A PROJECT REPORT

ON
“Consumer Perception & Sales Promotionin regard to Starbucks”

B.A (VOC)-MMRB
SUBMITTED TO
COLLEGE OF VOCATIONAL STUDIES, UNIVERSITY OF DELHI

SUBMITTED By

Name of Student
 Acknowledgement

The present work is an effort to throw some light on the “Consumer

Perception & Sales Promotion in Regard to Starbucks”. The work would
not have been possible to come to the present shape without the able
guidance, supervision and help given by a number of people.

I convey my heartfelt thanks to all those people who helped and supported
me during the course of completion of my project.
 CHAPTER-1-
INTRODUCTION
Statement about the Problem

The project aims towards accomplishing the objective of a comprehensive study of customer

perception about Starbucks and the sales promotion strategy of Starbucks. A customer

understanding is the primary goal; organization exists for no other reasons than to meet customer

needs and expectations. It is important to develop proactive methods for understanding the

customer needs and expectations. Other wise, a long queue of competitors is lined up to grab the

opportunities to move ahead.

Why Is This Particular Topic Chosen

This topic has been chosen to explore consumer satisfaction towards the products and services of

Starbucks and also to analyze the sales promotion strategy of Starbucks. On 19 October 2012,

Starbucks opened its first store in India, measuring 4,500 sq ft in Elphinstone Building, Horniman

Circle, Mumbai. Starbucks opened its first roasting and packaging plant to supply its Indian outlets in

Coorg, Karnataka in 2013. Till about the late 1990’s coffee drinking in India was restricted to the

intellectual, the South Indian traditionalist and the five star coffee shop visitor. As the pure (as

opposed to instant coffee) coffee café culture in neighboring international markets grew, the need

for a relaxed and fun “hangout” for the emerging urban youth in the country was clearly seen.

The café is a meeting place for 15-29 year olds, both male and female who are served the best

coffee by friendly and informed staff, in an uplifting and invigorating ambience. Each café,

depending upon its size attracts between 500 and 800 customers daily, mainly between 4pm and 7

pm. Customers describe Starbucks as the place they frequent most after “home and

workplace/college”. It is a place where they meet friends and colleagues, in groups of 3 or more;

a place where they rejuvenate and are free to be themselves rather than a place to be “seen at” vis

a vis other cafes.

What Contribution Would the Project Make

The Starbucks philosophy of Quality, Service, Cleanliness and Value (QSC & V) is the guiding

force behind its service to the customers. Starbucks serves only the highest quality products. All

Starbucks suppliers adhere to Indian government regulations on food, health and hygiene while

continuously maintaining Café Coffee Day’s own recognized standards. All Starbucks products

are prepared using the most current, state-of-the-art cooking equipment to ensure quality and

safety.

At Starbucks the customer always comes first. Starbucks India provides fast, friendly service - the

hallmark of Café Coffee Day which sets its restaurants apart from others. Starbucks restaurants

provide a clean, comfortable environment especially suited for families. This is achieved through

Starbucks stringent cleaning standards, carefully adhered to.Starbucks does not sacrifice quality

for price - rather Starbucks leverages economies of scale to minimize costs while maximizing

value to customers.
 CHAPTER-2-
OBJECTIVES OF THE STUDY
Objectives

The present study revolves around the following broad objectives:

 To assess the consumer’s satisfaction level towards the products and services of Starbucks

 To analyze the sales promotion strategy of Starbucks

 To suggest key measures to increase the level of customer satisfaction in Starbucks

 CHAPTER-3-
RESEARCH METHODOLOGY
For the purpose of this study, I prepared two research tools, both questionnaire, to find out the

relevant primary data pertaining to the functioning and working of Café Coffee Day with reference

to the consumer perception and sales strategy.

The data was collected based on information provided by:

1. The management of the organization.

1. Customers visiting Starbucks outlets.

Besides the primary data collected with the help of the questionnaire, I have also collected the
relevant secondary data from various sources like magazines, books and Internet and
newspapers. Based on the relevant primary and secondary data, a comparative analysis has been
done so as to find out the areas of excellence and areas of improvement of both organizations.
The areas of excellence and improvement have been identified based on factual information, in
light of which recommendations and suggestions have been provided for the overall
improvement of the organizations in the future.

My research has included:

Primary Data: Interviews and Questionnaires with

o Customers, and

o Managerial staff of Starbucks,netaji subhash palace-New Delhi

Sample size: 50 (45 customers + 5 officials of Starbucks,netaji subhash palace-New

Delhi)

Sample area: Netaji subhash palace- New Delhi

Secondary Data: Secondary data will be collected through

o News Papers,

o Relevant Books, Internet links,

o Research Reports,

o Magazines
 CHAPTER-4-
LITERATURE REVIEW
 Evolution of a Coffee Café

The beginning:

It all began around 1000 A.D. when Arab traders began to cultivate coffee beans in large

plantations. They began to boil the beans creating a drink they called ‘qahwa’ which translates to

‘that which prevents sleep’. The drink became widely popular, and the need for coffee beans grew.

Interesting facts about Coffee & Cafés:

 Coffee was first known in Europe as Arabian Wine.

 Coffee is presently the second most traded commodity in the world. It is second only to oil.

 Nescafe was invented by Nestle because it had to assist the Brazilian government to solve its

coffee surplus problem.

 The Coffee Café Industry

 The Coffee Café industry is currently one of the biggest and fastest growing sectors in business.

The industry consists of a mix of individual cafés, hotel cafés and retail café chains.


 Individual Cafés:

The main bulk of revenue is earned by small, individual cafés, run mostly by families and friends.

It is a relatively unorganized sector. There are millions of such cafés around the world, and they

provide customers with a homely, casual experience. The bulk of these cafés are mainly in Europe,

where every little town or village has local cafés, where people gather together for a conversation

over coffee, or just to be alone with their thoughts. These cafés have been the birthplace and

sanctuary for various creative minds, revolutionaries and thinkers of our time. The most recent

example is the author J.K. Rowling, who has written most of the Harry Potter series of books,
sitting at her local café. These cafés set themselves apart from retail chain cafés and hotel cafés

because they provide customers with a homely, classic appeal, which cannot be emulated.

Hotel Cafés:

Ever since the popularization of coffee, hotels all over the world started opening 24-hour coffee

shops where visitors to the hotel could walk in for a cup of coffee and some food at any time.

These coffeehouses are extremely important, because they provide international visitors to the

hotel with a universal drink- coffee. Any customer can walk into any major hotel in the world, and

enter the coffeehouse, and know what to expect. These cafés are not really major players in the

coffee café industry, but rather provide supplementary services to the hotel industry.

Retail Café Chains:

The last, and the most organized sector in the coffee café industry, is the retail café chain. Off
late, these chains have become extremely popular and are growing at an ever-increasing pace.
These retail chains have work with an organized structure of man, material and money. The work
on developing a recognized brand consistent to all their outlets, which customers can easily
relate to, wherever they go. They provide customers with a standardized level of service and
quality at each of their outlets. The vast popularity of these retail chains is shown in the rapid
international growth of brands like Starbucks. Customers can go to any Starbucks across the
world and know exactly what to expect.
Growth of Café Industry in India:

Hot beverages have always been a part of the tradition of India, especially South India. Coffee

took the first seat in South India when the traditional Brahmin classes brought down the beverage

from the ruling British around the 1930s. During the early years the drink was confined only to

traditional rich Brahmin families who served filter coffee in a ‘davra- tumbler’. Coffee is no more

confined to the rich Brahmin class now, though the tradition of serving filter coffee in the ‘davra-

tumbler’ continues to this day. In order to spread the drink, coffee houses emerged at various places

in the country, which also served as the opposite places for lawyers and the educated class to hold

discussions ranging from politics to cinema. It is also believed that many scripts and ideas for films
evolved here. One of the oldest coffee houses in South India is the Raayars mess, Chennai, which

serves first class filter coffee even today. The mess was established in the 1940s and continues the

tradition of coffee but supplements it with tiffin also. The vintage location of the mess attracts

huge crowds even today early in the mornings, Coffee however was not the only item on the menu.

These places also served food and other drinks to their customers.

The drink also became famous and as a result even five star hotels began cashing in on it. Several

hotels all over the country started opening coffee- shops that catered to high- end customers. This

showed the popularization of coffee cafés, to all sections of society. The drink has now become

more of a concept than merely a drink itself. The last decade witnesses the growth of numerous

coffee pubs in the country. A number of coffee café owners tried to westernize the taste in contrast

to the filter coffee. Now, large retail chains like Starbucks

 STARBUCKS

COMPANY HISTORY:
In January 2011, Starbucks Corporation and Tata Coffee announced plans to begin opening
Starbucks locations in India. Despite a false start in 2007, in January 2012 Starbucks finally
announced a 50:50 joint venture with Tata Global Beverages, called Tata Starbucks Ltd., which
would own and operate outlets branded "Starbucks, A Tata Alliance". Starbucks had previously
attempted to enter the Indian market in 2007. Starbucks did not cite any reason for the
withdrawal.On 19 October 2012, Starbucks opened its first store in India, measuring 4,500 sq ft
in Elphinstone Building, Horniman Circle, Mumbai. Starbucks opened its first roasting and
packaging plant to supply its Indian outlets in Coorg, Karnataka in 2013.

Starbucks expanded its presence to Delhi on 24 January 2013 by opening 2 outlets at Terminal
III of the Indira Gandhi International Airport, and later one in Connaught Place. Tata Global
Beverages announced in 2013 that they would have 50 locations by the end of the year, with an
investment of ₹4 billion (US$58 million). However, the company would open its 50th store in
India only on 8 July 2014. (Tata Starbucks, n.d.)Starbucks opened the largest coffee-forward
store in the country at Vittal Mallya Road, Bangalore on 18 March 2019. The store measures
3,000 sq ft, and is Starbucks' 140th outlet in India. Tata Starbucks opened 25 stores in 2017-18
and 30 in the 2018-19 fiscal year.Starbucks announced its entry into the Gujarat market on 7
August 2019. The company simultaneously opened five stores in Surat and Ahmedabad the next
day. Starbucks' flagship store in the state is located at Prahlad Nagar, Ahemdabad and offers
more vegetarian options than other Indian outlets. CEO Navin Gurnaney stated that the company
would open more than 30 stores in the 2019-20 fiscal year, of which 11 had already opened.

LOCATIONS:
As of March 2019, Starbucks operates 140 outlets in 10 cities of India. The 100th store came up
at Kamala Mills in Mumbai. (Tata Starbucks, n.d.)

International presence:
The Tata Group and Starbucks Corporation also collaborate on some ventures outside India.
Starbucks Reserve Tata Nullore Estates, the first-ever Starbucks Reserve coffee sourced
exclusively from India, became the first Indian coffee to be roasted and sold at Starbucks home
city of Seattle in 2016. The coffee was later rolled out across Starbucks outlets in the United
States. In the same year, Starbucks began selling Himalayan bottled mineral water at its outlets
in Singapore and also began retailing its products on board all flights of Vistara, a joint venture
between the Tata Group and Singapore Airlines. (Tata Starbucks, n.d.)

Starbucks Coffee’s Organizational Culture Type

and Features:
Starbucks Coffee’s organizational culture is a culture of belonging, inclusion and
diversity. The combination of the company’s key cultural characteristics is unique and
specific to the nature of its coffeehouse chain business. The internal cultural situation is
reflected through the company’s human resource development programs and baristas’
interactions with customers. In this regard, the main features of Starbucks’ corporate
culture are:

1. Servant leadership (“employees first”)

2. Relationship-driven approach
3. Collaboration and communication
4. Openness
5. Inclusion and diversity
, Barista, and Café Coffee Day have opened up around the country. The concept of a café today is

not merely about selling coffee, but about developing a national brand. Retail cafés now form a

multi- crore industry in the country, and have huge potential for growth locally, and internationally.