Term Paper: Starbucks Business Research Methods III

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Business Research Methods III

Business Research Methods III- Starbucks

When providing advice to individuals how to cut costs in the currently sluggish economic environment, personal finance gurus like Suze Orman often invoke 'the latte factor,' namely the way small expenses like a latte can add up over time in a consumer's budget. Cutting down one's consumption of three-dollar lattes can seem like sensible advice but such a warning can strike fear into the heart of a company such as Starbucks. Starbucks has founded its business model on the concept selling affordable luxuries like fancy coffee drinks. The core consumer demographic of the Starbucks business is the young-to-middle-aged consumer who delights in the respite provided by a Starbucks experience. While Dunkin' Donuts and McDonald's have eked out a niche in the cost-conscious fancy coffee market, and higher-end coffee products exist, Starbucks has been successful positioning itself in the middle of the market, and draws revenue from both low and high-spending consumers as well as its demographic core.

However, individual Starbucks can have different characters and draw customers through their unique positioning -- a very convenient, fast-paced Starbucks might draw traffic from businesspeople in the morning on one Manhattan block, while a slower and more ambient franchise on the same street with a great deal of seating space might draw 'yoga moms' mid-morning. This varied clientele is one reason so many Starbucks have flourished, fighting typical business wisdom that too many chains, too close together, creates a saturated market. Starbucks at different times of day, with different store arrangements might draw different customers, even if the stores are located close together. The key is to know the demographic profile of the target consumer, to continue to foster brand loyalty even during trying economic times -- especially if the store's core consumers are young people hard-hit by unemployment and the recent recession.

Statistical analysis: Validity and reliability

This Starbucks, in an attempt to gain a better sense of its demographic profile, disseminated surveys to 20 consumers in the store. The personalized, hands-on nature of the questionnaire was preferred over an Internet format to maximize the survey's validity. Individuals randomly selected to participate and given a 'log-in' IDs on their printed store receipt might breeze through the survey online, simply to collect rewards points or the prize offered in exchange for completing the survey. But to ensure reliability, the ability for the results to be reproduced in a consistent fashion, still demands a wider dissemination of questionnaires.

Demographic information about the respondents, including any relationship to Starbucks employees, was solicited, along with respondent's ages and income levels. The preferred size of the beverages typically consumed by the patron, frequency of visiting, and method of visiting (drive-in vs. walk-in, and drinking inside the cafe vs. getting take-out) was also solicited to determine the consumer's demographic profile.

Steps needed to minimize these challenges

Additional research is needed to construct a truly valid and reliable study. Firstly, to enhance the validity or truthfulness of the results of a study that attempts to paint a portrait of Starbucks customers, input from customers at different times of day must be solicited, at different days of the week. The current sampling could provide an inconsistent portrait of the store's holistic consumer base. Responses should be grouped according to what time of day the questionnaires were received from the customers, and the customers should have to turn in the survey at the store before they leave, rather than send it in. Reliability can be tested by using a larger sampling size.

General response types

The survey's questions fell into several categories. Some of the questions pertained to… [END OF PREVIEW]

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