FINAL EXAMINATION CONSUMER BEHAVIOR analyse the impact of culture on consumer behavior of starbuck in vietnam

Analyse the impact of culture on consumer behavior of Starbuck in Vietnam .... The impact of culture on coffee consummer behavior in Vietnam ... The influence of culture on Starbucks Esp

VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND BUSINESS

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FINAL EXAMINATION CONSUMER BEHAVIOR

Dr Dao Cam Thuy MBA Hoang Trong Truong

Table of Contents

1 Introduction 2

1.1 Short profile of that product 2

1.3 Aims: Analyze the impact of culture on consumer behavior 4

2 Analyse the impact of culture on consumer behavior of Starbuck in Vietnam 4

2.1 Definition of culture and related factors 4

2.2 Definition of consumer behaviour 6

2.3 Culture coffee of Vietnam 7

2.4 Consumer behaviour in purchasing that product in that country 9

2.5 Analyse the impact of culture on consumer behaviour in that country 10 2.5.1 The impact of culture on coffee consummer behavior in Vietnam 10

2.5.2 The influence of culture on Starbucks Espresso coffee consumer behavior in Vietnam 12

3 Conclusion 13

References 15

Topic: Choose one product in one country to analyze the impact of culture on consumer behavior

1 Introduction

1.1 Short profile of that product

Starbucks is a famous coffee brand in the world today Starbucks coffee company was founded on March 30, 1971 and is headquartered in Seattle, Washington, USA Currently, the company is present in 49 countries with 17,800 stores

Starbuck’s logo

Starbucks has declared their mission to be the third place customers visit after the company and their families They emphasize to all customers that Starbucks is not just a coffee shop, but it is also a place to relax, work and study, or friends can meet and talk, that mission has been achieved adhere to more than 4 decades

Starbucks entered Vietnam in 2013, the first store in Ho Chi Minh City When had just enteried the Vietnamese market, the company has caused a fever when it brings a new and American-style coffee flavor As of 2018, Starbucks has opened 45

revenue The brand is also ranked 3rd in the list of "The best-selling coffee chains in the Vietnamese market by revenue" and is the foreign coffee chain that reaches the highest position in this list

Starbucks' main products are coffee and tea In particular, Espresso is the main product in Starbucks' most popular coffee beverage products It's a special blend of coffee beans from Latin America and Asia/Pacific, dark roasted to create intense sweetness and caramel flavour Thanks to this density, the coffee has a rich taste that does not dissolve into the milk, making it the perfect foundation for making a latte or cappuccino at home

1.2 Target consumer and target market

Starbucks' main approach to gain greater market share in the industry is by paying close attention to its market segments It not only uses demographic segmentation in terms of gender, income, age, and ethnic background but also employs geographic segmentation drawing upon the country or region of the world and its market size in that specific region and climate

The demographic segmentation by Starbucks is between 25 and 40 years of age with high incomes, the second target group is 18 to 24 years of age and belongs to richer families Most Starbucks customers belong to Generation Y which was born between 1977 and 2000 Psychographic segmentation shows that customers belong

to the upper-middle class and well-off customers who were educated

Starbuck's target market is from middle to high-income office workers with a desire to purchase premium products Schultz wanted to make Starbucks the place where their customers could relax, gather and interact with one another

Starbucks’s marketing strategies are situated between mass marketing and segment marketing; they are targeting a broader public; however, soon they realized growth opportunities in the industry and set strategies to cater to a wider array of the market segment Starbucks has also segmented its markets by demographically and geographically selecting the store location with educated and coffee lovers

1.3 Aims: Analyze the impact of culture on consumer behavior

Since different cultures have different values, consumers have different buying habits Marketing strategies should reflect the culture that is being targeted The strategy should show the product or service as reinforcing the beliefs, values and customs of the targeted culture Failing to do so can result in lost sales and opportunities

For marketers anywhere in the world, it is essential to develop a strong understanding of the local culture and its accompanying beliefs, values, and customs Culture is how people make sense of their society, its institutions, and social order Culture frames how and what people communicate, how they express what is proper and improper, what is desirable and detestable Without an understanding of culture, marketers are not really even speaking the right language to the consumers they want

to target Even if the words, grammar, and pronunciation are correct, the meaning will be off

2 Analyse the impact of culture on consumer behavior of Starbuck in Vietnam 2.1 Definition of culture and related factors

Culture has been defined in many different ways Culture is a society’s personality It includes both abstract ideas, such as values and ethics, and material objects and services, such as the automobiles, clothing, food, art, and sports a society produces Put another way, it’s the accumulation of shared meanings, rituals, norms, and traditions among the members of an organization or society

Culture is not static It evolves continually as it synthesizes old ideas with new ones A cultural system consists of these functional areas:

• Ecology: The way a system adapts to its habitat The technology a culture uses

to obtain and distribute resources shapes its ecology The Japanese, for example, greatly value products that make efficient use of space because of the cramped • conditions in their urban centers

• Social structure: The way people maintain an orderly social life This includes the domestic and political groups that dominate the culture (e.g., the nuclear family versus the extended family; representative government versus dictatorship)

• Ideology: The mental characteristics of a people and the way they relate to their environment and social groups They share a com- mon worldview that includes ideas about principles of order and fairness They also share an ethos, or a set of moral and aesthetic principles For example, when they go to the beach many Muslim women wear “burkinis” that cover every- thing—the face, hands, and feet—to conform to Islamic standards of modesty In an effort to protect its status as a secular society, France banned women from wearing the garments The ban was eventually overturned, but the conflict con- tinues and other Western countries are considering similar rules

The study of culture is the study of all aspects of society It is the language, knowledge, laws, and customs that give society its distinctive character and personality In the context of consumer behavior, culture is defined as the sum total

of learned beliefs, values, and customs that serve to regulate the consumer behavior

of members of a particular society Beliefs and values are guides for consumer behavior; customs are unusual and accepted ways of behaving

The impact of culture is so natural and ingrained that its influence on behavior

is rarely noted Yet, culture offers order, direction, and guidance to members of society in all phases of human problem-solving

Culture is dynamic, and gradually and continually evolves to meet the needs of society Culture is learned as part of social experience Children acquire from their environment a set of beliefs, values, and customs that constitute culture (i.e., they are encultured) These are acquired through formal learning, informal learning, and technical learning Advertising enhances formal learning by reinforcing desired modes of behavior and expectations; it enhances informal learning by providing models for behavior

Culture is communicated to members of the society through a common language and through commonly shared symbols Because the human mind has the

ability to absorb and process symbolic communication, marketers can successfully promote both tangible and intangible products and product concepts to consumers through mass media

All the elements of the marketing mix serve to communicate symbolically with the audience Products project an image of their own; so does promotion Price and retail outlets symbolically convey images concerning the quality of the product

A wide range of measurement techniques is used to study culture The range includes projective techniques, attitude measurement methods, field observation, participant observation, content analysis, and value measurement survey techniques

2.2 Definition of consumer behaviour

Consumer behavior is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experi- ences

to satisfy needs and desires A consumer may purchase, use, and dispose of a product, but different (the objective aspects of a population, such as age and sex) and psychographics (psychological and lifestyle characteristics) Emerging developments, such as the new emphasis on relationship marketing and the practice

of database marketing, mean that marketers are much more attuned to the wants and needs of different consumer groups

Successful companies understand that needs are a moving target No organization—no matter how renowned for its marketing prowess—can afford to rest

on its laurels Everyone needs to keep innovating to stay ahead of changing customers and the marketplace BMW is a great example No one (not even rivals like Audi or Mercedes-Benz) would argue that the German automaker knows how to make a good car (although they may not agree with the company’s claim to be “the ultimate driving machine”) Still, BMW’s engineers and designers know they have to understand how drivers’ needs will change in the future—even those loyal owners who love the cars they own today The company is highly sensitive to such key trends as:

• A desire for environmentally friendly products

• Increasingly congested roadways and the movement by some cities such as London and New York to impose fees on vehicles in central areas

• New business models that encourage consumers to rent products only while they need them rather than buying them outright

BMW’s response: The company committed more than $1 billion to develop electric BMWi models such as its new i3 commuter car and i8 sports car These futuristic-looking vehicles are largely made from lightweight carbon fiber to maximize the distance they can go between battery charges, and 25 percent of the interior plastic comes from recycled or renewable raw materials In addition, BMW started a car-sharing service (now in Portland, Seattle, and Brooklyn) it calls DriveNow: Drivers use a computer chip in their licenses to hire a car and leave it wherever they are when they no longer need it That’s forward-thinking

2.3 Culture coffee of Vietnam

Vietnamese coffee culture has formed and developed with its own unique features In the 1880s, the French brought coffee to Vietnam Since then began to cultivate to serve the aristocracy It was not until the 1920s that it was widely planted

in Kon Tum and expanded to suitable geographical areas Since then, coffee has been

a specialty It is also the main source of income for many generations of families Over the years, along with the development of society Coffee is still present in the lives of Vietnamese people, although there are also significant self-transformation steps

The strong coffee flavor has become familiar in the daily life of Vietnamese people The sophistication of Vietnamese coffee is reflected in the unique culture and style of coffee enjoyment of Vietnamese people

Typical street coffee culture with Vietnamese soul

First, bearing a bold impression is "street coffee culture" This is the most popular coffee but the most "followers" Image of a cup of black coffee or milk coffee (the Northern people call it black and brown) Served by a hot teapot with a few roadside chairs It is a familiar image in the subconscious to start each morning

“Let's go for coffee!” The catchphrase of today's coffee culture

"The betel nut is the beginning of the story" of the old grandparents was gradually replaced by "Let's drink coffee" It is a drink, a cafe is a place for couples

to talk The perfect place for friends to gather and chat The starting place for business cooperation Or even alone to reminisce and reflect on life

Phin - Proud symbol of Vietnamese coffee culture

Coffee phin is considered the most favorite drink of Vietnamese people The feeling of sitting and waiting for each drop of coffee to fall is really interesting It is even more interesting to sip its fruits, be it a cup of hot black coffee, can add a little milk, drink hot or drink ice depending on each person's preference

Regional characteristics also have their own coffee culture

People can guess the personality and culture of each region through the way coffee is made and each person's drinking preferences For example, Saigon people like iced black coffee, refreshing iced milk coffee Or "silver faint" is gentle and can

be enjoyed at any hour of the day While people in the Central region of Hanoi, prefer

a completely different taste with a bolder taste They prefer to drink hot rather than drink cold And often sip early in the morning to start a new day

Vietnamese people have their own style of enjoying coffee, they do not consider coffee as a quick drink with anti-drowsy effects like Americans, but enjoy coffee as

a culture: sipping and contemplating Sitting by a cup of coffee, chatting with each other, taking small sips while reading newspapers, listening to music and then thinking about life, people,

The coffee culture of the Vietnamese in recent years is a culture of enjoyment

in both taste and sight People can sit for hours not only to enjoy a cup of coffee but also to enjoy the space of the shop The price of a cup of coffee or any drink therefore also includes the cost of ingredients and service costs

2.4 Consumer behaviour in purchasing that product in that country

With a period of 7 years of existence in Vietnam, it is possible to see the consumption behavior of customers for Espresso coffee products in general and Starbucks in particular as follows:

1 Customers came out of curiosity with a very famous coffee brand from the

US This is understandable for products arriving in a new country They come because of the famous brand name, because of the glass with the Siren symbol and because of the luxurious and high-class space

2 Customers follow trends Like many others, many customers also want to experience this luxury coffee company once It is a fact that the price of Starbucks coffee is among the most expensive coffee brands in Vietnam Specifically, the price

of 1 cup of Espresso coffee ranges from 80,000 to 100,000 VND Meanwhile, Phuc Long's coffee price is praised by many people for its quality at only 30,000 - 40,000 VND Drink prices in Highlands are about 29,000 VND 49,000 VND (according to – cafebiz.vn)

3 Check in Starbucks Because it is a luxury coffee brand, there are also some customers who choose Starbucks as a place to take virtual photos That makes them feel more upscale, rich and luxurious when using the products here This is how they make other people impressed and admire them

4 A small part for work and study Customers who come to Starbucks and use Espresso are mainly office workers and people with middle-high income Main activities are meeting partners, working or studying However, this group is quite small in the population in Vietnam

5 Few customers return to Starbucks for the taste of coffee Also, many people don't go to Starbucks for coffee For those who only come to experience, to "check-in", they usually only come once and then go Customers who come to Starbucks because they are really passionate about their drink make up a very small part of those who come to the store The number of loyal customers is not large, Starbucks does not have the courage to expand the map of stores spanning Vietnam