A Marketing Research Essay On Consumer Behavior At Starbucks In Singapore.

This marketing research project is intended to understand consumer purchase behavior at Starbucks (Singapore). A set of questionnaires was developed and used via personal survey at selected Starbucks stores in Singapore during working hours. There was a question that attempt to understand customers’ opinion on a controversial topic on halal certification at Starbucks.

Research objectives:

1. Identify the key demographic and behavioral profile of the Starbucks consumer.
2. Identify the significant factors that influence consumer purchasing behavior.
3. Establish the relationships between marketing communications and purchase decision.
4. Provide suitable recommendations based on the analysis of the data.

Results and Analysis

The café culture has been on the start in Singapore from 2011. Before that, cafés were not that common in Singapore. With an attempt to replicate the café setups in Melbourne, café culture has been introduced in Singapore. Gradually, Singapore has seen increase in the number of cafés each week. Today, in each and every neighborhood of Singapore, there can be found a café. The introduction of the cafés and café cultures has brought about changes in the daily life of the people in Singapore (Ng et al. 2018). There has been changes in the behavior of the people. Along with brunch culture, the café hopping culture also started in the lives of the people. Thus, instead of spending time in the malls, cafés have been found to be a better place to hang out. With the increase in the coffee culture in Singapore, people gradually got introduced to the third wave specialty coffee (Wong 2014).

The method of production of coffee by roasting beans, the specialty of barista, etc., are all considered as artisanal methods of coffee production. These methods of production are also scientific. The origin of the coffee beans that are used are traceable at times and thus, the sustainable sourcing of the coffee has been considered as different from kopi (Pang 2018). Gradually, small coffee shops like strangers Reunion, Common man coffee roasters, Nylon coffee roasters etc., set up their own cafes and have named their shops as per their interests. These types of coffees have been popular initially in Singapore. Gradually, the coffee culture in Singapore shifted to bear a resemblance to stale bread from the resemblance of the lively coffee culture adopted from Melbourne (Biswas-Tortajada and Biswas 2015).

Thus, with the initial increase in the coffee culture, the business gradually began to fall. From the starting till 6 years, the coffee culture in Singapore has been of huge demand. After that, the demand for cafés started to decrease. Thus, there has been more cafes popping up in the streets of Singapore but the rate of increase has fallen significantly (Abbas, Ibrahim and Kadhim 2016). According to some researchers, the planning and the views of the café culture in Singapore was not up to the date. The starting of most of the coffee companies have been small and the companies has no view of expanding. The cafés have eventually found out that they do not have enough sales to have a turnover which can enhance them for the growth of the companies (Williams 2015). Thus, the capacity of each of the companies was less and they were unable to expand when necessary.

This research is mainly based on the marketing analysis of the coffee shop Starbucks. With reference to the discussion on the coffee market in Singapore, the following are the objectives of this research study:

• To identify what are the demographic and behavioral profiles of the consumers of Starbucks.
• To identify the factors that are significant for purchasing behavior of the consumers.
• To establish the relationship between the communications provided in the market with the decision of purchase.
• To provide suitable recommendations on the basis of the results obtained by analyzing the data.

In order to conduct this research, some data has been collected from the consumers of Starbucks in Singapore. The main aim of this research is to understand the purchasing behavior of the consumers of this store. Thus, to conduct this research and for the purpose of the collection of the data, a survey questionnaire has been prepared and distributed to some randomly selected Starbucks stores in Singapore.

Sample Profile

From the distributed questionnaires, 201 responses have been returned, which will be considered as valid for the research. There are though a lot of missing values in the data collected as a result of the responses from the customers. 

Figure 1: Gender of Respondent

Table 1: Gender of Respondent
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Female	111	55.2	56.6	56.6
	Male	85	42.3	43.4	100.0
	Total	196	97.5	100.0
Missing	System	5	2.5
Total		201	100.0

 From the demographic analysis of the gender of the respondents given in table 1 and figure 1, it can be seen that the valid percentage of females in the sample is 56 percent, and 43 percent of the respondents are males. From here, it can be said that the number of females visiting the Starbucks coffee shop in Singapore is more than the number of males. Thus, females are more prone to visiting Starbucks.

Table 2: : Age of respondent
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	18-24	60	29.9	30.3	30.3
	25-34	44	21.9	22.2	52.5
	35-44	37	18.4	18.7	71.2
	45-54	35	17.4	17.7	88.9
	55+	22	10.9	11.1	100.0
	Total	198	98.5	100.0
Missing	System	3	1.5
Total		201	100.0

The next demographic variable that has been analyzed is the age of the respondents visiting the Starbucks coffee shops. From figure 2 and table 2, it can be seen that the maximum number of people who hang out at the Starbucks coffee shop are aged between 18 and 24 years and the number of people in the higher age groups are less likely to visit Starbucks. Thus, it can be said that the café culture is more common among the young people than among the aged people.

Figure 3: Income of the respondents

Table 3: Income of respondents
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Under $25,000	41	20.4	21.0	21.0
	$25,00-49,999	58	28.9	29.7	50.8
	$50,000-74,999	43	21.4	22.1	72.8
	$75,000+	53	26.4	27.2	100.0
	Total	195	97.0	100.0
Missing	System	6	3.0
Total		201	100.0

The third demographic factor discussed is the income group of the customers of Starbucks. It can be seen from table 3 and figure 3 that the people having an average income are more prone to visit Starbucks. The people earning between $ 25,000 and $ 49,999 have been found to visit Starbucks at the most. 58 of the 201 customers belong to this income group. 

Figure 4: Race of the respondents

Table 4: Race of respondent
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Chines	94	46.8	48.2	48.2
	Malay	30	14.9	15.4	63.6
	Indian	50	24.9	25.6	89.2
	Other	21	10.4	10.8	100.0
	Total	195	97.0	100.0
Missing	System	6	3.0
Total		201	100.0

From the analysis of the races of the respondents given in table 4 and figure 4, it can be seen that 46.77 percent of the selected customers visiting the Starbucks café in Singapore are Chinese, followed by 24.88 percent of the people, who are Indians. Thus, it can be said that the café is more popular to Chinese and Indians, rather than any other races.

To identify the significant factors influencing the purchasing behavior of the customers has been evaluated with the help of correlation analysis. Here, the dependent variable is purchase behavior, which is denoted by the number of cups of coffee a person intakes from the store in a particular week. Thus, the significance of all the variables with the dependent variable will be mainly considered in this case. It can be seen from the correlation table given in table 5 that the variables that are significantly related to the purchasing behavior of the consumers of Starbucks denoted by the number of cups of coffee consumed by a customer in a week is significantly influenced by the variables frequency of visits to Starbucks, average expenditure on each visit to the café, location of purchase, the product which is most likely to be purchased by the consumers, awareness of the source of the nutritional information of Starbucks, importance of sales and promotions, awareness of the promotions in Starbucks, the evaluation of the demand for Starbucks with respect to other coffee shops in Singapore, quality of the products and services  and evaluation of the atmosphere at Starbucks. All these variables have significant influence on the purchasing behavior of the consumers at 0.05 level of significance as the significance level observed in the correlation table for these variables are less than 0.05. This indicates the significance of the variables.

Correlation and Regression Analysis

Table 5: Correlation Matrix

Next, in order to establish the relationship between marketing communications and the purchasing decisions of the consumers of Starbucks in Singapore, regression analysis has been conducted. Regression analysis is the most appropriate analysis technique to establish the relationship between independent and dependent variables. In this case, the purchasing decision of the consumers denoted by the variable “cups of coffee in a typical week” is considered as the dependent variable. The variable marketing communications are denoted by two variables mainly “importance of sales and promotions” and “awareness of Starbucks promotion”. These two variables are the independent variables in the analysis.

Table 6: Regression Analysis

Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .179a .032 .022 4.367 a. Predictors: (Constant), Awareness of Starbucks promotion, Importance of sales and promotions ANOVAa Model Sum of Squares df Mean Square F Sig. 1 Regression 121.816 2 60.908 3.194 .043b Residual 3680.429 193 19.070 Total 3802.245 195 a. Dependent Variable: Cups of coffee in a typical week b. Predictors: (Constant), Awareness of Starbucks promotion, Importance of sales and promotions Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 6.374 2.157 2.955 .004 Importance of sales and promotions .059 .351 .019 .169 .866 Awareness of Starbucks promotion -.848 .578 -.164 -1.467 .144 a. Dependent Variable: Cups of coffee in a typical week

The table for regression analysis are provided in table 6. It can be seen from the analysis that marketing communication can predict the variable purchasing behavior of the consumers 3.2 percent correctly. From the ANOVA table, it can be seen that the significance value of the developed model is 0.043, which is less than the level of significance (0.05). Thus, the prediction model developed is significant. It can also be seen that the importance of sales and promotions positively impact the purchasing behavior and the awareness of the Starbucks promotion negatively impact the purchasing behavior of the consumers.

From all the analysis conducted above on the purchasing behavior of the consumers, it has been found out that Starbucks is a very popular coffee shop, which has enhanced the café culture in Singapore to some extent. It has also been observed that women are more prone to hang out and purchase from Starbucks than men. It has also been observed that Starbucks is common mostly in the young people, preferably to the students as most of the customers at Starbucks café in Singapore has been found to be belonging to the age group of 18 to 24 years. The demand for the visit to Starbucks decreases with the increase in the age of the people. People with average income has been found to be most probably to pay a visit to the Starbucks and hang out and have coffee at the café. Following the average income group of people, the people who prefer Starbucks belong mostly to the income group of above $75,000, which is quite high. Further, it has been seen that the demand for Starbucks in Singapore is high for the Chinese and the Indian people. People belonging to other races do not much prefer Starbucks. The purchasing behavior of the consumers is positively related to the sales and promotions of the brand. Thus, it can be said that with the increase in the promotions of the brand will enhance the purchasing behavior of the consumers. Eventually, the sales of the company will increase and thus, the café culture will again be on the rise in Singapore.

The population of Singapore is quite high and collecting a sample of 200 customers might not be sufficient to obtain a result that can explain the purchasing behavior of the consumers of Starbucks in Singapore. Further, no relationship on the consumer behavior has been analyzed with respect to the demographic variables. The difference in the number of cups of coffee consumed by the male and the female population can also be assessed. Further, these differences can be evaluated with respect to the age, race as well as the income group of the consumers. The impact of these variables on the consumer purchasing behavior could have been computed in this research.

Thus, from the analysis conducted so far, it can be understood clearly that Starbucks is quite in demand in Singapore. There should be promotions of the brand so that the sales of the company can be increased as from the analysis, it has been obtained a positive relationship between the purchasing behavior and sales and promotions. Thus, the promotion of the brand is extremely important.

References

Abbas, A.A., Ibrahim, A.M.K. and Kadhim, M.J., 2016. Measurement of radionuclides in imported Coffee Consumed in Basra southern of Iraq and estimation of its annual effective dose. Baghdad Science Journal, 13(2), pp.376-380.

Biswas-Tortajada, A. and Biswas, A.K., 2015. Sustainability in coffee production: Creating shared value chains in Colombia. Routledge.

Ng, R.Y.X., Wong, Y.S., Yeo, J.Y., Koh, C.L.Z. and Gan, S.K.E., 2018. The Associations between Dietary Practices and Dietary Quality, Biological Health Indicators, Perceived Stress, Religiosity, Culture, and Gender in Multi-Cultural Singapore. Journal of Ethnic Foods.

Pang, C.L., 2018. Mapping Chinese Coffee Culture in the Land of Tea.: The Case of Yunnan Province.

Williams, C., 2015. Effective management. Cengage Learning.

Wong, J.O., 2014. The culture of Singapore English. Cambridge University Press