How marketing mix stimuli are used to influence consumer cognitive, affective and behavioural responses in Starbucks

Author: Iloka Benneth Chiemelie

Published: 1/4/2014

1.0 INTRODUCTION

Keller (2003, p. 596) pointed out that although some of the abstract and intangible aspects of branding such as emotion serves as an illusion of consumers aspects of brand knowledge, it also has to be understood by marketing that the aspects of brand knowledge (like cognitive element) are important in determining consumers’ value for the and increasing their affective behaviour towards such brands. Integrating the different dimensions of cognitive processing of a brand can improve the ability of the marketing to design the right more to ensure that consumers’ response are focused on the marketing goals (Keller, 2003, p. 597).

Figure 1: The relationship between cognitive process, and behavioural response

In order to understand the variables in this discussion, as definition of the illustration is as presented below:

Cognitive process – the information under a customers’ disposal, which is used to make the decision of whether or not to purchase from a specific brand.

Behaviour response – this is how a customer response purchase-wise to the brand in relation to the information at his or her disposal. The response if affective is the customer associates the brand with positive value in relation to the information at his disposal. On the other hand, is the customer is not able to associate the brand with positive value; the response is in-affective.

In fact, Keller (2003, p. 596) stated that while the cognitive process of a brand by a customer can be stated to be common approach in brand evaluation, recent studies have linked it as being important for creating quality image and being the centre of a more affective or emotional attributes that the customer associates with such brand. Moreover, Malhotra (2005) stated that over the past decades, researches on consumer decision making have mostly associated cognitive processing as being vital in increasing brand loyalty. Also, there have been a significant increase in the number of researchers that acknowledge affection and emotional association a customer has with brand as an important determinant of purchase decision (Burk and Edell, 1989; Holbrook and Westwood, 1989), and there have also been a link between affective behaviour and increase of brand image (Aaker, 1997; Keller, 2003; Ailwadi and Keller, 2004).

Other researchers have also described corporate brand and its association as being linked to both cognitive processing and affective behaviour. For instance, Brown (1998, p. 217) defined corporate association as “cognition, affect evaluation that a customers used to attach certain aspects of positivity or negativity to a brand.” In other works, there have also been noticeable occurrences of cognitive processing and affective behaviour in the same filed (e.g. Peter and Olson, 1999; Van Osselaer and Alba, 2000; Van Osselaer and Janiszewski, 2001; Keller, 2003).

The above importance emphasized on cognitive processing and affective behaviour as key to maintaining competitive advantage through repurchase intention from customers can be attributed to the fact that the increasing globalization and internationalization of corporations have affectively increased competition. As such, with numerous varieties to choose from, customers now put high hopes on the information they have about a brand in relation to sourced information or explanation from a previous customers; experience, or their own experience from the same brand. As such, if the cognitive information processing positively associated the brand with being able to meet customer demand, the purchase decision is increased and if the customer discovers that the brand is capable of meeting his or her demand, the repurchase decision is increased.

In view of the above statement, this paper will look to understand how marketing mix stimuli have been adopted by Starbucks to improve cognitive process, behavioural response and affective behaviour of customers towards the brand in relation to increased brand loyalty and repurchase intention.

2.0 ABOUT STARBUCKS

The story of Starbucks began in 1971. Back then, the company was a roaster and retailer of ground coffee and whole bean, tea and spices and had only one store in the Seattle’s Pike Place Market.  But currently, the company offers its products to millions of customer in 60 countries with its 18,000 retail stores.

The first make in Herman Melville’s Moby Dick is where the name Starbucks was coined from. The company’s logo is also an inspiration from the sea, which features a twin-tailed siren from ancient Greek Mythology. Its mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

Starbucks offers a range of products that customers can enjoy at their stores, at home or on the go. These products include: coffee – with more than 30 blends and single source of premium coffee, homemade beverages - Fresh‐brewed coffee, hot and iced espresso beverages, Frappuccino® coffee and non-coffee blended beverages, smoothies and Tazo® teas, and merchandize, free beverages and foods and other consumer products. In 2011, Starbucks recorded its highest revenue ever with $11.7 billion annual revenue generated. The company’s corporate store also grew by 8% and it is one of the reasons behind the massive revenue generated.

3.0 UNDERSTANDING THE CONCEPT OF CONSUMER DECISION MAKING PROCESS: THE ENGEL-BLACKWELL-MINIARD MODEL

Since it is not the object of this paper to present a comparison between consumer behaviour models, only one model will be used to analyse the factors that influences consumers’ decision, and the chosen model is the Engel-Blackwell-Miniard (EBM) model (Engel, Blackwell, and Miniard 1995). The decision is justifiable because the model presents a clear definition of needs and factors that influence consumers’ decision. 

Source as adapted from: Engel et al., (1995).

The authors argued that the model is an embodiment of all form of need satisfying behaviour, which comprises of broad range of factors that influences decisions and different types of problem-solving processes (Engel et al. 1995).

As can be seen from the figure 1 above, the model is made up of four sections as: decision process stage; information input; information processing; and variables influences the decision process. However, the model focuses on the decision process stages: problem recognition, search, pre-purchase alternatives evaluation, purchase, consumption, post-purchase alternative evaluation, and divestment. As Schiffman and Kanuk (1994) put it, information from both marketing and non-marketing sources are being loaded into the information processing section of the model. After the information are passed through the memory which serves a filter, the information will then yield its initial influence at the need recognition state. The search for additional information is brought to play if the additional information is needed or if the consumers’ experience is reduced as a result of dissatisfaction with an alternative brand. The information processing section is made up of consumer’s exposure, attention, comprehension, acceptance and retention of important information. All stages of the decision making process are also influenced by individual and environmental factors.

A case summary of the model is that decision making involves consumers being triggered by a stimulus to recognize the need to satisfy their wants. In order to satisfy these wants, consumers start searching for information and using gathered information to process the possibility of their needs being meet by the companies that offer such need satisfying services. Once that case is processed, consumers are exposed to the experience section by utilizing the services. Their decision to make future purchase is then based on weighting their experience against their expectation and comparing the present experience with what could have been obtained from an alternative brand. When all these factors converge to form a positive influence on the consumer in terms of need satisfaction, the repurchase intention is triggered and consumer loyalty is enhanced in the process. Additionally, it was noticed that some individual and environmental factors such as culture, custom, values, income, choice and cuisine – in the case of fast food industry influences consumers’ decision making process.

4.0ANALYSING PRODUCT DECISION MAKING IN STARBUCKS

In relation to the above model, the product decision making Starbucks is done through the following paths.

4.1Problem recognition

This is the first stage of decision making, which begins with the customers recognising the need to use a fast food restaurants. The research for that could be that the customers is hungry and wants to eat, the customers might want to spend time with friends or family, or that the customers is just looking for a relaxing place outside of the hones. So the questions are what is the possibility that Starbucks will be chosen? This will be based on past experience and friends recommendations, or the company’s offering of new products and market discounts.

4.2 Information search

Once the customers recognize the need to use fast food restaurants, the next is that the customers will begin looking for information about where to locate such. In this case, the location of Starbucks is very important because the customer will usually make decisions based on how the fast food chain is closely located to him as compared with the location of other fast food chains. For instance, if Starbucks is closely located to customer A, there are higher chances of the customer choosing Starbucks instead of other companies.

4.3 Evaluation and selection of alternatives

Once the information has been gathered, the next step involves the customer comparing the product offerings in terms of price per value with that of its competitors. The comparison can be in the form of obtainable price value – how the customer thinks that the price of the product is worth the value received. The evaluation process can take place as illustrated below. In the figure 2 below, the customer first recognizes the need to eat in a fast food restaurant, then compares with benefits obtainable from Starbucks with those obtainable from other closely branded restaurants.

Figure 2: Customer’s evaluation and selection of Starbuck

4.4 Decision implementation

Based on the evaluation above, the customer makes the decision to either chose Starbucks or its competitors. In order for Starbucks to be chosen, the company must exhibit a higher per value offer in terms of customers demand and price.

4.5 Post-purchase evaluation

After usage, the customer will evaluate the value obtained, and this is very significant in the sense that it is the main factor that influences customer loyalty. In cases where the customers associates the brand with higher value offer, then the possibility of repurchase is increased in the sense that the customers will think that the brand is better than other brands and will likely come back for its products. The evaluation process is done through the steps illustrated in the figure 3 below.

Figure 3: Post-purchase evaluation process

As can be seen from the figure 3 above, the motivation for repeat purchase is triggered with perception of higher value as discussed earlier.

4.6 Psychological core

4.6.1 Attention

In order to draw customers, attention, Starbucks utilizes the idea of visual signals to promote their brand value, through their advertisement. This can be seen in the advert below, where customers can easily perceived the hand signal as something cool while also associating it with the French fries offered at Starbucks

4.6.2 Perception

Following the advert, the customers’ selects, organizes and interprets the messages decoded in the advert in order to associate the brand with a given perception. In this case, Starbucks can easily get the perception of being cool, young, lively or even friends. The perception process involves the incorporation of the 4 organs, and it is illustrated below.

The incorporation of these five sensory organs draws an image about the brand in the customers mind. The image drawn is also a reflection of what the customer expects to get from purchasing from Starbucks. Where the company is capable of meeting the expectation of the customers, loyalty is increase and loyalty is decreased in situations where the expectations are not meet.

4.6.3 Motivation

In order to be motivated, the customers need evidence of the value offered by the brand, and the company is able to achieve this by sunning its advertisement to include the features of quality, healthy and reliability in terms of price per value obtainable.

4.6.4 Attitude

The attitude of the customer in this case will come in the form of cognitive, affective or behavioural response. The cognitive response involves processing the obtainable value with what could have been obtained if another alternative was chosen, while the affective response will involves close association of one’s self with the brand as a result of the obtainable value, and behavioural response is what transpires after the purchase, and it involves the customers decision to either repurchase or not to repurchase from the same brand.

4.6.5 Memory

After the purchase process, the customer stores the value obtained in his or her memory. This represents the overall perception of the company which will be an influencing factors in the customer’s decision to either purchase from that brand or chose an alternative brand in future purchase decisions. 

There are three tips of memory:

1-      Sensory memory (temporary storage of sensory information) less than 1 second

2-      Short-term memory (brief storage of information currently being used) limited

3-      Long-term memory (relatively permanent storage of information) unlimited

Therefore, it can be stated that it is important for the company to position its advertisement towards enhancing the long-term memory of its brand in the customers’ mind. This is because, if consumers store Starbucks on the long-term, then their long-term purchase decision will be influence by their memory storage. In essence, the consumers will likely be able to purchase form the brand for a very long time in the future and Starbucks will be making more money from such purchase cycle.

4.7 CONSUMERS’ ENVIRONMENT

4.7.1 Culture

Culture has been widely defined as people’s way of life, and it deals with all elements that encompass the survivability of people in a given society. This includes their eating habit and coffee drinking habit or the pattern of coffee consumption. For instance in Malaysia, there is close relationship between coffee consumption and work related or relaxation related context. This is because, consumers drink coffee in order to be heavily active in the workplace or relax with their friends.

This can also be reflected in the location of Starbucks coffee shops, which are usually located in the city centre such as shopping malls and close to offices. This has a direct impact on consumers’ cognitive, affective and behavioural response. The impact is that consumers are likely to purchase from Starbucks because it offers convenience in the sense that they don’t need to travel far from their workplace in order to have a sip of coffee.

4.7.2 Subculture

Besides the cultural aspect as to what constitutes consumers’ subculture. The sub-cultural aspects include age groups, peer groups, friends, classmates, and family economic class. All these factors influence consumers’ behaviour. For instance, if our friends likes going to Starbucks, there is a high possibility that we will also be influenced by their affective response and become a lover of Starbucks. Thus, the company also looks into other elements of sub-cultural influence in designing their marketing plan.

5.0 THE INFLUENCE OF MARKETING MIX ON CONSUMERS’ COGNITIVE PROCESSING, AFFECTIVE AND BEHAVIOURAL RESPONSES IN STARBUCKS

The marketing concept of 4Ps was formulated by McCarthy in 1975. The 4Ps is an element used to represent products, prices, promotion and place in the marketing mix. For over decades, these elements have been adopted as the root from which marketing plans are developed. In any case, with recent attention offered to service marketing in recent years, theorists have developed extra Ps to the basic concept. Fifield and Gilligan (1996) are the authors who recognized the need to include over variables – process, physical, and people to form the 7Ps of service marketing –, but only the initial 4Ps will be used to illustrate how marketing mix stimuli in Starbucks influence cognitive process, affective and behavioural response of customers as the company deals more on products rather than services. These 7Ps are:

1.      Product – features, quality and quantity

2.      Place – the location where the products are sold, number of outlets.

3.      Price – strategy, determinants, levels.

4.      Promotion – advertisement, sales promotion, public relations

5.      People – quantity, quality, training, promotion.

6.      Process – principles, automation, control measures.

7.      Physical- cleanliness, décor, ambience of the service

5.1 Product mix

Florence (2013) stated that one of the main corporate objectives of Starbucks is to create standard taste, irrespective of the country or location where they operate in. The company is of the view that while standardization is essential for reducing operation cost, adapting to the local environment they operate in is important for business success. As such, there concept of “Its mission is to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.” has been the founding principle of business management in Starbucks.

Although Starbucks offers the same blend of coffee in terms of ingredients and taste standards across the world, their products are designed to feature the culture, cuisine and customs of the market they operate in (Florence, 2013). Thus, this is why the coffee shop is still the most preferred across countries.

These examples are how the company has designed its business strategy to focus on the local needs of its market, instead of adopting an international menu. By focusing on the local needs, the company is communicative a cognitive mind of value which the customers no matter where they might be across the globe will use in processing their purchase decision. As the company offers beverages and foods that are locally made, the customer value is increased in the sense that customer can be sure of having meals that meet their local taste. In that case, the affective behaviour is increased and this led to increase in customer loyalty and repurchase decision. When customers travel abroad as well, there might be a sense of cognition that Starbucks is the place to be – for tasking quality coffee internationally – as this is the value the company constantly communicate to its customer.

5.2 Place

Currently, Starbucks has 18,000restaurant outlets in 60 countries across the globe (Florence, 2013). The company still continues its focus on management of capital, which is an illustration of its effective, prudent and strategic expansion. The increase potential for growth in the international market has been learned from its operation in the USA. This strategy has created a benchmarking gap between the company and its competitors. However, there is a need to understand the importance of looking back and using the past experience to build on even more lucrative restaurants.

Such local and global presence of the company is used in communicating the message of availability. While the company is focused on business expansion as a means of increasing profitability, the expansion process is communicating to the market that Starbucks is easily available and accessible. As such, the customers can be assured that no matter where they might be, there is always a chance of having Starbucks around. This form of marketing communication enhances the cognitive processing in the sense that customers can easily visualize Starbucks whenever they fell like going out to have some meals as the company is communicating that they can easily be found around their homes. In that case, it increases the affective behaviour with a strong mental image of accessibility and availability. In some of their outlets, Starbucks function 24/7 and this further enhances convenience on the customer’s side. As such, it can be seen that the company has been successful in enhancing positive behaviour and attitude towards its brand.

5.3 Pricing

Florence(2013) also stated that the company has realized that notwithstanding its cost saving approach that is inbuilt its standardization process, success can only be obtainable by being able to adapt to economic conditions in the different markets they maintain business operations in. This is actually what is happening with the company’s implementation of its pricing strategy which is focused on localization instead of globalization. This is also in line with the company’s business model of think global and act locally.

For each country, there is rigorous pricing concepts that can be used to determine the right price for such market. These processes have been described by Vignali et al. (1999) as:

1.      Selecting price objectives;

2.      Determining demand;

3.      Estimating cost;

4.      Analysing competitor’s cost, prices and offer;

5.      Selecting appropriate pricing method; and

6.      Selecting the definitive price.

The above processes are the framework which the company uses in designing prices for its products across countries. The overall pricing objectives of Starbucks  is to increase market share in each of the countries it operate in and this is the barometer used in setting prices for each of these market (Florence, 2013).

Such an approach whereby the company sets price according to market value is the best option. This is because, there are variations in earnings across the globe, and standardizing the pricing process wills an ineffective measure. For instance in the USA, the pay for 1 hours could be $5, and the same amount could be the pay for 3 hours in Malaysia or 6 hours in the Philippines, and even higher in some of the developing world. Therefore, while the US employ can afford to spend $5 on a meal, this might be possible in the countries where the pay is actually lower.

In view of that, Starbucks is communicating value per price by adopting a localized pricing option. This is because, the international customers will perceive high value for the products offered in relation to the American market, but will be paying a lot cheaper for the same quality. Overall, this will increase their affective behaviour towards the brand and offer them numerous reasons to choose Starbucks over its competitor. As such, it can be stated that it is significant to note that the company has been adopting numerous localized strategies in relation to the marketing mix discusses, and the reason behind such is to increase brand loyalty and subsequently increase their global market share.

5.4 Promotion

The final context that will be discussed is the issue of how promotion influences cognitive, affective and behavioural attitudes of customers towards Starbuck. Promotion is also known as the marketing communications mix, and it was developed, who also stated that it comprises of five major tools as:

1.      Advertising;

2.      Direct marketing;

3.      Sales promotion;

4.      Public relation; and

5.      Personal selling (Kotler, 1994).

By adopting these tools, Starbucks also localizes its marketing communications strategy, as the company seeks to meet the enormous demands of cultural and environmental differences that exist in the markets they operate in. It was Florence (2013) who stated that it would naïve of the company or any other company to ignore the fact that differences exists amongst markets in relation to culture and customers, as the ignorance or acknowledgement will have high influence of the performance of brands. Although the company focuses on promoting its corporate image global, it advertises its products by adopting the Maxim of “branding globally, advertising locally” (Sandler and Shani, 1991) as it’s promotionally strategy.

For instance, in Starbucks  UK advertisement, English footballer such as Alan Shearer are used as the company’s figurehead in promotion of its products, while the company also uses Fabien Barthez (the international goalkeeper of France) for its advertisement in France. In terms of setting, the environment of Starbucks in China features mostly big round tables which is a representation of communism in china – allowing customers to dine with their families, while the American setting is more of single and settings, which represents the American view of individualism.

Overall, the promotional strategy adopted in Starbucks is yielding the same effect as other marketing mix discussed above. The fact from this analysis can be stated that, the company has been able to develop the right approach towards strategically managing its operations across the globe by thinking globally and acting locally at the same time. The effects of such is that it provides customers with quality and positive information in which they can use for their cognitive processing and this will positively influence their affective behaviour. The reason for that is that customers will view Starbucks as respecting their values in terms of culture, customers and cuisines, as well as being caring by pricing their products to suite their economic condition in their country. In that case, the customers will be positively affective towards the brand and this is the main reason behind its global success.

6.0 CONCLUSION

Numerous researches have supported the idea that understanding the cognitive processing of customers’ in relation to how they influences their affective behaviour and purchase intention is very important (e.g. Peter and Olson, 1999; Van Osselaer and Alba, 2000; Van Osselaer and Janiszewski, 2001; Keller, 2003). The main reason provided by these researches for such claims is that cognitive processing is used by the customer to strategically position the brand in his or her mind. Additionally, the position a brand maintains in the mind of the market is very important because it directly influence their purchase decision. For instance, when a brand maintains the position of high quality at lower price, there are high chances of the brand being preferred over its competitors when it comes to purchasing products and services offered by this brand. There, the researchers claims are right and corporations must put more efforts in understanding the attributes customers use to associate there brand improve these attributes in cases where they are poor in order to ensure that they gain competitive advantage of their competing brands

The above statement led to the objective of this paper, which is to understand how marketing mix adopted by corporation influences the cognitive processing and affective behavioural response of customers. In that case, a Seattle company by origin, with the name Starbucks which was founded by two brother in 1971 was chosen, Starbucks is a coffee business that have gone to grow globally over the years, but adopting a business concept of “think global, act local”, through franchising scheme that has helped the company to maintain operation in over 60 countries with more than 18,000 outlets.

From the above analysis, it was discovered that such a business concept is behind the company’s growth as customer have come to associate the brand as being caring and respecting their values in terms of culture, customer and financial disposition. As such, it yields the cognitive processing of “positive value” toward the brand and this yield a subsequent increase in affective behaviour amongst customers. This increase in affective behaviour has been identified as the main reason behind the company’s tremendous growth as it directly influences profitability by giving customers reasons to purchase from the brand and increasing their repurchase intention. Therefore, it can be seen that cognitive processing directly influences how a customer perceives values in a brand, and it will directly influence the performance of the brand. In view of that, it can be concluded adopting a “think global, act local” approach to marketing mix is essential for success of international brands.

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