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

VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND BUSINESS - - FINAL EXAMINATION CONSUMER BEHAVIOR Instructors: Dr Luyen Van Thuy Dr Dao Cam Thuy MBA Hoang Trong Truong Student: Nguyen Ngoc Anh Student ID: Class: 18050661 QH2018E- QTKD CLC Ha Noi, 12/2021 Table of Contents Introduction 1.1 Short profile of that product 1.3 Aims: Analyze the impact of culture on consumer behavior Analyse the impact of culture on consumer behavior of Starbuck in Vietnam 2.1 Definition of culture and related factors 2.2 Definition of consumer behaviour 2.3 Culture coffee of Vietnam 2.4 Consumer behaviour in purchasing that product in that country 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 Conclusion 13 References 15 Topic: Choose one product in one country to analyze the impact of culture on consumer behavior 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 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 stores in Ho Chi Minh City and Hanoi, bringing in more than VND 593 billion in 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 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 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 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 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: 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 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 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) 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 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 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 "checkin", 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 2.5 Analyse the impact of culture on consumer behaviour in that country 2.5.1 The impact of culture on coffee consummer behavior in Vietnam Vietnam is a country with many diverse and rich cultures, which has influenced the habits and consumption behavior of Vietnamese people All things like consumption behavior, living behavior, every need, etc It all starts with culture Culture determines the customs that people follow to satisfy their needs It is clear that consumer behavior is diverse and cultural customs also influence how people cook their meals Cultural factors play an increasingly important role in business and production The coffee culture of the Vietnamese people has become popular and become a culinary beauty in Vietnam Producers must consider the factors affecting the consumption behavior of Vietnamese people, especially culture, to come up with appropriate marketing strategies for their coffee products Coffee is a product of the culinary field and is used in many different forms according to each region in the territory of Vietnam from North to South That difference stems from environmental factors such as culture, politics, society that affect the consumer's purchasing decision process for coffee products As with any consumer behavior of a product, the buying decision process also includes the following basic stages: • Need awareness; • Look for information; • Evaluate; • Decide and respond Occurrence of demand Cultures always seek to preserve their cultural identity but are always influenced by other cultures The trend of economic integration and absorption of advanced cultural values is increasing A stylish, modern active lifestyle is also a reason forming consumer demand, coffee In addition to looking for added value as mentioned, people with new lifestyles drink coffee to find the value that is the 10 stimulating properties of coffee, they want to work more, be active more For Vietnamese people, the perception of themselves from others is very important Through the need recognition stage, people proceed to gather information about the product and evaluate options to meet their needs Collecting information and evaluating options Information about coffee or any other product to consumers is influenced by cultural factors Consumers can accept such information or rate its reliability as high or low, both based on personal opinions and cultural norms and values where they live and work To satisfy their needs, either to drink to satisfy their thirst or to find other values such as sobriety or expression of their lifestyle People have many choices Information about products that are suitable for value-seeking needs, in accordance with cultural values or not contrary to, taboo with Vietnamese culture will be more easily accepted The search for information and evaluation of coffee product choices of consumers in Vietnam is strongly influenced by other culinary cultures That requires marketers' communication about coffee products to be appropriate Consumer responses In the process of exchanging information about coffee to find the values of their needs, consumers can choose coffee or another beverage In deciding to consume coffee, Vietnamese people will decide how to enjoy, what type of coffee, where, and also the choice of time to enjoy In each choice, cultural factors play a role and have a significant impact on consumer behavior People can choose to drink coffee at the shop or make their own at home, drink filter coffee or instant coffee, drink Trung Nguyen brand coffee or nescafe, vinacafe For Vietnamese people, coffee is not a daily drink in the house, they not use coffee to receive guests like tea, coffee does not show any cultural behavior Therefore, the choice of coffee is to go to small shops with quite typical Vietnamese styles Maybe a simple coffee shop located on the second and third floors in the old town It could also be in an alley or on the sidewalk across from a certain lake Others, under the influence of traditional cultural values and also new lifestyle cultures imported from the outside, their choice is polite coffee shops that combine traditional and modern decoration 11 2.5.2 The influence of culture on Starbucks Espresso coffee consumer behavior in Vietnam Despite being one of the most prominent and best-selling products in Starbucks' coffee products, Espresso coffee has not yet met the needs and preferences of Vietnamese consumers Espresso is made from Arabica coffee beans with a relatively low caffeine content of only 1.5%, which makes Vietnamese people feel unsatisfied with the coffee taste they desire Vietnamese coffee taste is famous for being stronger and stronger than other countries Vietnamese people are used to coffee made from Robusta beans with caffeine content up to 2.7% higher than Arabica in Espresso For those who are familiar with domestic coffee products, Starbucks drinks are definitely not "enough" for them Vietnamese users need a "strong" drink to help them wake up and maintain a long working day, and the big coffee chain can't meet this Sarah Grant, Assoc of the University of California, commented: "I think the decisive factor is the origin of Vietnamese coffee culture Robusta coffee and iced milk coffee have entered their subconscious every time they drink coffee Human psychology it's going to be difficult to try something so new from what we've known for a long time." Besides, the price of cup of Espresso is quite high, about 90-100 thousand VND, nearly 5-7 times higher than a cup of street coffee The price is so expensive that many people think twice when they intend to drink Espresso or other Starbucks products With the same drink, users have many choices in other brands with much cheaper prices Besides, Vietnamese people don't drink coffee because of the brand, they drink it because of the quality of the product, the menu is right, and the price is affordable Starbucks did not meet ⅔ of the above reasons, so it is inevitable not to leave a mark in the hearts of users Americans - home to the world's largest coffee chain are used to drinks like latte or cappuccino In 2013, when entering Vietnam, Starbucks brought the same menu from the country of flags to this Southeast Asian country However, Starbucks forgot that latte and cappuccino are not Vietnamese favorites Egg coffee, milk coffee or black coffee, coffee-flavored drinks are Vietnamese favorites Vietnamese people 12 need a drink with a lot of coffee, while Starbucks products have more milk The different menu does not meet the right needs, making Vietnamese people not interested in this world's largest coffee chain Recognizing the influence of culture on consumer behavior, Starbucks has changed its business strategy to attract more Vietnamese customers For example, in 2016, Starbucks introduced an Iced Dolce Misto – which seems to be the closest thing to an iced milkshake As a barrier between Starbucks and customers when there is no black coffee option, the addition of drinks such as Asian Dolce Latte or Iced Dolce Misto will help Vietnamese customers be less shy when entering the store In addition to coffee, other food products, 100% of Starbucks products are made in Vietnam because this is a daily consumer product It can be said that in the buying decision process of Vietnamese Starbuck consumers, two aspects of traditional and modern culture, influence each other throughout and intertwine in each stage of the buying decision process Starbuck products as analyzed above Based on that analysis, the marketer of Starbucks needs to understand the culture of a region or territory where the Company's business takes place as in Vietnam Aim to identify consumer needs, based on the cultural characteristics of that region and territory to determine the target market for products and marketing measures appropriate to the socio-cultural context of that community These principles are not only principles for coffee products, but they are principles drawn up for all types of products and services in general when Starbuck wants to succeed in Vietnam Conclusion It can be said that the influence of culture on individual behavior is very strong, especially traditional cultural values, and people accept those conventions both consciously and unconsciously both logical arguments and written legitimacy within "unwritten conventions" Cultural values play a major role in the identification of the discovery of a certain type of need But they can affect each stage of the consumer's buying decision process: perception of information search needs, evaluation of alternatives and purchasing decisions, post-purchase responses In addition to the 13 decisive influence on a certain type of consumer demand, culture remains an environment for information about products to humans to be absorbed and filtered The process of effective marketing communication is when it is disseminated through the expression of normative values in the culture Thereby affecting consumption trends in society, promoting trends, or preventing trends that go against the core or slow down the acceptance of a certain type of product In the process of integration in all fields today, Vietnamese culture has received and changed in an advanced and modern way while still bearing the national identity With the coffee culture of the Vietnamese consumers having existed for such a long time, Starbucks needs to change its business strategy, menu and coffee recipe to be able to suit the tastes, habits and tastes of Vietnamese people Then the business will develop better and attract Vietnamese customers to Starbucks Finally, customers when enjoying Espresso coffee or any other drink will be impressed and make them come back with their loyalty to a product of a foreign brand but still taste good familiar to Vietnamese 14 References Solomon, M., 2016 Consumer Behavior: Buying, Having, and Being Pearson Education Limited Niosi, A., 2021 Culture Explained [online] Opentextbc.ca Available at: McCort, D and Malhotra, N., 1993 Culture and Consumer Behavior: Journal of International Consumer Marketing, 6(2), pp.91-127 Zadah Khan, S., 2018 Starbucks Market Segmentation and Targeting [online] Ijbmi.org Available at: https://baristaschool.vn/ 2020 Văn hoá cà phê – “Hồn” Việt thưởng thức [online] Available at: Starbucks Coffee Company 2021 Espresso | Công ty Cà phê Starbucks [online] Available at: 15 ...Table of Contents Introduction 1.1 Short profile of that product 1.3 Aims: Analyze the impact of culture on consumer behavior Analyse the impact of culture on consumer behavior. .. target Even if the words, grammar, and pronunciation are correct, the meaning will be off Analyse the impact of culture on consumer behavior of Starbuck in Vietnam 2.1 Definition of culture and... behaviour in purchasing that product in that country 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