Determine and discuss the barriers facing Starbucks as they try to reach people to change their consumption habits from tea and instant coffee.
Starbucks, a business that has strong popularity in the U.S., has decided to enter a new market in Asia. As result, they are facing barriers in an attempt to persuade customers to consume Starbucks coffee. The barriers that Starbucks are facing are: coffee and tea competitors, customer perceptions of coffee, price comparison, customer preferences, customers habits, and culture.
Competitors will be a barrier due to fact that “instant coffee is the major player.” Research has determined that coffee is a new item entering the market in Asia. ...view middle of the document...
Customer preference is a barrier that can be changed by researching what customers want in coffee. If the majority of consumers in Asia like a weaker version of coffee, and if Starbucks does not do the proper research to determine the customer’s preferences in Asia, they could lose a lot of money, and not improve their market share in this country. Specific insights in terms of coffee in Asia include association with Western lifestyles, the consumption of Starbucks coffee with status and wealth, preference of local products, and they prefer sweet tasting foods and beverages. Karl Salmon also indicated that the top five factors for Asian customers were “high quality, good for health, cares about customer, fits self-image, and fair price.” (Hawkins & Mothersbaugh, 2010)
The demographics will also play a factor in the barrier of price comparison. According to the textbook, “The potential 1.3 billion population base is largely rural and lower income.” (Hawkins & Mothersbaugh, 2010) Even though the middle class is growing, they tend to live in major cities. The target market of middle income class is expected to grow, however Starbucks will also need to focus on the customers that are in rural areas.
Make recommendations about what Starbucks can do to successfully encourage greater coffee consumption.
In order to encourage greater coffee consumption, Starbucks should offer test markets to determine what coffee tastes that customers prefer. By offering samples, they are able to effectively advertise their brand. In additions to offering samples, smaller sizes can be offered to the lower income market. By having a variety of sizes, market trials to see what consumers prefer in Asia, and by offering competitive pricing, Starbucks can stay competitive, and ahead of the same. Starbucks should also consider the culture of Asia and offer sweet desserts that are considered popular in Asia. Starbucks should also consider offering an instant coffee line that is complete with their own brand of sweeteners, and creamers as well.
Develop an advertising campaign that not only would encourage greater coffee consumption in general, but also more demand for Starbucks. Specify key themes, copy points, and visuals.
Starbucks should have an open house campaign on the slowest day of customer traffic that invites customers to come in a try a sample of their coffee. The coupon could ask for feedback on the product, and it could also request their email address for marketing opportunities. During the open house, there could be desserts on sale, and the coffee samples would be small. Wherever there are community events or gatherings, they should offer samples. This provides feedback, and new potential customers. The key theme of Starbucks should be its store slogan of "It’s not just coffee, it’s Starbucks" and “Coffee is culinary”. There should be aggressive advertising to the mature market, and the working professionals. The key theme of this...