Applied Consumer Behaviour

Starbucks Dunkin Donuts Caffe Nero

By : Camille Alexandra G. Del Rosario Cristina Milev Duarte Parente 1

Index
1. Choose one sector and describe the main companies of the sector. Describe the brand positioning of three competitors that you choose. Choose brands with different positioning and describe the differences. . 3
Dunking Donuts ..................................................................................................... 3 CaffeNero .............................................................................................................. 3 Starbucks brand .................................................................................................... 3

2. Describe the perceptual process used by the three companies, focusing on the stimuli they use (give examples) and the responses that the company is looking for. .......................................................................... 4
Dunkin Donuts ....................................................................................................... 4 Caffe Nero ............................................................................................................. 4 Starbucks .............................................................................................................. 5

3. Motivation, values and lifestyle of consumers in that sector .............. 6

Maslows Hierarchy of needs: which levels and explain why? ............................... 6 Major motives for consumption ( Ernst Dichter ) .................................................... 7
Reward .............................................................................................................................. 7 Social Acceptance ............................................................................................................. 7 Power masculinity .............................................................................................................. 7 Feminity ............................................................................................................................. 7 Magic mystery ................................................................................................................. 7

Describe the levels of consumer involvement ........................................................ 7 Which are the consumer values generated by the experience of buying this products/brands? Explain why? ............................................................................. 8
Efficiency ........................................................................................................................... 8 Excellence ......................................................................................................................... 8 Status ................................................................................................................................. 9 Self-esteem ........................................................................................................................ 9 Ethics ................................................................................................................................. 9

4. Values ....................................................................................................... 9
ABC Model of Attitudes: explain which hierarchy of effects is more suitable to your sector and brands. Explain the whole process ....................................................... 9 Forming attitudes: which theory fits better to your sector and brands ................... 10

1. Choose one sector and describe the main companies of the sector. Describe the brand positioning of three competitors that you choose. Choose brands with different positioning and describe the differences.
We chose the Coffee shop sector that primarily serves prepared coffee or other hot and cold beverages as well as light snacks such as donuts, pastries, sandwiches and salads. The three companies that we chose are Dunkin Donuts, Starbucks, and Caf Nero. Dunkin Donuts is the world's leading baked goods and coffee chain, serving more than 3 million customers per day. Dunkin' Donuts sells 52 varieties of donuts and more than a dozen coffee beverages as well as an array of bagels, breakfast sandwiches and other baked goods. They are also America's largest retailer of coffee-by-the-cup, serving nearly 1.5 billion cups of brewed coffee each year. Caff Nero is an Italian-style coffee shop chain primarily based in the UK. It was founded in 1997 in London as the Caffe Nero Group by Gerry Ford. Currently, the company runs more than 420 shops nationwide and has expanded its operations into locations such as Turkey and the United Arab Emirates. Starbucks Corporation is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 55 countries, including over 11,000 in the United States, over 1,000 in Canada, over 700 in the United Kingdom, and over 150 in Turkey. Starbucks sells drip brewed coffee, espresso -based hot drinks, other hot and cold drinks, coffee beans, salads, hot and cold sandwiches and panini, pastries, snacks, and items such as mugs and tumblers.

Dunking Donuts Dunkin Donuts focuses on Quick Quality that creates freshly made food and beverages that is served quickly for people who have busy lives. The cafe is an allday stop for coffee and baked goods that are delicious and easy for consumers to go to whenever they need it. It is also affordable, down-to-earth and a place that has no pretense. It is a coffee shop that positions itself as serving more choices of best-inclass menu items that will be sweet and easy for anyone. CaffeNero Premium Italian coffee, a warm and welcoming atmosphere. Good food and great personal service. Provide the customers with a coffee house atmosphere: cosy and friendly. Caffe Nero should be a place for a neighborhood gathering spot: feeling comfortable meeting friends, working on the laptop, grabbing a bite to eat or just somewhere to relax and read the paper Starbucks brand Starbucks works in the third place where you want to hang out, relax, or work besides your first place (your home) and your second place (your work). By doing so, Starbucks is competing not only with coffee shops but also with bookstores, bars, restaurants, parks and libraries. Starbucks has been differentiating itself not just on the quality of its coffee, but also on selling an experience. That make this company a place to hang out, relax or work. All this can justify the care of Starbucks about the music, the environment and even the drink names.

2. Describe the perceptual process used by the three companies, focusing on the stimuli they use (give examples) and the responses that the company is looking for.

Dunkin Donuts Dunkin Donuts uses different Marketing stimuli. Every Dunkin Donut Caf can be distinguished and identified even if you are miles away with just seeing the colors. This is because Dunkin Donuts uses bright colors such as orange and Pink as the design of their store outside as well as inside the store. They use their trademark colors to be able to attract the eye of commuters going to work or doing errands. They want their caf to stand out from other cafes that surround it as a response people will choose to go in their caf rather than others. The outdoor advertising using posters of Bagels, donuts and coffee is to persuade commuters to impulse buy food or beverages in Dunkin Donuts.They have lights that are bright to be gives the feeling of excitement for people on the go and have a good experience buying. The sounds in Dunkin donuts have a very different feel because they play mostly popmusic that makes them want the customers feel that it is distinct from Starbucks and not a laid back place to sit down and stay for hours. In every caf there is a display of its fresh baked goods (donuts) and workers make espresso drinks face-to-face. Customers which are able to see and smell the coffee and the donuts will have a response of feeling hungry and thirst for a cup of coffee. Caffe Nero When people enter the store, all the products are displayed in front of the customer in order for them to visually see and make a choice. Even if they come only to buy a coffee, by showing the prepared products, customers will create a sense of appetite and buy more. When there is somebody ordering a coffee, customers can hear the coffee machine running simultaneously with the sound of the coffee machine, they can smell the fresh baked coffee. This will again create a sense of appetite. People who are not ordering anything but just come inside to accompany a friend or to buy a snack will have the urge to purchase a coffee. After the customers decided what they want to buy, they consume their purchase and can have the feeling of wanting more. Because of the atmosphere Caffe Nero offers: cozy and welcoming feeling, people have the tendency to stay longer and to buy more products after a while, because they get hungry or thirsty, again. The response that the company wants after using the stimuli process is of course the increase of sales, but also and that is maybe more important is building a relationship with the customer. A loyal customer will always come back to the store; while only have an increase of sales of month, means not that it will also occur in the future. But with loyal customers, you know they will come back because they like the products, store, the service and the atmosphere. 4

Starbucks Market stimuli Ex. You pass Starbucks and are attracted by the aroma of coffee and chocolate muffins. Smells (aroma of coffee, chocolate muffins, hot bread/sandwich) Tastes (intensity and quality of the coffee) Vision (Stores layout and products design) The perceptual process goes from the sensation to perception. In Starbucks they try to drive costumers sensations not just by their products quality of smells, tastes and vision, but also by the whole atmosphere and environment surrounding the purchase of coffee: the openness of its store space, the attractiveness of its packaging, friendly and knowledgeable service, appealing menu boards, the quality of lighting, the texture of the walls and the cleanliness. For Starbucks, the coffee business is much more than just selling coffee. By doing so, Starbucks is not only stimulating peoples senses. This company is, as well, differentiating itself among the huge range of stimuli that people are exposed to. This will allow them to get higher chances to be considered in the perceptual selectivity stage. Interpretation is a subjective concept. It depends on the individual and on time. Symbolism in Starbucks also plays an important role. Specifically talking about their logo, we can see that it is suffering a continuous evolution across times and is according their consume characteristics in each period for each costumer.

Original brown logo, used from 19711987.

Green logo used from 1987-2010, still being used as a secondary logo.

Redesigned logo used from 2011-present. To the consumer point of view, this siren is a muse, caring a lot of intangible aspects besides coffee: mysticism, history and desire. It might mean more different aspects depending on the one who sees her, but a fact is that she is inside all those logos since the company creation until nowadays, carrying at least brand recognition. All in all, every time we see this logo we say: Starbucks! In 2011 they have even removed letters/words, since nowadays we know it only through the image, in the same way that we know the meaning of a traffic signal. 5

The response into all this process is translated into thirst and hunger, need for good time, hang out, good work environment, quality time and experience fulfillment.

Perceptual Map of Starbucks and It's Competitors (Coffee Shop Market) Customer perceptions

(http://blogs.indews.com/marketing/starbucks_competitors.php) When customers respond to the stimuli, it is a classical conditioning theory, which focuses on visual and olfactory suggestions that induce hunger or thirst. It is an irrational behavior, which we cannot control. It just happens when it happens, but we can try to control these stimuli by using them in the purchase stadium.

3. Motivation, values and lifestyle of consumers in that sector

Maslows Hierarchy of needs: which levels and explain why? The coffee branch is stated in the first level of the hierarchy, psychological needs. The needs are literal requirements for human survival. If these requirements are not met, the human body simply cannot continue to function. If people on the way to work are thirsty and they want instead of water a coffee, they just go the Starbucks, Dunkin Donuts or Caffe Nero. After entering the store and the stimuli are inserted well, the induce of hunger appear as well.

Major motives for consumption ( Ernst Dichter )

Reward After a long day of work, people are getting exhausted and, tired. They want to have a break, to relax and dont think about work. They go to a coffee house, order a coffee or tea and just sit and talk with colleagues or friends. In order to reward themselves after a long day, they also buy a muffin, donut or cookie. Social Acceptance Coffeehouses largely serve as centers of social interaction: the coffeehouse provides social members with a place to meet, talk, write, read, entertain one another or pass the time, whether individually or in small groups. Power masculinity A cup of coffee is what millions us rely on to kick-start the day. When people are on the way to work and they feel like they are not really up. They go to a coffee shop and buy a coffee. Researchers now believe each one boosts the effect of the other on brain functions such as attention span and working memory. But its likely that coffee lovers who do not take sugar can have the same effect by enjoying a snack with coffee.
Read more:http://www.dailymail.co.uk/health/article-1333202/Drinking-coffee-sugar-boosts-brainperformance.html#ixzz1eRcYK3YA

Feminity Women sit together and interact and talk to friends with a nice cup of coffee or tea. If the place is cozy, warm and creates the feeling of home, women are tended to stay longer and can interact with each other for hours. They will also tend to purchase something more than once, for example they want a cappuccino and because they all stay longer after finishing the cappuccino they go over to a smoothie or maybe even something to eat because women dont like to eat alone, the whole group would purchase then something to eat. Magic mystery Caffeine has potential benefits for the maintenance of proper brain functioning. It has a positive effect on cognition, memory performance and the ability to complete complex tasks. Describe the levels of consumer involvement The Cognitive Involvement for coffee shops would not really fit as one type of consumer behavior since people are not really motivated to learn all he/she can about a product unlike for example an electronic device or a car where people would first get information and learn about the features and applications of these products. People go to coffee shops to drink coffee and it does not require mental information about the product.

The Product involvement in the coffee shop sector has a high product involvement in how much time, thought, energy a person gives to the purchase a coffee and snack. This is what reasons people have for going to a coffee shop and motivates them to purchase a coffee. It may have high involvement in ways such as going to a specific or particular coffee shop every morning since it is a routine for a person to grab a coffee before going to work. Another example is people or students who go to Starbucks or caf Nero to use the internet and study or read a book. Also people who go to a coffee shop because, their friends want to hang out and talk in a specific caf. The Message Response Involvement of the coffee sector can be in different ways. One is through television commercials that want to send a message to their consumers. An example is for Dunkin Donuts, they have commercials on people from different backgrounds and different jobs having a coffee and beverage from Dunkin donuts that wants to show that Dunkin Donuts should be part of the daily routine and life style of the people. It also shows a message than Dunkin is for people on the go or on the run Example Commercial for Dunkin Donuts: http://www.youtube.com/watch?v=ShWp1IbRKQE&feature=player_embedded The Ego Involvement for going to a coffee shop is the importance on a product to a consumers concept. There is high involvement when it comes to this motivation since people go to coffee shops not only for the coffee but for what they feel about the place and the experience. People go to Starbucks because they want to relax and have an experience unlike in Dunkin Donuts people feel like going to that caf is because they know they are in a rush and they want a simple coffee and a cheap coffee. People who go to Starbucks and Caf Nero is a status symbol because it is like people who buy or go there are stylish and cool. Which are the consumer values generated by the experience of buying this products/brands? Explain why? Efficiency The consumer doesnt need to prepare his coffee or food at home. It is more convenient while walking to the workplace, to stop by a coffee house and purchases his food and beverages. Since efficiency is also a core value for the coffee houses, it will not take too long before the consumer got his/her purchase. Excellence At the coffee houses we mentioned in this case, all the food and beverages is at his highest quality. People who are visiting these coffee houses have this in mind when do a purchase at these stores. They could also go to an other place to buy their coffee or food, for example a grocery store, where they also have prepared food and coffee to go. But because they choose quality rather than price

Status When consumers buy something from a coffee house, for example a coffee to go, people will always see the logo of the coffee house. Starbucks has a kind of status for a lot of people, and they rather go to Starbucks for the status then to Dunkin Donuts or Caf Nero because of the lower prices. Self-esteem When buying something at a Starbucks store, you can give your card and you will get credits on it. When you have enough credits you can choose something from their products. For example a mug, cup or a gift box. People buy from Starbucks not especially for the coffee or the goods purchased but more focused on collecting different items from Starbucks that gives them a sense of self esteem. . Ethics All the coffee houses are aware of the impact on the environment. They all do the best possible things that benefit the planet. For example they all alert their customer to recycle the trash, so that used materials can be transformed into new products.

4. Values
ABC Model of Attitudes: explain which hierarchy of effects is more suitable to your sector and brands. Explain the whole process We have differentiated the sector to the brands weve chosen. One important reason for that is to better understand what our brands are in this sector and what for importance it makes here. First of all, the sector. Coffee is a product we can buy it everywhere. It is a product that consumers cannot imagine to live without it anymore. For some consumers coffee taste everywhere the same, they dont prefer one coffee brand over another. Thats why we chose for the Low-involvement Hierarchy. As explained down below.

This hierarchy process is based on good or bad experiences. Beliefs directly influence behavior, which in turn generates feelings. People choose to go to a coffee house, without thinking too much about which brand: They can have good experiences with the brand (because the coffee and service is good) but also a bad experience (coffee is bad and the service is poor). The next time they will take this into consideration, when buying a coffee again. 9

We talked about the coffee sector, where consumers do not have a specific preference for a coffee house over another. But when taking into consideration that they had a good experiene, they have already the knowledge about the brand, and maybe in the future will choose for that specific brand. Such as Starbucks, DunkinDonuts or Caffe Nero. Thats why we are going to talk about the Experiential Hierarchy. In this Hierarchy process people choose one brand over another, because there is an emotional response. Their feelings lead to certain behaviors (purchase a coffee rather from Starbucks, DunkinDonuts or Caffe Nero) which furthermore lead us to the beliefs of a certain brand. In this perspective highlights also the idea that attitudes can be strongly influenced by intangible attributed, for example the service that each coffee houses offer.

Forming attitudes: which theory fits better to your sector and brands

10