Consumer Behavior

Four C's are as follows:

1. Cost to the Consumers:

o The average Starbucks customer visits a store 18 times a month and spends $3.50 a visit.

o The company's sales and profits have each grown more than 50% annually through much of the 1990's.

o The pricing strategy is based on the consumers' perceptions of value.

o Price ranges:

Coffee per pound

- Latin America coffee ranges from $9.95 to $12.95 per pound.

- Africa/Arabia ranges from $9.95 to $15.95 per pound.

- Asia/Pacific ranges from $10.15 to $13.45 per pound.

- Multi-region blend ranges from $ 9.95 to $12.95 per pound.

- Dark roast blend ranges from $ 9.95 to $10.65 per pound.

Individual beverages

- Tazo tea ranges from $1.35 to $3.45

- Espresso ranges from $ 1.35 to $2.30 per pound.

- Coffee (hot) ranges from $ 1.45 to $1.75 per pound.

- Coffee (hot) ranges from $ 1.60 to $2.45 per pound.

- Frapuccino ranges from $ 2.65 to $4.20 per pound.

2. Communication:

Starbucks focuses on the word of mouth as a main media of communications by creating a unique customer experience and is not concentrating so much on advertising. The ability that Starbucks has had to make human contact with their customers, through their people, is one of the reasons they have been so successful. Too often, companies view customers as transactions, not people. That is what happens when there is an emotional connectionÐ'--when someone says he appreciates you as a customer and a human being. Starbucks tries to enhance people's days and make them feel good about being at Starbucks.

Starbucks provides in-store promotions by having programs such as Ð''one free coffee day' as a way to promote their coffee.

Starbucks relies on relationship capital. This delicate asset requires continual nurturing and attention. If you frequent a Starbucks nearby, you may have noticed that the employees look at you in eye, anticipate what you want, and cheerfully help the line move along.

Starbuck's warm yet tight grip on its suppliers; how the company nurtures relationships with employees using promotions, compensation, and feedback mechanisms intended to keep employees motivated and content. Starbucks has achieved the lowest employee attrition rate in the industry. In the end, Starbucks views its product not as coffee-based drinks but as a customer experience for which all the things around are well sustained and carried out.

Starbucks builds trust and confidence among their people by promoting themselves as a socially conscious company. This is a company with a conscience. Starbucks encourages people to be involved in their local communities. Starbucks tries to do things such as pay more than the asking price for coffee beans. That way Starbucks can get the money back into the hands of the people who grow it, often in poor countries.

3. Consumer benefits: Starbucks' primary product that consumers benefit is coffee, as well as a wide variety of other beverages, foods, and CDs.

Extensive Product line: Dozens of (hand-crafted) beverages, coffee, bottled FrappuccinoÐ'® and FrappuccinoÐ'® cool blended beverages, several lines of TazoÐ'® tea, EthosÐ'™ water, fine chocolates, sandwiches, salads, pastries, home coffee brewing equipment, CDs and gift cards.

Services: Office Coffee Service, delivery service and retail food service lines.

Merchandise: Starbucks merchandise includes exclusive espresso machines and coffee

brewers, unique confections and other coffee and tea related items.

High quality of product:

 The World of Coffee---Starbucks coffee buyers travel to the higher elevations where the climate and soil provide perfect growing conditions and where they find the finest arabica beans in the world.

 Certified organic coffee ---Many of the coffees Starbucks buys are certified organic coffee, which is gown without the use of synthetic pesticides, herbicides or chemical fertilizers.

 Shade-grown ---- another standard Starbucks uses in selecting coffee beans. Purchase coffee from farmers using traditional cultivation (shade-grown) method, a kind of naturally growing which yields higher quality coffee.

 Organic milk & soy milk ---Starbucks continues to offer certified organic milk as a dairy alternative in their U.S. company-operated stores. They also offer organic soy milk for consumers who prefer a soy alternative

Benefits through the eyes of the customers: Just as important as building a coffee bar culture, Starbucks maintained control over the coffee from start to finish Ð'- from the selection and procurement of the beans to their roasting and blending to the ultimate consumption. Starbucks' extreme vertical integration has paid off.

Starbucks' location has provided so far great benefits to customers by appealing to all five senses:

1. the enticing aroma of the beans

2. the rich taste of the coffee

3. the product displays and attractive artwork adorning the walls

4. the contemporary music playing in the background

5. and even the cozy, clean feel of the tables and chairs

Starbucks' strong brand is tied both to the actual quality of the product and service and to various intangible factors. Those intangibles include "user imagery" (the type of person who uses the brand), "usage imagery" (the type of situations in which the brand is used), the type of personality the brand portrays (sincere, exciting, competent), the feeling that the brand is trying to elicit in customers (purposeful and warm), and the type of relationship

...