Dissertation Chapter 1 - Consumer's Perception towards Starbucks Coffee and McDonald's McCafé Marketing Strategies in Hong Kong: Comparative Research Study
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Consumer's Perception towards Starbucks Coffee and McDonald's McCafé Marketing Strategies in Hong Kong: Comparative Research Study
CHAPTER ONE: INTRODUCTION
Background of the study
Coffee drinking, in HK homes, offices, schools as well as casual outside coffee drinking in Hong Kong has turned out to be as common practice as dining as illustrated by the proliferation of coffee shops all around the metropolis and its outskirts, the increased sales of instant coffee variants. More and more people are learning to appreciate coffee drinking not just as an “after dining” practice or morning ritual, but as part of emerging HK lifestyle. Coffee has become convenient and easily available drink. Increased sales of instant coffee and coffee beans and the proliferation of coffee shops have contributed to the growth in coffee sales in both retail and foodservice outlets. Research towards consumer perception of certain marketing strategies of Starbucks and McDonalds Café as there explore as to how coffee business marketing strategies drive competitiveness of the two companies as taken from the perspective of the consumers
Perceptions of Hong Kong consumers will be investigated. Starbucks Coffee and McDonald's McCafé both belongs to food and beverages retailing industry. Food and beverage products are developed and marketed to appeal to the preferences of the consumers and to stimulate sales. The marketing environment of such industry capitalizes on the purchasing power of the public hence the high specifications of marketing strategies, tactics and messaging. The using of patterns and advertising exposure as well as the range of marketing vehicles and venues used by companies to reach the consuming public with advertising and marketing messages contribute to rate and frequency of spending of the consumers. More specifically, the coffee retailing industry is a thriving business in Hong Kong. At most, giant coffee chains had shaped an acceptable coffee culture in the place. Hong Kong coffee-drinkers believed that coffee from large international chains is of better quality and provide greater choice (Patton, 2006). In fact, there are 22 McCafés and 62 Starbucks outlets in Hong Kong alone. Along with Pacific Coffee and Delifrance, Starbucks Coffee and McCafé will continue to serve the best quality coffee in Hong Kong.
The competitiveness of the two corporations is a good area to examine on how they are going to cope with each company’s strategic marketing moves and their impact on competitiveness and profitability of each other. With this said, the study will investigate the different marketing strategies inherent to Starbucks and McCafé. With taking the differences and similarities of these strategies each company employs, the problem to be explored in this research is to what extent marketing strategies provides competitive advantage to Starbucks and McCafé in Hong Kong. Furthermore, the study also seeks to address the issue of how important selling strategies are in building brands, creating market share and meeting customer requirements.
Two key research questions are:
- What are the marketing strategies that Starbucks and McCafé employ?
- How do Hong Kong consumers perceive these marketing strategies?
Specifically, the research will try to answer the following questions:
- What are the similarities and differences of the marketing strategies of the two coffee giants?
- Which marketing strategies are more direct to customers? In what specific ways?
- Which marketing strategies are more advantageous – Starbucks’ or McCafe’s, as according to the consumers?
- Why those Hong Kong consumers are perceive the marketing strategies of one coffee retailer over the other?
- What shapes or influences the perceptions regarding the marketing strategies of either Starbucks or McCafé?
This study will focus mainly on perceptions of Hong Kong consumers on the marketing strategies Starbucks and McCafé implemented in the region. Starbucks and McCafé are two giant coffee retailers which remain to be significant players in Asia Pacific region including Hong Kong. The main aim of this study is to explore the marketing strategies prevalent in coffee retailing industry in Hong Kong through a comparative study of Starbucks and McCafé. The following are the objectives of the study:
- To identify the marketing strategies of Starbucks and McCafé and evaluate their differences and similarities
- To assess whether these marketing strategies are providing the companies the competitiveness, profitability and market share
- To analyze the various perceptions and its indicators of Hong Kong consumers about the marketing strategies of the two coffee giants
Scope, Limitations and Significance
Marketing purports to build a lasting customer relationship. As such, marketing evolves from a process centered towards becoming influence-driven which complicate marketing designs and concepts in effect. Marketing necessitates that firms must be equipped with marketing plans and strategies that are data-driven, analytically-based and comprehensive to achieve competitive advantage. Customer perception, on the other hand, primarily defines the quality of the products and secondly, the pricing scheme. Customer perceptions are a key consideration in achieving the objective of quality leadership and price leadership as well. Customer perception is simply the awareness, and in this context, customer perceptions of the marketing strategies will be explored. Starbucks and McCafé is relatively a preferred when doing comparative studies as the dynamics and nature of two corporations are worthy to be compared and draw upon them information that could inform new insights about a phenomena.
Nevertheless, there is no publicly known comparative study that explores the marketing strategies of the two companies with customer perceptions as its main ground, specifically in Hong Kong. This study will be of significant importance to the marketing literature as it will present an in-depth understanding of how marketing strategies move along with coffee retailing industry and with that of customers’ requirements. The evaluation of strategic marketing internal to Starbucks and McCafé from the perspectives of the consumers will be relevant to identify with the challenges, risks and threats faced by coffee retailers and how it could likely be developed. As such, the completion of this research will provide understanding of the concepts presented so as to generate data and information that every organization could use in order to come up with plans and designs that will strategically position them in the highly competitive, diverse, and complex business environment that is experienced at present.
The descriptive approach or method of research will be used for the completion of this study. The researcher finds this the most appropriate approach as this study would mainly employ gathering and classifying data from the selected population. This type of research also utilizes observations in the study. To illustrate the descriptive type of research, proponent Creswell (1994) states that the descriptive method of research is to gather information about the present existing condition. The purpose of employing this method is to describe the nature of a situation, as it exists at the time of the study and to explore the causes of the particular phenomena. The researcher opted to use this kind of research considering the desire of the researcher to obtain first hand data from the respondents so as to formulate rational and sound conclusions and recommendations fro the study.