Starbucks

Deborah | Claudia | Jaime | Joanne

Marianne | Weiguang
Industry Over view
(Singapore)
Retail sales by cafés -
$1069 million in
2009
Number of cafés
increased by 3% in
2009
Market Leaders -
Starbucks Coffee and
Coffee Bean & Tea Leaf
Brief Overview
World’s leading coffee
retailer
64 outlets in Singapore
Beverages make up
77% of revenue
Target segment -
affluent, well-educated
young professionals
bet ween the ages
25-44
 SWOT Analysis
St re n g t h s
Strong Brand Equity We a k n e s s e s
Product Innovation & Variety Inefficient Staffing Plan
Intimate Ser vice Limited Lounging Seats
Store Ambience Cannibalization
High Quality Coffee
Convenience

Opp ort uni t ie s Thre ats

Pricing Promotions Dilution to Brand Image
Increasing Appreciation for Coffee Increased Competition
Marketing Problem
Dilution of brand image
Growing number of young tertiary
students studying at Starbucks
Lower table turnover rate
Students have lower purchasing
power
 The Big Question.
Should Starbucks embrace the
student crowd?
What can they do about
students?
 Our Aim
Reinforce associations bet ween Starbucks
and a more mature crowd.
 Gen Y Patrons’
Impression of Starbucks
Cosy
Comfortable
Convenient
Chill
 Current Efforts

Management uses
Communicators to
discourage studying
Students ignore efforts
 Why do students
study at Starbucks?
Data & Findings
Research Methodology
Focus groups
Junior College Students (17-18 Years Old) – 8
University Students (19–23 Years Old) – 7
Inter view with Starbucks manager
Sur veys
Students who study in Starbucks – 132
Non-students (≥25 Years Old) – 33
Demographics
Age of Students

15% < 13
14-16
17-19
20-25
> 25

82%
Demographics
How Long They Have Studied in Starbucks

19% < 6 months

6 months-1 year
1-2 years
47% 5% > 2 years

29%
 Findings
What do you do in Starbucks?

Drink 89%

Eat 27%

Study 62%

Relaxation 34%

Socialize with friends 62%

Take away 30%

Others 3%
 Demographics
Most of the time, I usually go to Starbucks (with)...

6%
25% Alone
2-4 people
> 4 people

69%
Analysis & Interpretation
of Findings
Herd mentality
Signaling through consumption
Attainment of ideal self
 Findings
Do you study during peak hours?

Yes No
38%

62%
 Findings
If yes, why do you continue studying during peak hours?

The crowds do not distract me. 18

I do not feel there is pressure to leave. 21

I am a paying customer! 31

Others 5
Analysis & Interpretation
of Findings
Herd mentality
Signaling through consumption
Attainment of ideal self
Approach-avoidance conflict
Starbucks Habits
 Gen Y Patrons’
Impression of Starbucks
Cosy
Comfortable
Convenient
Chill
Students’ Impression of
Starbucks
Comfortable
Convenient
Young Crowd
Friendly Staff
Conducive
Reasons for Studying
Prices Similar to Competitors
Ambience
Convenient Location
near home (62%)
near school (53%)
What Students Want
More power plugs
Better lighting
Bigger tables
More comfortable seats
 Comfort
8.5 average

Most comfortable

Most comfortable to study

 Comfort
Seats students
want

Will you study if

these seats are
used throughout?
Should Starbucks
Welcome Studying?
Gen Y patrons say: No!
67% strongly against
Makes Starbucks look cheap
Fast food restaurants
Starbucks becomes
synonymous with studying
Assume that all outlets are
packed with students
54% end up leaving/order to-go
Other Thoughts
Seat-hoggers are
inconsiderate
Spoil the image
Disturb ambience
Starbucks is not a place
for studying
Recommendations
2-Pronged Approach
 Refreshing Existing
Associations
Upscale
For Lounging
For Relaxation
White Collar Workers
Weaken Link bet ween
Starbucks & Studying
 Strategies
Environmental Factors
Packaging
Marketing Communications
Distribution
Environmental
Scenario One
Scenario Two
Comparison
Schema
Display purposes
Starbucks menu
Environmental

Magazines
Environment: Table
Make it difficult to
write on tables
Table surface
Make it difficult to
place books and laptops
on the tables
Place Coasters &
Coffee Table Book
Before After
Environmental
Furniture
Environmental
Powerpoints
 Sensory Adaptation
reduced sensitivity to stimulation that results from
repeated presentations of that stimulation
 Environmental
Music
 Environmental

Aromas
Change? Yes we can!
Packaging
 Bring Back
Personalization

Customer Intimacy
Present: Emphasis on
efficiency
Recommendation: Bring
back the old practice
Vintage Sleeves
Mugs with Est 1971

Vintage Posters
 Marketing
Communications
MarComms Efforts
“Back to Beans”
Campaign
Revise
communicators
Distribution
Distribution
Directing
students to
less populated
outlets
Subtly make
these outlets
more appealing
to students
Conclusion
Q&A.