Starbucks Coffee Corporation is an international coffee brand that has gained popularity and loyalty for the brand among customers around the world. It has enjoyed the status of premier retailer of coffee products internationally, operating in 50 global markets with more than 15,000 retail stores. However, the brand could not compete through the market in Australia where it rivalry brands Gloria Jeans and McCafe held the winning position. Present paper will try to dig out the ways, adopting which, Starbucks Coffee Australia can attain a competitive edge to cross through the competition in the market to benchmark position. The major objective of this study is to assess what marketing techniques can better help Starbucks in Australian market.
Present project proposal design aims at evaluating and understanding the requirements of Coffee marketing techniques of Starbucks Corporation in Australia. The methodology developed for the research proposal will serve the purpose of helping the Starbucks to understand the needs of the customers in Australian market and improve the existing marketing techniques.
The existing research on Australian coffee market demonstrates one of the greatest potential growth opportunity for retail companies providing coffee beverages. The market research projects that it is expected from the coffee market to grow at the rate of 9.2 percent in the coming five years that currently is around seven percent. Though the Starbucks brand is higly recognized in global markets for its quality of service and taste however, the brand had to face severe failures in catering the Australian consumers’ needs and wants.
Market research is an important and crucial element of strategic planning of a company that enables it to get its products range familiarized with the specific needs of consumers and devise the pricing, promotional and other techniques of the marketing strategy in a specift target market.
Starbucks failed to understand the needs and wants of Australian customers as compared to its market competitors Gloria Jeans and McCafe. Starbucks needs to understand the changing purchase behavior of Australian consumer. A growth in the disposable incomes has been seen in the consumers purchase behavior research that resultantly changes the market behaviors quickly and more urbanized kind of lifestyles are affecting the purchase behavior of customers. Australian market has a relevant growth pattern for coffee companies because of its consumers’ demographics in comparison with other economies. The failure of Starbucks marketing in Australia suggests that is could not understand the consumers’ different tastes, the purchase power of Australian customers, the service requirements reach to service stores. Starbucks needs to revise its marketing strategies in Australia for which greater body of market and consumers demographics research is needed. Specialized marketing techniques to compete through the highly competitive market are highly advisable for Starbucks.
Purpose of the Research
The purpose of the present research study is to meet the following objectives;
- Identifying and evaluating the shortcomings of Starbucks marketing techniques that it developed for Australian consumers.
- To enhance the existing research on marketing techniques, importance of consumers’ demographics in development of products and socio-cultural problem faced by food and beverages companies in global markets such as Australia.
- To compare and contrast marketing techniques of Starbucks and its competitors Gloria Jeans and McCafe in Australia.
- To demonstrate how lack of market research caused failure to Starbucks products in Australian market.
- To illustrate that how actively market research strategies have backed the successful marketing tools and techniques in coffee beverages industry around the world in past decade.
- To suggest and recommend the advisable changes for the improvement in Starbucks marketing strategies for Australian market of foods and beverages.
- To evaluate how socio-cultural differences tend to affect the success and failure of marketing strategies of the international companies.
- To assess how standards are service provision are perceived and evaluated by consumers.
Rationale for the study
To understand the consumers’ demographics and to attain specific knowledge about their expectations from the products and services market research plays a vital role for the retail companies. Market research includes methodical collection of applicable and relevant data enabling the marketing managers to utilize such information for the formulation of most suitable and effective marketing tools and techniques such as product development criteria, pricing and promotions. Market research will eventually reveal the consumers’ needs and behaviors lessening the dangers of troublesome choices. It is vital for the companies to attain a competitive-edge by investigating the consumers market to stay connected to the shoppers, with the changing trend of time, clients’ wants and needs change too. Investigative studies on consumers’ demographics and purchase behavior enables advertisers and marketing directors to have profound background knowledge for devising strategies to attain customers loyalty and popularity of the products and services. Statistical surveying is utilized to dig out the facts and figures of the target market, cost items and administrations, and distribution to acquire a wide comprehension of the company’ s position in the market and image as an organization. Current Starbucks research is accumulated for translating “the best target market, level of marketing techniques, the inclinations and ways of life of their business dispositions, conclusions, sectors”; such information is crucial for the company’ s marketing success and failure. To build a positive image and relationship with the consumers for its products in Australia, Starbucks needs accumulated data with respect to, “responses to the physical value, price consciousness, money value,” for the pricing strategy of the coffee products.
Market research studies require systematic accumulation of the current and relevant information that enables the researcher to provide comprehensive knowledge to the information users. Research methods for such studies vary from pilot test studies to focus groups to representative sample surveys on broader levels. Some of the market research studies however, need the library research using the secondary data. Every research problem is somehow different and unique from others making the researcher to be careful in selecting the most appropriate methods of research against the respective problem and objectives of the investigation.
Keeping in view the needs and demands of the research questions to be answered in an accurate and effective manner, following research design has been devised for the present research study.
The present study will be a quantitative research study. Quantitative approach for research refers to as a research technique by which the inferable information is sought by the researcher. That involves the construction of structured questions that are asked from the selected representative sample of the population to be studied. The most important advantage of using quantitative approach is that the data can be analyzed statistically for the solid analysis of the information collected. In the present study quantitative technique will allow the researcher to gather data with the use of formalized procedures and infer data against the assumed hypothesis. Precise kind of information is obtained to help managers devising the most useful strategies of marketing for the Starbucks in Australia.
The construction of research instrument for the present study involved the use of three scales of measurement for the questions.
An apparent measurement scale enabling researchers to dispense the sample into specific classifications and gatherings. An example for this is to divide the respondents according to gender as in male and female respondents. Such division of respondents makes it easy to allocate the cells with coding 1 and 2 serving the convenient and simple labeling as categories. That is allocating responses to category one and two explicitly without overlapping and any intrinsic value.
The classes are mutually exhaustive too. That means according to Theodre (2002) that there will be no additional or third category allowing the allocation of responses normally. As such there is no third classification into which respondents would typically fall (Theodore, 2002). Consequently ostensible levels of measurements classify people or individuals into totally unrelated and all in all comprehensively separate groupings. The use of nominal scale in the present study will allow researcher to divide the data in responses from males and females respondents. Questionnaire contains only one nominal scale question utilized as a part of this review for soliciting the sex of the sample subjects. Predetermined categories of choice in this question are characterizing Gender (1) Female and (2) Male in question.
An ordinal scale is a level of measurement that enables the signing of responses to respective cells based on ranks. The use of ordinal scales in the present study will help quantifying the consumers’ perceptions, opinions, relative attitudes towards Starbucks coffee products, their purchase choices and preferences. A number of four ordinal measurement questions have been included in the questionnaire.
Interval level of measurement scale, in which there is an equal distance/interval intrinsic to the value of responses, and there is an absolute zero does not means the absence of the object (Tracy, 2006). Interval scale of measurement incorporates the ordinal level and enables researcher to identify the distinction between the employees. Three questions using the interval scale level of measurement are included in the questionnaire to seek data of variety as much as possible.
Before collecting the full-fledged data from the representative sample a pilot-test was conducted to guarantee an unmistakable comprehension of the inquiries. Pre-test individuals will focus on specialists’ loved ones.
The methods of investigation in a research program are vital in the process and the most important element of a research plan is selecting the representative sample out of the population under study. Sampling is the process that makes the researchers to select an appropriate portion of population to conduct the study generalizable on the whole population (Larson, 2008). When the research problem is identified and it is decided that what sort of information will be best answering the research questions the process of sampling comes in front. Furthermore the examination plan (exploratory, expressive or causal) will be utilize is built up, the scales and estimation had been determined, and the poll configuration had been conclude after pre-test.
Mainly, sampling is done by one of the two sampling techniques that are characterized into probability test and non-probability technique. Convenience sampling, quota sampling, judgment sampling, and snowball testing are incorporated in non-probability technique. Non-probability technique of sampling is a system that will be easy and comfortable and heavily relies on investigative judgment. It does not utilize chance choice methodology and is more suited for look into like on existing client of a certain unprecedented item (Isidro, 2004). Whereas probability sampling, incorporates simple random sampling, stratified sampling, systematic sampling, cluster sampling and is a technique that gives every individual from the population a settled shot of being chosen to be representative. This procedure required rundown of test edge of populace to have the capacity to totally accessible before each individual from the populace had an equivalent shot of being chosen. The present study has chosen the probability sampling technique.
The Use of Secondary Data
To analyse the shortcomings of the marketing strategies of Starbucks that failed in Australia secondary data will be used such as Starbucks coffee reviews and consumers feedback reports. Secondary data are assembled and recorded by another person before (and for purposes other than) the present task. Secondary data as a rule are authentic and as of now collected. No entrance is required to subject respondents or members of sample. Normally there are four main focal points in utilizing secondary data. To begin with, rapidly it can be acquired, as opposed to gathering essential information that may require a while from starting till finishing. It is reasonably inexpensive, secondly, when contrasted with gathering primary information. At third place, it is conveniently accessible. And fourthly, it improves existing primary data. Since specialist researchers utilize optional data does not imply that they won’t gather primary data. Actually, in every case relatively, the analyst’s assignment of primary data accumulation is supported by first gathering secondary data. A secondary data inquiry can acclimate the exploration with the industry, including its deals and benefit patterns, real contenders, and the critical issues confronting the industry. And secondary data hunt can recognize ideas, data, and phrasing that might be helpful in directing the essential research.
Bloomberg. (2014). Starbucks Has an Australia Problem [Article]. Retrieved from http://www.bloomberg.com/bw/articles/2014-05-27/starbucks-has-an-australia-problem
Business Research Methods (with Qualtrics Printed Access Card), 9th Edition William G. Zikmund, Barry J. Babin, Jon C. Carr and Mitch Griffin
GSBS6002 Weeks 1-5 Lecture Notes/Handout and workshop materials (available on Blackboard).
Munchies. (2014). This Is Why Australians Hate Starbucks [Article]. Retrieved from https://munchies.vice.com/en_us/article/4xb9gd/this-is-why-australians-hate-starbucks