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03/27/2012

Dissertation Chapter 3 - Consumer's Perception towards Starbucks Coffee and McDonald's McCafé Marketing Strategies in Hong Kong: Comparative Research Study


Consumer's Perception towards Starbucks Coffee and McDonald's McCafé Marketing Strategies in Hong Kong: Comparative Research Study

CHAPTER THREE: RESEARCH METHODOLOGY

Methodology Overview

            The descriptive approach or method of research has been used in the research study employed from gathering and classifying data from selected population as the descriptive type of research stated by Creswell (1994) as the researcher used descriptions and first hand data has been obtained from respondents and there were formulated conclusions and recommendations. Survey questionnaire has been used in this research as there surveyed HK based consumers of certain perceptions on the marketing strategies executed by Starbucks and McDonalds Café. This was in a form of semi-structured questionnaire, good survey tool used in the study. This has been by means of a five point scaling system, Likert Scaling technique upon ranking of survey questions in a statement like formation. Thus, data medium has been put into comparison and evaluated through SPSS statistics domain. Respondents were being chosen through research sampling as picked over types of probability sampling and have made the survey faster and easy. Sampling was done on places where human traffic is evident such is HK shopping malls and bus/train stations.  There was also secondary research being conducted that comprises of research reports, newspaper, magazine and journal/article contents, Starbucks and McDonalds Café information, releases and some relevant statistics adhering to strategies used by the two into the HK market stature. There have been findings from articles, journals and books in lieu to data analysis assimilation as related to issues of marketing, strategies and such principles behind consumer perception of HK coffee industry as well as promotions and some advertising nature. The outcome assessment as well as interpretation has been conducted in a qualitative manner of approach. The survey data has been presented by means of descriptive/inferential statistics along propositions as identified as supported by tables, illustrations and charts as there represented research findings and outcomes placed by primary research. Research has been only limited to imperative information that respondents have disclosed in such respondents’ capability in answering to survey statements/questions.

The descriptive method is advantageous due to its flexibility as the method can use either qualitative or quantitative data or both, giving the researcher greater options in selecting the instrument for data-gathering. The aim of the research is to determine the role of personality questionnaire in human resource processes as well as the advantages and disadvantages of using psychometric testing in the recruitment and appraisal of employees; the descriptive method is then appropriate for this research since this method is used for gathering prevailing conditions.  For this research, two types of data were gathered. These included the primary and secondary data types. The primary data were derived form the answers the participants gave during the survey process. The secondary data on the other hand, were obtained from published documents and literatures that were relevant to the questionnaire. With the use of the survey questionnaire and published literatures, study took on combined quantitative and qualitative approach of research. By means of employing this combined approach, the researcher was able to obtain the advantages quantitative and qualitative approaches and overcome their limitations. Measurement, numerical data and statistics are the main substance of quantitative instruments. With these instruments, an explicit description of data collection and analysis of procedures are necessary. An approach that is primarily deductive reasoning, it prefers the least complicated explanation and gives statement of statistical probability. The quantitative approach is more on detailed description of phenomenon. It basically gives generalization of the gathered data with tentative synthesized interpretations.

Moreover, no manipulation of the research setting is necessary with this method; rather than employ various research controls such as in experimental approaches, the qualitative data gathering methods are only centered on understanding the occurring phenomena in their naturally occurring states. Aside from these advantages, researchers use qualitative data-gathering tools as some previous researchers believe that qualitative data are particularly attractive as they provide rich and well-grounded descriptions and explanations as well as unforeseen findings for new theory construction. One of the notable strengths of the qualitative instruments is that they evoke a more realistic feeling of the research setting which cannot be obtained from statistical analysis and numerical data utilized through quantitative means. These data collection methods allow flexibility in conducting data gathering, research analysis and interpretation of gathered information. In addition, qualitative method allows the presentation of the phenomenon being investigated in a more holistic view. 

Participants

            In order to determine whether marketing strategy based questionnaire does play an important role in conducting comparative research for Starbucks and Mc Café in accordance to consumer perceptions, HK consumer based context, total of 100 respondents were asked to participate in the survey as certain inclusion criteria were imposed. The participants qualified for sample selection must be 18 years old and above as there ensures that the participants understand the nature of survey questionnaire, making the survey statement items easy for them to comprehend as well as accomplish.

Random sampling was done for the sample selection. This sampling method is conducted where each member of population has an equal opportunity to become part of the sample. As all members of the population have an equal chance of becoming research participant, this is said to be the most efficient sampling procedure. In order to conduct this sampling strategy, the researcher defined the population first, listed down all the members of the population and then selected members to make the sample. This method involves the selection of the sample at random from the sampling frame through the use of random number tables (Saunders, Lewis & Thornhill, 2003).

Instrumentation

The survey questionnaire was used as the main data-gathering instrument for this study, were divided into sections: profile and the survey proper. The profile contains socio-demographic characteristics of the respondents such as age, gender, civil status, education level as well as income if there is any. The survey proper explored the perceptions of HK coffee consumers with regards to marketing strategies imposed by Starbucks and mc Café in HK on the perception oriented questionnaire, particularly on its usability and reliability as effective methods tool. The questionnaire proper section contains statements/questions that identify perceptions of known and evidenced based marketing strategies of both coffee shops in HK; this will be placed in a comparative table, two sets of statements survey form one for Starbucks and the other is for Mc Café respectively, as being structure using the Likert format. In survey type, five choices are provided for question/ statement. The choices represent the degree of agreement each respondent has. The Likert survey enabled the respondents to answer the survey easily. After the questions have been answered, the researcher asked the respondents for any suggestions or any necessary corrections to ensure further improvement and validity of the instrument. The scale below was used to interpret the total responses for the survey, by computing weighted mean:

Range                                                Interpretation

4.01 – 5.00                                       Strongly Agree

3.01 – 4.00                                       Agree

2.01 – 3.00                                       Neutral

1.01 – 2.00                                       Disagree       

0.00 – 1.00                                        Strongly Disagree

HK CONSUMER PERCEPTIONS ON STARBUCKS MARKETING STRATEGY

No

STATEMENT ITEMS

1

2

3

4

5

1

Relationship Starbucks has with its coffee growers. Starbucks fosters these relationships by paying premium price for its coffee, as well as through its commitment to social and environmental issues in countries where the coffee is grown

 

 

 

 

 

2

Successful companies appreciate that one of the important distinctions between business transaction and a true relationship is trust and they expend tremendous energy developing ways to “institutionalize” that trust in their procurement processes

 

 

 

 

 

3

Consequently, as they are doing with customers, top-quartile companies are climbing a relationship ladder with suppliers, moving from isolated, arm’s-length transactions for products and services to bundled and integrated offerings to, ultimately, strategic partnerships in which suppliers assume responsibility and accountability for successful business outcomes

 

 

 

 

 

4

The customer’s relationship with Starbucks is taken into account when the company considers new product offerings to expand the brand. Starbucks has found that customers will “give it a license” to expand into different products or channels as long as it has first established a core relationship in the store

 

 

 

 

 

5

The customer has to be able to see the connection between the new product or service offering and the core essence of the Starbucks brand. For example, customers did not embrace ice cream flavors that had no connection to coffee

 

 

 

 

 

6

Recently introduced “Starbucks Card stored-value card looks as if it is on its way to being accepted by consumers and partners because it eliminates the need for cash and credit cards, thus speeding transactions during busy times. The card also provide foundation for a loyalty platform in the future

 

 

 

 

 

7

The Frappuccino episode underscores the importance of the customer relationship to Starbucks’s business. Starbucks considers its product to be not coffee, but the “coffeehouse experience,” whether that experience is in the coffeehouse itself or replicated elsewhere. “We’ll rarely talk just about the product,” says Ms. Gass, vice president of beverage. “Starbucks is a place that allows the customer experience to happen. Things in the store are just props to the experience”

 

 

 

 

 

8

Keeping the customer’s desires and expectations firmly in mind is tactic characteristic of successful companies, more than two-thirds of the top-quartile firms we surveyed devote primary organizational focus to meeting customer expectations and extending long-term customer relationships

 

 

 

 

 

9

Making connection with customers at the store level is a key component of Starbucks’s strategy, and particular emphasis is put on the relationship the customer has with the barista. Each barista receives 24 hours of training in customer service and basic retail skills, as well as “Coffee Knowledge” and “Brewing the Perfect Cup” classes. Baristas are taught to anticipate the customer’s needs, and to make eye contact while carefully explaining the various flavors and blends

 

 

 

 

 

10

Starbucks also enhances the customer relationship by soliciting feedback about patrons’ experiences with Starbucks. Once week, the leadership team at the SSC reads through raw, unedited customer comment cards. “Sometimes it can be shocking to hear what they have to say, but it brings us directly to the level of the customer,” Ms. Giuntini says. “At the corporate level, it is easy to get disconnected from the customer”

 

 

 

 

 

HK CONSUMER PERCEPTIONS ON MCDONALDS’ CAFÉ MARKETING STRATEGY

No

STATEMENT ITEMS

1

2

3

4

5

1

McDonald's is not specifically targeting Starbucks, McDonald's wants customers to associate its famous "Mc" prefix with fancy coffee

 

 

 

 

 

2

McDonald's coffee initiative, a direct threat to Starbucks, though it's also an expensive risk for the fast-food giant. McDonald's drip coffee is awful

 

 

 

 

 

3

McDonald's new $100 million marketing campaign focuses on its McCafe line of espresso drinks with the message that its a quality, affordable option to more expensive gourmet coffee like Starbucks, the Associated Press reports

 

 

 

 

 

4

Starbucks going after McDonald's for quite some time. Starbucks weakened their brand over the past few years and they are now seeing the consequences

 

 

 

 

 

5

Mc Cafe has the best lattes, iced coffees, and the best hot cocoa, which they call a cocoa steamer

 

 

 

 

 

6

One thing that makes McCafe taste good to me is that the baristas take the time to pull the shots properly

 

 

 

 

 

7

The recession has been good to McDonald's. As consumers trade down to cheaper, faster food on the go, McDonald's has kept up its growth during the downturn. Same-store sales rose 4.3% for the quarter that ended March 29. Profits were up 4%, to $980 million

 

 

 

 

 

8

McDonald's has been steadily introducing lattes, cappuccinos and mochas in individual markets across the country. Some 80% of the company's stores now sell these drinks, and this week McDonald's will roll out national advertising campaign trumpeting the McCafé section of its menu

 

 

 

 

 

9

Given the company's pricing history and the likelihood that the McCafé system will be quicker than Starbucks baristas, consumer sentiment is trending its way

 

 

 

 

 

10

It doesn't matter whether Starbucks of McDonald's produce better or cheaper cup of coffee. Perception is everything and McDonald's will win this coffee battle hands down

 

 

 

 

 

Data Analysis

After gathering the completed questionnaires from the respondents, total responses for each item were obtained and tabulated. In order to use the Likert-scale for interpretation, weighted mean to represent each question was computed. Weighted mean is the average wherein every quantity to be averages having certain corresponding weight. The weight does represent the significance of each quantity to the average. To compute for the weighted mean, each value must be multiplied by its weight. Products should then be added to obtain the total value. The total weight should also be computed by adding all the weights. The total value is then divided by the total weight.

Ethical Considerations

The consideration of ethical issues was necessary for the purpose of ensuring the privacy as well as the safety of the participants. Among the significant ethical issues that were considered in the research process include consent and confidentiality. In order to secure the consent of the selected participants, the researcher relayed all important details of the study, including its aim and purpose. By explaining these important details, the respondents were able to understand the importance of their role in the completion of the research. The respondents were also advised that they could withdraw from the study even during the process. With this, the participants were not forced to participate in the research. The confidentiality of the participants was also ensured by not disclosing their names or personal information in the research. Only relevant details that helped in answering the research questions were included. 

Assessing the Coffee Shop Consumer

The researcher conducted HK based consumer survey, with 100 respondents, survey involved respondents from dine in coffee shop consumers, involved respondents from mall goers as well as bus/train stations. Random sampling was used in selecting the respondents for the survey done in Starbucks and Mc Café from HK locations such as Kowloon, respondents from coffee shops were asked to complete the survey. Field work was done at different times of the day, from morning, to afternoon and evening. However, responses given in the survey did not particularly pertain to the specific time that they were in the coffee shop at the time the survey was conducted. The objective of the market surveys was to capture consumer behavior of dine-in coffee shop customers, and those that were not in coffee shops at the time of survey.

Coffee taste test, example survey

In coffee taste run by Consumer Reports magazine in February 2007 McDonald’s, Starbucks’ and Dunkin Doughnuts’ coffee was tested. The magazine proclaimed that McDonald’s beverage was the cheapest and the best (McDonald′s java beats Starbucks, Dunkin′ Donuts, 2007). Also in Feb 2007 marketing powerhouse Brand Keys’ latest Customer loyalty survey looked at Dunkin’ Donuts and Starbucks. The result was that the former one edged out Starbucks for the first time. A reason might be the increased level of automatic machines and bagged coffee at Starbucks which leads to a loss in uniqueness. Customers can’t observe anymore how the coffee is handmade in front of them.

 

 

 

 

 

 

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