Starbucks

By: Carlos Sepulveda

Problem
Definition Process
1. Starbucks is losing sales due to product Selection

2. Information sought is due to shareholders losing money

(Down 11.38%)

3. Decision- making environment consists of corporate leaders,

Issue: They don’t know individual location customer attitudes/
taste preferences
 Problem
Definition part 2
4. Symptoms of declining profits include decrease of
Frappuccino sales (17%-11%)

5. With the management problem of awareness of consumer

attitudes & behaviors, they should research individual consumer
preferences. Then make changes to each location based on
findings

6. Information on item sales already exists, but not consumer’s

attitudes/ preferences
Problem
Definition part 3
7. The objectives are clear and realistic, because simple
observation and surveys can be administered

8. Research Objectives:
● Secondary & Online Research/ Analysis
● Observational Research/ Analysis- Starbucks located on
North Alafaya
● Survey Research
● Learn current customer attitudes/ taste preferences that
could lead to increase of sales/ stock
Secondary Data
ANALYSIS
➢ Mergent Online
○ Company details, financials, executives, reports, and competitors.
➢ IBISWorld
○ “Coffee & Snack Shops in the US”

○ “Coffee Shops Brewing More Premium, Healthier Options”

➢ Business Source Premier
○  “consumer insights on healthy eating”
 Secondary Data
ANALYSIS
-Preferred product in coffee shops are the beverages
consumed followed by food items.
“Coffee & Snack Shops in the US”

-starbucks must expand menu options and be attentive to

consumer preferences.

-many consumer now in time are pushing for more healthier

options.

-As time continues to pass we discovered that the desire for

healthier food and beverage options has been constantly
increasing and impacting Starbucks in a major way.
Online Data
analysis
● Starbucks must provide healthier options and lower prices.
○ Market is becoming more healthy and prices are starting to turn away customers.
● The Wall Street Journal:Frappuccino Gets a Sugar Makeover
○ Starbucks has reduced sugar in its Frappuccinos and have provided it in 600 stores for testing.
● ChickAdvisor.com
○ Reviews remain positive for Frappuccinos, but complaints of sugar and prices have been consistent.
○ 75 reviews of Caramel Frappuccino,48% complained about sugar,calories, or price.
Online Data
analysis
● Reddit
○ Many redditors on the Starbucks subreddit believe that
Starbucks needs to create healthier and tasty beverages.
○ The subreddit includes baristas that comment and post about
creating healthy drinks on the spot for customers.
● American Marketing Association: Consumer Idea Generation
○ Study was done to show that a new Marketing strategy to
target consumers that have great knowledge in industry
specifics instead of consumers just building off of each other.
○ AMA suggested Starbucks to follow, which can help create
solutions for current problems.
Observational
Research
Research Conducted on Nov. 20 2018 from 11:30AM
to 1:45PM

124 Patrons

49 Cold Drinks Ordered

41 Hot Drinks Ordered

16 Food Items Ordered

65% College Aged, 25% Middle Aged, 10% Older

Individuals

60% Male, 40% Female

OBservational
Research Analysis
Positive Observations Negative Observations

Great Communication Among Workers Half Who Entered The Establishment Were Not Purchasing
Any Products, But Only Using Their WIFI.
Workers Formed Relationships With Repeat
Customers Workers Seemed Unable To Handle Large Increases In
Customer Traffic
Workers Were Incredibly Friendly To Customers
Lots Of Waste During High Levels Of Customer Traffic In
and Knowledgeable About The Various Products the Store
They Served
Products Turned Down Because Of High Calorie/Carb Count
Workers Were Able To Make Products Quickly For
The Customers On The Go
Survey
Research
● Research objective: Learn customers’ taste
preference & Attitude towards menu items
○ Screener:
■ Confirm respondents are current
customers of starbucks
○ Goal: Conclude which food/ beverage items ○ Warm-ups:
should be changed, added, or removed ■ Typical purchases & Frequency of
● Data Collection: Online administered surveys visits
through Email & Social Media ○ Transitions:
○ Survey created on Google Forms ■ Importance of their healthy
● Survey format: consumption
○ 13 questions ○ Complicated:
○ Mix of dichotomous, multiple choice, and ■ What customers wanted to change
scaled responses about Starbucks stores
○ Classification:
■ Learn demographics
Conclus
ion
● Consumers are choosing healthier food and
beverage options
● Frappuccino sales decreased from 17% to 11%
in only 3 years
● Most popular drink purchased during
observation was the cold brew coffee
○ Only 5 calories
● Only 26% of Starbucks beverages are below
200 calories
○ Calculated with whole milk
Recommend
ations
● Administer a survey to determine consumer attitudes,
tastes, and trends
● Reduce the amount of sugary drinks on the menu
● Create healthier menu options
● Promote the online ordering function on the Starbucks app