Visit www.pearsonglobaleditions.com/malhotra to read the video case and view the accompanying video. Starbucks: Staying Local While Going Global Through Marketing Research describes how Starbucks has gathered useful feedback and marketing research information from customers, leading to the introduction of several successful new products and penetration into new global markets. The case can be used to discuss the various benefits and limitations of descriptive research and particularly the use of both survey and observation methods. Specific marketing research questions on this and the previous chapters are posed in the video case.

Named after the first mate in the novel Moby-Dick, Starbucks is the largest coffeehouse company in the world. As of 2014, it had more than 18,000 stores in over sixty countries. The company's objective is to establish Starbucks as the most recognized and respected brand in the world. It expects to achieve this by continuing with rapid expansion of retail stores and growing its specialty sales and other operations. It will also continually pursue other opportunities to leverage the Starbucks brand through new products and new distribution channels that meet consumer needs determined by marketing research. Over the last two decades, Starbucks has revitalized the coffee industry. The inspiration behind Starbucks was conceived when CEO Howard Schultz visited Italy. At that time, Starbucks was a coffee company, and people were very passionate about the coffee, but in Milan, Howard saw the passion around the coffeehouse experience. In Milan, Howard went from one espresso bar to the next and saw how people at the coffeehouses knew each other. These people were getting their daily coffees, but they also were making daily connections with other people, with the baristas, and with the artistry; the folks making the drinks were connecting with their customers and knew them personally. From this experience, Howard recognized that although Starbucks was passionate about the coffee, it also had the opportunity to be equally passionate about the coffeehouse experience.

Marketing research determined four strategic pillars for expressing the Starbucks brand. The four pillars are (1) the coffee, which is Starbucks' foundation and which gives Starbucks its credibility; (2) some of the finest products that are associated with the coffee experience; (3) the warm, welcoming, and inspiring environment; and (4) community involvement. Even though the coffee and the products are important, the key to Starbucks' success has been the latter two. It has designed an environment that is warm and welcoming and provides an experience that makes the company a part of the community or local culture. It has been able to achieve this success by emphasizing the Starbucks culture.

Starbucks also draws upon customers for ideas by conducting extensive marketing research. Many of its products and services are a direct result of suggestions from patrons or local employees. Much more than most companies, consumers touch and influence the corporation. Many innovations and retail items resulted directly from customers' feedback obtained by conducting marketing research and by suggestions made to the baristas. From customized CD music collections to sales of sandwiches, gums, and chocolates-all were a result of customer recommendations. Many stores even offer wireless Internet access in response to customer demand. Through its baristas, Starbucks found that people were interested in an iced Starbucks drink and a blended Starbucks drink, and thus the Frappuccino was born-an idea that came from customers and the baristas rather than corporate headquarters.

This local connection with customers and the consequent brand building have allowed Starbucks to move into other successful venues-from coffee bean sales at grocery stores to partnership with United Airlines, Marriott, Pepsi, Kraft, and others. Starbucks has some of the best coffee in the world, but it was missing from grocery stores, which is where most coffee is purchased. Syndicated data from The Nielsen Company showed that grocery stores sell two-thirds of the coffee in the United States, and Starbucks has been able to enter this lucrative market. It has also used partnerships in other industries to increase revenue.

In the past few years, Starbucks has been aggressively expanding its global footprint by entering newer markets and strengthening its position in countries in which it already has a presence. Growing a brand overseas, however, can be different from doing so in Starbucks' home market. According to Thomas Yang, former senior VP of International Marketing, this difference in growthbehavior in different countries can be attributed to Starbucks' different stages of development in the United States and different parts of the world. In international markets, Starbucks is at the brand development and establishment stage, allowing consumers to discover what the brand is about and what the Starbucks experience is about. In contrast, Starbucks has had a presence in North America since 1971. In the United States, the Starbucks experience is pretty well-known and understood, and thus it is in a different stage.

Starbucks has been extremely successful in achieving its objectives. It has been able to maintain a local feel despite massive growth around the globe. It has done this by stressing its culture and placing the focus on its employees and customers through marketing research. Starbucks hopes to continue staying local while going global through marketing research.

Conclusion

Starbucks has gone from a small local coffee startup in the 1970s to the largest coffeehouse company in the world. This success has largely been due to the strong connection it has been able to foster with its consumers and to maintaining a local charm and feel in its stores even as it continues to expand globally at breakneck speed. This strong connection has also enabled Starbucks to gather useful feedback and marketing research information from customers, leading to the introduction of several successful new products and penetration into new global markets.

Questions

1. Use the Internet to identify secondary sources of information pertaining to coffee consumption in the United States. What insights into coffee consumption can be obtained from social media research?

2. What are consumers looking for in a coffeehouse experience? How do they view the Starbucks coffeehouse experience? How can Starbucks determine answers to these questions?

3. A survey is to be conducted to determine the image coffee drinkers have of Starbucks and other coffee chains. Which survey method should be used and why?

4. Starbucks is thinking of introducing a new gourmet coffee with a strong aroma. Can a survey be used to determine the consumer reaction to this coffee prior to national introduction? If so, which method should be used?

5. Starbucks is thinking of introducing a new gourmet coffee with a strong aroma. Can the observation method be used to determine the consumer reaction to this coffee prior to national introduction? If so, which observation method should be used?