The Consumer Value Framework (CVF) entails a consumer behavior theory illustrating factors that define consumption-related behaviors and define the value that customers gain from such consumption. The entry of Starbucks into the Chinese market illustrates the capitalization on the importance of products and services that the company offers while considering the peculiarities of the new environment. The value brought by the company was embedded into the strategy of Starbucks when entering China, which entailed not only making money but also making sure that customers can trust the brand and can view it as their own.
The application of CVF entails modifying the available menu by selling food items based on the traditional consumer choices of Chinese people. However, it is also facilitated by means of educating consumers in the new market about the values of the brand and the high-quality products and services that it offers.
The success of entering a new market, as illustrated by Starbucks in China, is two-fold. On the one hand, it is vital to retain current offerings because they communicate the value of the brand and show for what the company stands. Specifically, Starbucks has been dedicated to offering various coffee-based beverages, including an array of seasonal drinks, such as the Pumpkin Spice Latte, which is especially popular in the fall (Laurence, 2020).
On the other hand, it is crucial to meet local market demands to be competitive with national companies. For example, Chinese consumers are used to drinking pearl milk tea, salt soda water, soybean milk, and an assortment of various teas (Vitale, 2017). To appear novel and exciting to Chinese consumers, Starbucks chose to promote the ‘premium coffee drinking experience,’ marketing its stores as social gathering places. However, this did not mean that Starbucks would abandon efforts adjusting to the new market. Instead, the company opened a conversation with the target audience and educated them about the coffee-drinking culture while also studying their taste preferences to form a slightly updated menu.
Word-of-mouth marketing is a strategy entailing consumers’ increased interest in a company’s product or service as reflected in their daily dialogues. In its essence, it is free advertising that is facilitated by customer experiences with the brand (Huete-Alcocer, 2017). This strategy has been highly effective for Starbucks as customers tend to create a sense of community on social platforms, sharing their love for products offered by the brand.
Similarly, word-of-mouth marketing could have been used by Starbucks in China by encouraging the sense of community and creating customer loyalty programs and bonuses for giving their feedback regarding the products and services. Moreover, because Starbucks is a world-renowned brand, it is recognizable to tourists who may visit China as they are already familiar with the menu and may visit the coffee stores. This helps improve brand reputation and recognition, fostering a sense of community of like-minded individuals who share their obsession with coffee.
There are Chinese social media platforms that are highly isolated from the global online sphere, which is why it is essential to create consumer communities around Starbucks. Using these platforms, it is possible to use word-of-mouth advertising for companies where reference groups can share their experiences with Starbucks with other people. As a result, it can create an impression of a highly positive and reputable brand that brings value to customers. An interesting strategy that Starbucks has been using for years is teaching workers to sometimes intentionally spell customers’ names incorrectly so that customers take pictures of their cups and share them on social media, tagging the company. Since social media marketing has shown to be the best strategy of outreach for consumer brands, Starbucks should use the benefits of local Chinese social media and engage users with their help.
Even though the products that Starbucks offers may be aligned with the physiological need identified in Maslow’s Hierarchy, coffee drinking has shown to be more complex than that. First, coffee and other Starbucks drinks fulfill the physiological need of having food and water. Second, the need for safety is met because coffee has a solid association with alertness, as many people rely on coffee to begin their days for a spike of energy or to stay awake during long nights of working or studying. Third, coffee may fill the need for love and belonging because coming to Starbucks entails a social aspect (Samoggia and Riedel, 2019).
Customers usually gather over coffee to socialize, and there is often a sense of unity and community surrounding Starbucks. Fourth, self-esteem can also be improved when customers hold cups from Starbucks and are perceived as luxury consumers because the price tag is higher than in other coffee shorts. Finally, the need for self-actualization can also be met by Starbucks because the brand creates positive experiences for individuals. Therefore, there is the possibility for Starbucks to meet all the needs within Maslow’s Hierarchy because of the various benefits offered by the products and services of the brand.
Huete-Alcocer, N. (2017). A literature review of word of mouth and electronic word of mouth: Implications for consumer behavior. Frontiers in Psychology, 8. Web.
Laurence, E. (2020). The pandemic will only intensify America’s love affair with the pumpkin spice latte. Web.
Samoggia, A., & Riedel, B. (2019). Consumers’ perceptions of coffee health benefits and motives for coffee consumption and purchasing. Nutrients, 11(3), 653. Web.
Vitale, K. (2017). 18 drinks China can’t live without. Web.