were students, 23% were in business, 15% were administrators, 15% were teachers, and 7% were in various (other) professionals. The income of the respondents varied from less than $20,000 to more than $50,000. 47% of the interviewees’ income was less than $20,000, 29% had an income of between $20,000 and $30,000, 22% had an income of between $30,000 and $40,000, and 2% had an income of more than $50,000. 46% of the interviews also acknowledge that they spend about $20 on each visit at Starbuck. 25% noted that they use $50, 16% said they spend $160, and 13% said they spend more than $160.
The questionnaire had categorized the interviewees’ purpose of visiting Starbucks into four categories; chit chat/ chill out, meet clients, study, others. 58% of the respondents said they visited the coffee house for various (other) activities, 29% visited for chit-chat, 9% met clients, and 4% went there to study. The interviewees also disclosed that 40% visited Starbuck rarely, 26% stated they visited that facility 1-2 times a week, 25% said they went to the facility at least once a week, and 9% said they visited daily. Finally, 63% considered themselves as being loyal customers while 37% regarded themselves as being unloyal.
- What are the brand attributes of Starbucks that make it differentiated from other brands?
The purpose of this question was to consider the brand differentiation of the company from its competitors. A brand refers to specific features that make a business distinct from its competitors. In this case, a brand can be Starbuck’s logo as well as what the company has become associated with over time (Temi 2001, p. 99-102). A business can brand itself as a provider of quality and affordable products. In some cases, it can brand itself as a provider of high end and expensive products.
Question 1 was an open-ended question that was directed to all the 58 interviewees with the aim of identifying the Starbucks brand. The respondents’ answers that can help in identifying the company’s brand are those that say the consumers’ net income, their occupation, their age group, how much they spend, and their purpose of going to Starbuck.
From the analysis, it is clear that most of the company’s customers are young individuals in their twenties. Individuals who are between 21 and 30 years form 65% of the total customers. Accordingly, Starbuck has established itself as a business targeting this age group by selling its products at prices that young individuals in their twenties, who are usually in middle management or lower management levels, can afford.
Interviewees’ Age Group
The questionnaire disclosed that most of the Starbuck’s clients have an income of less than $20,000. In particular, 47% of all customers have an income of less than $20,000 and 29% have an income of between $20,000 and $30,000. In total, 76% of Starbuck’s customers have an income of less than $30,000. From this information, it is clear that most of the company’s clients have a low purchasing power. As a result, Starbuck must inevitably sell its products at low prices. This conclusion is based on that fact most of its clients have low incomes. From the questionnaire, it was established that 40% of Starbuck’s customers are students and 23% are in business. Since most students’ do not have much income, these findings support that most of Starbuck’s consumers have a low purchasing power. Further, it is also possible that those who are in business are in small and medium-sized companies, and hence have low incomes. Especially given that most of Starbuck’s clients have an income of less than $30,000. Unfortunately, the questionnaire did not interrogate them about the size of their businesses.
Occupation of Starbuck’s Clients
The questionnaires also disclosed that most of Starbuck’s customers spend about $20 on a visit, and more than 50% spend $50 or less in the coffee house. In particular, 46% spend $20 and 25% spend $50 in each visit. From this research findings, it can be concluded that Starbuck products are affordable and can be purchased by those with low incomes. Similarly, since it is possible for customers to spend even more than $100 on each visit, it can be observed that most customers have a low purchasing power and cannot afford expensive products.
Overall, Starbuck has established a brand of producing high-quality products, which are targeted to most individuals in their twenties. Moreover, the company’s products are affordable and can be purchased by even people who have low incomes. The bulk of the company’s clients are in the lowest income band used in this research ($0-$20,000).
- What is the role of strong experience that company delivers along with taste of product?
This question was open-ended and aimed at establishing whether the customers’ indeed enjoy their stay in Starbucks and the services provided. Usually, businesses always try to match their services with the needs of their target market. Therefore, if the customers are price sensitive more than quality sensitive, a firm may decide to compromise on the quality of its services and products so that it can reduce their price. Similarly, if customers are sensitive to quality more than price, a business can enhance the quality of its products and services, and also increase its rates. Finally, if customers are sensitive to both quality and prices, the company can only become more efficient so that is can reduce the prices of its products and services while still improving on the quality of its goods and services (Dess 2015).
The data from the questionnaire that related to the customers’ experience at Starbuck was that on the value and quality of services offered, customers’ reasons for visiting, the number of times they visit Starbuck in a week, and their view on their customer loyalty.
Regarding customer experience, 43.8% of the respondents said that the company’s services were affordable. Similarly, 43.8% said the services were pricey. 12.2% of the interviewees said the services were ‘value for their money,’ while 0.2% of the respondents were not sure. From the analysis, it is clear that customers were indifferent on whether the company’s services were affordable or pricy. However, the number of individuals who were positive about the company’s services were more than those who were negative. In particular, the sum of those who said the company’s services were affordable and those who were of the view that they were value for money was 56% (43.8% + 12.2%). These results show that on the overall, most of the clients enjoy their experience at Starbuck.
Quality and Value of Services Offered
Reason for Going to Starbuck
The customers’ reason for going to Starbuck is another source of their experience. From the questionnaire responses, it was observed that 26.4% of individuals go to Starbuck because of convenience, 9.4% visit because it is accessible (near a person’s residence), its quality motivates 58.4%, and 7.5% because of other reasons. Overall, the responses from the interviewees’ shows that customers’ mostly visit the Starbuck for non-cash reasons 94.2% (26.4% + 9.4% + 58.4%). Therefore, customers’ experiences are the main reason as to why individuals’ go to Starbuck.
Customers’ Reason for Visiting
Number of Times Customers’ Visit Starbuck in a Week
The number of times that customers’ visit a business shows whether they enjoy their experience. Ordinarily, customers’ who mostly enjoy their experience are always willing to return and make future purchases. From the survey, 26% of the respondents said they visited Starbuck one to two times a week. 25% visited at least once a week, 9% visited every day, and 40% rarely visited. The analysis of the customer’s shopping behavior shows that 60% of them returned in the week. This trend indicates that most of the customers’ enjoyed their experience at Starbuck.
Number of Times Customers go to Starbuck
Customers’ View loyalty
Customers’ loyalty is the other factor that indicates whether the customers’ enjoyed their experience at Starbuck. From the survey, 63% of the interviewees said they were loyal while 37% said they were not loyal. This information complements the response of the customers’ willingness to visit Starbuck within the week. Ordinarily, loyal customers would be more willing to visit the coffee house than the non-loyal buyers. As such, the high number of loyal customers of Starbuck positively relates to the high number of customers’ who visit the coffee house at least once a week.
Starbucks ability to create a unique and enjoyable customer experience has enabled it to have an advantage over competitors. Its products are affordable for its target clients, and it also provides them with an appropriate ambience. This unique combination of providing high quality services at low prices has made Starbuck to enjoy a high customer return rate.
- What is the role marketing in organizational growth and strengthening sound customer base?
This question was open-ended and aimed at identifying whether Starbucks sales and marketing efforts have been successful in enabling the company to enhance its brand and increase its market size. The underlying principle in this question is that an increase in marketing creates more awareness about the company, in turn increasing the demand of its products. Additionally, increased marketing enhances the business’ brand image, which enables the business to strengthen its customer base. The data from the questionnaire that related to marketing and strengthening of customer base was information on net income of the company’s clients, occupation, purpose of people visiting Starbuck, the amount of money spent by each client, how often clients go to Starbuck, and the number of loyal customers at Starbuck.
Majority of the company’s customers are in the lower income band. 47% of the buyers have an income of less than $20,000, and 29% have an income of between $20,000 and $30,000. Therefore, 76% of the company’s clients have an income of less than $30,000. Since people with low incomes make the bulk of buyers at Starbuck, then the company’s market strategy aims at strengthening its current market. In this case, the company sells its products at affordable rates so that people in low income bracket can make purchases. Further, the concentration of the majority of buyers being in low income means that Starbuck brands itself as a seller of affordable and high quality products. This strategy has enabled it to win the market share of low income earners.
The occupation of Starbuck’s clients indicates the target market for the company. Currently, student’s make the bulk of the Starbuck’s customers. From our study, 40% of the respondents who said that they visited Starbuck are students, 23% of them are in business, 15% of them are administrators, 7% of them are teachers, and 15% are in the other category. Normally, students do not have a lot of disposable work since they are not always engaged in work. Moreover, even those who are employed are mostly part-time workers, and they get low incomes. There is always a wide disparities in incomes among individuals who are in business, with some making huge incomes while others making very low incomes. The reviews from the respondents indicate that the main target market of Starbuck are students. Starbuck also targets administrators and people in business by providing them with ample space where they can communicate with colleagues. Visitors at Starbuck are also offered free wireless network, which enhances their experience. These strategies are essential for Starbuck to win the hearts of its target market.
Reason for Going to Starbuck
Customers’ reason for going to Starbuck instead of other coffee houses is an important indicator of the company’s sales and marketing efforts. One of the essential ways of marketing is by a business establishing the infrastructure and amenities needed by its target market. From the questionnaire, 61% of the individuals stated that they visited Starbuck for chitchat, 13% (12.5%) visited for other reasons, 9% went there for study, and 18% were interested in meeting clients. Interestingly, although the majority of Starbuck’s clients are students, very few of them are actually interested in studying in Starbucks’s coffee houses. The responses showed that social reasons were the main reasons why people visited Starbuck 73% (chitchat and other reasons). In this regard, one of the marketing and client retention strategies of Starbuck has been in its establishment of appropriate social facilities that are demanded by the company’s customers.
Amount of Money Spent by Each Customer in a Visit
The amount of money spent by customers is an important indicator of Starbuck’s target clients. Since a majority of the company’s clients have low incomes (less than $30,000), it is expected that they may most likely spend very little cash in each of their visits in the restaurant. Impliedly, one of the ways that Starbuck can market its services to its target clients is through price. In this case, the company can advertise itself as a seller of high quality but affordable products. From the responses given by the interviews, it was established that 71% of the company’s clients spent less than $50 on each of their visit, which shows that most customers spend very little amounts in the coffee house. In particular, 46% spend $20 or less, 25% spent between $20 and $50, 16% spent between$50 and $100, and only 13% spent more than $100. These results indicate that one of the main ways that Starbuck reaches its customers’ is through pricing. This method is effective in enabling the company to reach its target market.
Number of Times Individuals Go to Starbuck
The number of times individuals go to Starbuck in a week is an important indication of the company’s marketing and client retention efforts. Ordinarily, a business that aggressively markets its products has a high customer retention. In light of this, it is expected that Starbuck should have a high customer retention given that it aggressively markets its products to its target market. From the analysis, 9% of the customer visit Starbuck every day, 26% go there 1 to 2 times weekly, 25% visit Starbuck at least once a week, and 40% visit Starbuck rarely. From the analysis, Starbuck has a client retention of 60% (25% +26%+ 9%). A customer retention of 60% is positive and shows that the company’s sales and marketing efforts are effective in enabling it to capture its target client. Impliedly, these results indicate that there are 60% chances of a person returning to Starbuck once he/she experiences their services.
Customers’ loyalty is an indication of the effectiveness of Starbuck’s marketing and client retention efforts. In cases where a company has effective marketing and client retention strategies, it is expected that the customer’s loyalty will increase. Usually, the marketing and client retention efforts of a company increase its brand presence, in turn, enabling it to enjoy high customer loyalty. Noteworthy, however, customers’ loyalty is mostly affected by their experience in the business. In this case, customers’ who have enjoyed some of their past services from the business will most likely be more loyal to it. Since the provision of great customer experience is part of a business marketing efforts, it does not affect the conclusions formed using customers’ loyalty. From the analysis, 63% of the interviewees’ stated that they were loyal customers to Starbuck and 37% said they were not loyal. Notably, there was a correlation between customer retention and customer loyalty, in that, the business had a customer retention of 60% and an almost equal value of customer loyalty, 63%. From the results findings, it is clear that the company’s marketing efforts have been effective in strengthening its customer base.
Age Group and Gender of Customers
Based on the responses given by the interviewees, it is clear that most of Starbuck’s customers are in their twenties. Among those who shopped at Starbuck, 7% were less than 17 years, 21% were between 17 and 20 years, 65% were between 21 and 30 years, 5% were between 31 and 40 years, and only 2% were more than 40 years. This assessment shows that there is a sharp decline in the number of clients who visit Starbuck once they are more than 30 years. Therefore, Starbuck mainly aims at marketing its products to individuals who are between 17 and 30 years. These individuals make 86% of the company’s market. Starbuck’s customer retention is low for individuals who are more than 30years, just 5%. It further drops to just 2% for those who are more than 40 years. Given that most of the company’s customers have low incomes, less than $30,000, it is expected that most of these individuals will be of a young age and are either unemployed or just starting their careers. Further, a significant number of the company’s customers are students (40%), who are mostly in their twenties when in college. Accordingly, Starbuck mostly markets its products to young people in their twenties, and also ensures that its ambience is attractive to attract them. With regards to gender, 54% of the company’s customers are male and 46% are female. This proportions show that there is an almost equal clientele size of male and female, and this variation cannot be attributed to the company’s marketing and customer retention efforts.
Limitations of the Study
The main limitations that I faced when performing an assessment of the market position of Starbuck were unwillingness of individuals to fill the questionnaires, hurry among respondents in filling questionnaires, shortage in finances needed for the research, and time. Although I did my best to ensure that I performed a quality research, these limitations inevitably affected the quality of my research. Nevertheless, given the resources that I had and my research findings, I performed a thorough work and made reasonable observations.
Firstly, I experienced serious cases of respondents’ unwillingness to fill the questionnaires. In most cases, the interviewees did not think answering the questionnaires was necessary. Therefore, my assistants and I had to persuade them to fill these documents. One of the major risks in my team requesting the respondents to fill the forms is that the interviewees may have just filled the forms without considering the accuracy of their responses. Additionally, most of the respondents were in a hurry when filling the forms, and most of them did not bother to expound their responses in the open ended questions. As a result, I was in some cases, unable to determine the accuracy of the customers’ answers.
Another major limitation of my study was my low budget for the study. The data collection process was expensive since I had to print the questionnaires, travel to the coffee houses where I would be interviewing customers, and spend a lot of time, which I could have used in part-time work. Due to my limited resources, I only explored a small number of the coffee stores in Australia. I interviewed people who were in Bourke Street, Lygon Street, Fitzroy, Chadstone Food Court, and Starbucks stores that are in Melbourne. I also received responses from only 58 individuals. Given that Starbuck Australia alone has 34 stores all over the country, I should have made my research in most cities in the country to get an overall view of the customers who go to coffee houses. Therefore, my research findings were not representative of the opinions of all coffee drinkers in the country. Further, the study sample of only 58 individuals was not large enough to give a conclusive report of the behavior of coffee drinkers in the country.
Finally, the time needed to carry out and conclude my research was a major hindrance. In particular, I had to finish my work and research within a short period, which made me unable to observe customers behavior in the entire year. Ordinarily, I expect Starbuck’s sales to be affected by weather changes in the country, just like most beverage sellers. In most cases, there is a significant difference in the number of people willing to consume coffee in summer with those who take it in winter.
Dess, GG 2015, Strategic management: Text and cases, 8th edn, McGraw-Hill Education/ Irwin, Boston.
Lynch, J & de Chernatony, L 2007, ‘Winning hearts and minds: Business-to-business branding and the role of the salesperson,’ Journal of Marketing Management, vol. 23, no. 1-2, pp. 123-135.
Temi, A 2001, ‘Branding as a competitive strategy for demand management in SMEs,’ Journal of Research in Marketing and Entrepreneurship, vol. 3, no. 2, pp.97-106.