Job Video Product Analysis, Essay Example

I keep track of my monthly expenditures through detailed record-keeping and after going through my record for the last month, I discovered that I consumed21 cups of Starbucks coffee in November at a combined cost of approximately $70. I estimate my monthly coffee expenditure could easily have been under $30 had I opted for cheaper options at McDonald’s or Burger King. Clayton Christensen’s article really got me wondering why I was opting for Starbucks despite the fact that McDonald’s and Burger King also have locations quite close to my home. Moreover, I have also been aware of the blind tests done few years ago which showed that McDonald’s coffee was competitive in taste to Starbucks(NewsMax, 2007). It suddenly occurred to me that I was not going to Starbucks only to get coffee but was also using the brand perceptions to reflect my lifestyle. I wanted the world to know that I have premium tastes and the money to afford premium lifestyle as well. Getting a coffee from McDonald’s would send the message that I belong to the bottom of the economic hierarchy. In fact, I believe from personal experiences that McDonald’s coffee is a better value than Starbucks coffee but in this case the actual quality and price of the product doesn’t matter as much as my desire to be seen in socially positive light.

Since my reason for choosing Starbucks over McDonald’s or Burger King is brand perception, Starbucks coffee’s substitutes do not only include coffee brands such as Dunkin’ Donuts and Tim Hortons but also other premium fast food brands such as Subway. Being a customer of premium fast food restaurants such as Subway also sends the message that one can afford to pay a little more for product that is perceived to be healthier than the entry level brands such as McDonald’s and Wendy’s. Even though McDonald’s and Wendy’s also sell products with similar price-points as Subway, their public perception is that of economic brands that mostly sell cheap and unhealthy food.

Today, consumers do not only care about the products or services companies offer, the price they charge, and their quality of customer service but also the ethical standards followed by companies in their day-to-day operations. This is why Corporate Social Responsibility (CSR) has been becoming a powerful marketing tool for companies. This puts Starbucks at an advantageous position because the company is known for its ethical business practices such as reducing energy consumption, providing loans to coffee bean farmers, improving recycling technologies, and buying coffee beans from certified suppliers only (Starbucks). Starbucks ethical business practices mean the company has an opportunity to turn itself into a lifestyle brand. Lifestyle brands allow consumers to express their personal values and define themselves to the world (Chernev, 2011).Drinking Starbucks coffee will enable the consumers to send message to their counterparts and the public that they support the business of a company which engages in ethical business conduct. This will also enable the consumers to define themselves as concerned citizens who deal with a company that is good for the environment as well as the suppliers in developing nations. Another marketing strategy may be to introduce a program that gives more visibility to Starbucks loyal customers as compared to those who make infrequent purchases. One way is to introduce a reward program under which loyalty club members are served coffee in distinctively-designed cups. Such cups will give loyalty club members, a feeling of being different from the average Joe.

New marketing strategies will particularly emphasize the fact that the beans that go into Starbucks coffee are of higher quality and selectively sourced. Moreover, the company charges little higher prices because it is actively engaged in the economic developed of coffee bean growers in developing nations that are often exploited by multinational companies. Thus, market segments targeted by Starbucks will now also include environmentally-conscious consumers who want to be seen as responsible citizens in the eyes of their fellow citizens. Starbucks will also attract consumers that want every product and service they purchase, to reflect their economic and social success. Being Starbucks loyalty club member will be an announcement to the world that the consumer has reached a place in the society where he/she can afford simple luxuries on regular basis and doesn’t have to compromise on quality in order to save few bucks.

Re-marketing will further increase consumer loyalty among current consumers some of whom may be developing the feeling that they are paying too much for Starbucks coffee when competitors are already offering reasonable substitutes. The re-marketing will give consumers several reasons why they should remain Starbucks consumer because the implicit benefits of being a Starbucks consumer outweigh the price difference over competitors’ offerings. Such implicit benefits include being seen as socially and economically successful, being perceived as environmentally conscious, and being a supporter of fair business practices.

There are several risks in blindly implementing Clay Christensen’s milkshake analogy. First of all, it may create the impression that the product quality is not as important as the public perceptions which could be changed through effective marketing campaigns. It is possible that surveys that show competitors’ catching up in taste may be flawed or not done on big enough samples. The focus on shaping consumer perceptions through marketing than actual product may drive away many loyal consumers who really buy Starbucks for quality and taste rather than public perceptions. Christensen’s milkshake analogy also creates the impression that there are always other reasons behind a product or service purchase rather than the most apparent ones. Milkshake restaurant though customers bought milkshake because they enjoyed the product but the actual reason turned out to be consumers desire to make their commute less boring. It might have been true in milkshake’s case but it doesn’t mean it applies to everything. It may be that most consumers really buy coffee because they simply enjoy it whether they expect any benefits or not. It is also possible that consumers go to Starbucks because they get friendly customer service and consistent product quality. One of my friends told me she has observed taste differences in McDonald’s coffee from one location to another but that is not the case for Starbucks.

But Clay Christensen’s approach also helps us satisfy other consumer needs some of whom have already been mentioned. One need is the desire to increase social appeal. Similarly, consumers also want to make a positive difference in the society and the greater world and Starbucks coffee assures them that their consumption is having minimum negative impact on the environment.

It is apparent that consumers buy products and services for a variety of reasons some of whom may be readily apparent while other reasons can only be discovered by carefully interacting with customers and encouraging them to give open feedback as Christensen’s milkshake story demonstrates.

References

Chernev, A. (2011, August 11). Why Facebook Is A Threat To Lifestyle Brands. Retrieved December 15, 2012, from http://www.forbes.com/sites/onmarketing/2011/08/11/why-facebook-is-a-threat-to-lifestyle-brands/

NewsMax. (2007, January 29). McDonald’s Tops Starbucks in Coffee Taste Test. Retrieved December 15, 2012, from http://archive.newsmax.com/archives/ic/2007/1/29/102949.shtml

Starbucks. (n.d.). Responsibly Grown Coffee. Retrieved December 15, 2012, from http://www.starbucks.com/responsibility/sourcing/coffee