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Marketing Research Report Comm 410 - Professor Shults - Fall 2018 Group 8: Gaby, Tessa, Sydney, Phuc, Nancy 7 Sereotle euanvieks ’ e Table of Contents Executive Summary Research Objectives Methodology Mejor Findings Conclusion Recommendations Introduction Problem Definition Potential Benefits Intermal/External Data Situation Analysis Planning Areas of Concern Problem Scope Questions to be answered Organization Statement of Research Objectives Research Objectives Hypothesis Research Design Exploratory Research 9 Primary ResearchiSurvey Questionnaire 4 Data Collection Methods 14 Scaling Techniques 1 Population Definition 1 Sampling 4 Relabilty & Valicty 12 Sampling Drawn Properly 12 1|Group 8 7 Sereotle euanvieks on > Diffcultes in Data Collection 12 Research Findings 13 1, How Starbucks Rewards Helps Boost Customer Loyalty 3 2, How Starbucks Maintains its Customers 16 3 How Starbucks Can Encourage New Customers to use Starbucks Rewards: 7 Recommendations 19 Overall 19 Reward Members: 2 Non-Reward Members 2 References 2 Appendix 4 Custom bit ly link 24 Breakdown of Age % Breakdown of Gender 25 Breakdown of Ethnicity 2% Focus Group Data Analysis 2% |. Executive Summary % I. Introduction/Background 2% Ill Questions 2 IV. Study Design and Methodology a V. Finding/Results 2 VI. Conclusions and Recommendations 2 VII. References 28 2| Group 8 Executive Summary Gaby Research Objectives. For our research objectives we wanted to know the reasoning behind people's loyalty to Starbucks. What they liked about not only the company, but specifically about the rewards program. We then wanted to know specific reasons as to why the rewards members chose this program specifically over others. We then wanted to find out why the reasons behind those customers who aren't rewards members and what about the company andlor the rewards program deter them from joining. Methodology Our methodology included a focus group and a questionnaire. The focus group served as a starting point of where we wanted our research to go. Once we conducted the focus group, we were able to use the findings from there to write our questionnaire. The way we conducted our questionnaire was through a nnon-probabiity convenience sample. The questions we asked our respondents started of simple by asking how often they visit Starbucks, We then moved on to more in depth questions ike asking about the user friendliness of the rewards app and how the Starbucks Rewards program compares to other rewards programs. Another question we asked our respondents was to compare the Starbucks Rewards program to other rewards programs and pick out what they liked about the other rewards programs. Our survey software made the graphs with the raw data for us and using those graphs, we were able to see how non-rewards members and rewards members alike stacked up against each other Major Findings One major finding we found while conducting our research was when we asked respondents if being a rewards member brought them to Starbucks more often, over half responded yes. This showed us that those who are on the rewards program are loyal to the Starbucks brand. Another major finding was the reason why some of our respondents weren't a Starbucks Rewards member. Forty-one of our seventy-one respondents said the reason they weren't a member was because they don't go to Starbucks often enough They couldn't justify becoming a member of the rewards program if they didn't visit Starbucks often enough, 3| Group 8 Seiolcoueni een a. Conclusion Overal, our research supports our hypothesis. After conducting the focus group and looking at the data gathered from the questionnaire, meny have agreed that giving more frequent and valuable rewards would boost loyalty emong current rewards members. Fixing the app glitches and providing clear instructions will encourage non-members to join the rewards program. If Starbucks gave more information about the program and the rewards one can earn, it would encourage non-rewards members to join the program Recommendations ‘A recommendation we can make in the future is improve the Starbucks Rewards app to make it more user friendly. In both our focus group and questionnaire, our respondents commented on how the app wasn't the most user friendly. Our respondents sai that the app glitches a lot and that is one reason why they are deterred from joining. Another recommendation we can make is instructions on how to sign up. ur respondents didn't ike how there were no instructions on how to sign up and how to get the rewards. (One final recommendation we can make is advertising the program to non-members through emails and the baristas. If they want more people to join the program and want non-members to keep coming back, the baristas should mention it atthe transaction Introduction Tessa/laby Problem Definition The problem we are facing is whether or not the Starbucks Rewards program encourages consumers to remain loyal to the Starbucks brand. Knowing this information, we can then decide if the Starbucks Rewards program is beneficial for the company. For our research, our target market is, college-aged consumers, Two aspects we know that could potentially help the relationship between Starbucks Rewards and college students is that students lke to stay caffeinated and students like to save money. Starbucks’ competitors, such as Coffee Bean and Dunkin’ Donuts, have since begun their own rewards programs to increase competition. With newfound competition, Starbucks needs a way to ensure that they stay relevant inthe coffee market. By conducting a focus group of college-aged coffee drinkers, as well as creating an online survey, we wil find out f the Starbucks Rewards program is keeping 4| Group 8 Starbucks) Rewards . « >» 29 customers loyal. The information we need will be how many of those we survey are Starbucks Rewards members, as well as how many of those who are users are active users of the program. Additionally, we will see what improvements could be made to the program to potentially get new members to join, as well as increase the satisfaction of current members. Our research objectives are to discover if the Starbucks Rewards program increases customer loyalty among college students. Potential Benefits Potential benefits for improving our problem would include a boost in customer loyalty and continuing growth of the Starbucks brand. Of the 75 milion customers that come into Starbucks every month, only 11 milion of those are rewards members. CFO Scott Maw said they are missing a huge opportunity with those non-rewards members. Their strategy to remedy that is to make mobile ordering and WiFi connectivity much easier. Now, they've made it where you log into Starbucks WiFi once, using your email and everytime you visit, you're instantly connected, He says that this will connect them cigitally with their non-tewards clients and by having their emai, it wil send promotions and other goodies to help increase foot traffic. By March 2018, the Starbucks Rewards program grew 11 percent, which represented 37 percent ofthe overall sales at Starbucks locations nationwide. {ntemalExtemal Data Since the launch of the Starbucks Rewards program in 2009, Starbucks’ net revenues have been steadily increasing every year. In our online survey, we found that 55.9 percent of our 161 respondents are Starbucks Rewards members, while 42.2 percent are not, The other 1.9 percent of respondents are unsure of their membership status. When asked if being a rewards member encourages more trips to Starbucks than if they were not rewards members, 43.3 percent agreed that is does encourage them to go more. The ‘most split answer we received on the survey was if customers fel thatthe benefits they receive from Starbucks Rewards equalled the money spent at the store, On a scale of 1-5, our most popular answer was 3, with 30%. Clearly there is room for improvement in the benofits are of the rewards program, Situation Analysis The weaknesses in our SWOT analysis point out several concems for the company, the main one being imitation coffee shops. Large chains such as Dunkin’ Donuts and Coffee Bean are huge competitors with Starbucks, as well as smaller, locally-owned coffee shops. With all this competition afloat, how wil Starbucks keep its customers loyal? Cur goal isto discover if the Starbucks Rewards program keeps customers loyal to the Starbucks brand 5| Group 8 Sereotle eyes *, Planning How we planned to go about this research is by fit conducting secondary research. We looked at ‘what was already researched about Starbucks and what people thought about rewards programs in general. After looking atthe secondary research we went forward with primary research, The primary research included a focus group and questionnaire. We used the results from the focus group to write out the questions that were going to be on the questionnaire Areas of Concern There were some areas of concern we had during this process. The biggest area of concer for us ‘was whether or not we were going to have a large enough representative sample to work around. Because we didn't have the information for every single student at Cal State Fulleton, we couldn't do a quota sample lie we originally planned. Similar to the concem mentioned before, another area of concem for us ‘was setting a specific target demographic. We started off with only female college students, to including all college students, to everyone. Problem Scope ur problem scope had to be specific, but not too specific. We originally had a specific demographic that we wanted to target, female college students between the ages of 18-24 However we had to scratch that because we realized that we were not going to get a wide range of answers with that We then decided to target al college students at Cal State Fullerton. This choice was just broad enough but also just specific enough to allow us a wide range of responses, Questions to be answered When we conducted our research we made sure that we based it around the questions that we wanted to answer. These questions included 1. What made people decide to use Starbucks Rewards? What about the Starbucks Rewards program dd the users like? What improvements need to be implemented into the program? How frequent should the rewards be? Did the respondents use any other rewards program? 6 | Group 8 Seiolcoueni een a. Organization The organization ofthis project came in several steps. The frst step in our project was to identify a problem we wanted to research, After our problem was identified, we went forward and conducted secondary research. From the secondary research we did a situation analysis and research proposal When we gained the okay from our professor to move forward after we submitted our research proposal we conducted a focus group. With the focus group, we gained a nice insight into where we needed to go with our project. The focus group helped us formulate our questionnaire which we sent out to our friends and family. From the questionnaire, we were able to see some interesting findings that solcfied and were similar to the findings from our focus group. Statement of Research Objectives Gaby ur goal was to discover if collage students wore loyal to Starbucks Rewards and their reasoning behind it. What we know is that the Starbucks Rewards program offers several benefits to those who are members, including ¢ free reward on their birthdays, as well as a free beverage or food item every time they eam 125 stars (earning two stars for every one dollar spent means members earn a free drink for about every 63 dollars spent at Starbucks). In 2018, Starbucks gained 1.3 million more members for their rewards program, adding onto the 13 3 milion members already part ofthe program in 2017 (Whitten 1) Research Objectives. How Starbucks Rewards helps boost customer loyalty © How Starbucks maintain their current customers. ‘¢ How to encourage new customers to use the rewards app. Hypothesis ‘© Giving more frequent rewards will bring more new customers and boost loyalty amongst those who already have a rewards card 7 | Group 8 Starbucks Rewards” *, Research Design ney Our focus group served as a plot study and shaped our survey. Our participants gave us plonty of qualitative feedback that inspired some of the questions that we added to the survey. For example, one participant mentioned mentioned that she did want fo become a Starbucks Rewards member, but did not understand how to use the app. As a result, we added a question to the survey asking respondents to rate the ease of use of the Starbucks Rewards app. Roughly half of our focus group participants were rewards members, and the other half were not. This gave us the idea to have two sets of questions in our survey. One set was for rewards members, and the other set was for non-rewards members ur original plan for our population was to use Cal State Fullerton students, However, since we did not have access to a complete list of CSUF students, we could not get a true probability sample or sample frame and decided to open the survey to the general public. Instead we used a non-probabilty sample. The sampling technique we used was convenience sampling. We shered the survey link on social media including Snapchat and Facebook, and we asked our classmates, friends, family, and roommates to take the survey. Our survey was open for approximately a week and had 161 responses. The survey we wrote and distributed was descriptive research. Descriptive research measures relationships and correlations, and we felt that this was the most effective research design to meet our objectives forthe study. Descriptive research is also more efficient than other methods such as observational or experimental research. This research design allowed us to gather information about the domographics of Starbucks Rewards members and non-members, and it allowed us to gather qualitative feedback about the program. We distributed our survey end collected the responses on Google Forms. Web-based surveys the most efficient way to distribute the survey to as many people as possible, and they eliminate the possibilty of data transcription errors and administrator errors. Our survey questions used many balanced likert scales for responses. For example: Rate your overall satisfaction with Starbucks Rewards. ierely feremely besos ‘ates We chose to use a balanced likert scale for this question and similar questions because it gave the 8| Group 8 7 Nerina ar euytceeenli So Tt * respondent a neutral option, and also gave us insight into the intensity of ther feelings about the program, Had we used a dichotomous question scale and asked this question as a simple ‘yes or no" our results would be less accurate because there would be no neutral option. The ket scale alowed us to break our results into how many people liked the program to any degree, but also let us refine the data futher for more in-depth analysis. Exploratory Research Phut Through our exploratory research process, we found articles that touch on the topic of reward programs and their correlation with customer loyalty in the big picture. According to the Chiof Marketing Officer (CMO) Council, 61 percent of marketers believe that loyalty reward program participants are the most profitable customers, while 65 percent view customer loyaity program investments as an essential part ofthe marketing mix. With that, the main point of loyaty program is customer retention, which focuses on providing customers’ engagement. The more engaging the reward program is to the customers, the higher chance thatthe customers will stay loyal to the brand, The reward program serves as a bridge/gateway that connects the brand and the customers by helping the brand to understand their customers better, as woll as helping the customers feel appreciated by the brand. While some customers prefer ‘hard’ rewards, others lke ‘soft’ rewards. Therefore, brands need to find a balance between both ends of the spectrum, so that they can satisfy different types of customers. Rewards programs should be more empowering to the customer because i wll focus on their needs, benefits, and experience. We also did research on Starbucks as a brand and the reward program they offer. Starbucks as a brand was founded in 1971 in Seattle, Washington and currently has over 28,000 locations worldwide. The rewards program was first introduced in May, 2008 and went through changes throughout the years to the “Gold Star Reward!” they have today. Starbucks recorded around 75 millions customers every month, but only 11 millon of those customers are Starbucks Reward members. According tothe latest report from CNBC for the second quartor of 2018, Starbucks Rewards program members have increased steadily, gaining over 1.6 milion new members over the course of one year, since early 2017. These rewards program members accounted for over 39 percent of Starbucks’ half year total sale for 2018, Here is a brief explanation of how the reward program works. Customers eam two “stars” for every one dollar spent When a customer eams 125 stars, they are rewarded with a free beverage of their choosing, ranging between handcrafted beverages to ready-to-drnk bottled beverages. The rewards program has two levels: {green and gold. A customer sin the green level i they have anywhere from 0-299 stars. Once they surpass 300, they are now gold level and are rewarded with a personalized gold card 9| Group 8 Starbucks) Rewards kK We also conducted a focus group study with seven participants within the age range of 19-24 to ‘grasp a general idea of what college students think of Starbucks Rewards. There were some positive and negative opinions regarding the rewards program and how it works. Overall, most participants agree that the Starbucks Rewards app is quite convenient and easy to use, and they are satisfied with the program, but they agreed that some aspects can definitely be improved. The four participants with Starbucks Rewards memberships unanimously agreed that they do not visit other coffee chains and that being a rewards member motivates them to visit Starbucks often. Benefits from the reward program that they enjoyed are free birthday drinks, double-star days, free in-store refills, and 50% off drink events. For the three participants who were not reward members, the setup process and the accessibility of the program ‘was difficult and confusing to follow. They also expressed their interest in becoming members after we explained to them the setup process with the apps, as well as the new changes of the program. One thing the participants want Starbucks to improve about their reward program is to give out more events and reward stars. They thought that the rewards from the program are not worth the amount of money they spent with the brand and felt disappointed in how infrequent the rewards were. Despite that, they would stil continue to use the reward program, as they feel the rewards, even though they are small, are still “better than nothing” especially if the customers are shopping there anyway. Primary Research/Survey Questionnaire Tessa (&-€)/Sytney(F) Data Collection Methods We collected data by conducting a focus group and by using an online survey to determine ‘whether or not being a member of the Starbucks Rewards member increased brand loyalty, as well as overall satisfaction with the program. We included questions to get opinions on other rewards programs, and what users would do to improve the program. Scaling Techniques In our survey, we use a balanced scale, meaning we have the same number of postive and negative answer options, including a neutral point. Most of our questions ranged from three to five answer choices. We use both multiple choice and fil-in-the-blank questions in our survey. Our survey systom Google Forms, collected our scaling information for us 10 | Group 8 Starbucks Rewards” *, Population Definition For our focus group, the population of participants were college students between the ages of 18-24. For our online survey, 54.2 percent of respondents were from ages 20-22, 17.6 percent were between the ages 23-25, 155 percent were under 20, 7.7 percent were 30 and older, and 5 percent were 26-28 Sampling We originally wanted to conduct a quota sample, however, because it was physically impossible to get tho information of every single student that atfends Cal State Fullerton, we had to conduct a non-probabiity convenience sample. This allowed us more freedom to gathor samples from more people across various platforms. ‘A sampling units a singular value within @ sample base. Our sample base was people within the ages of 18-24. Our sampling units included all mele and female students within that age range. Those students come from other classes and organizations on campus. Reliability & Validity We used several measures to ensure that our focus group and our survey were reliable. We eliminated administrator bias on the survey by distributing the questionnaire online. We gave respondents the link to the survey, and we only told them the topic of the study. This way, there would be no bias in the way that certain questions were asked In our focus group, we minimized administrator bias by asking very open-ended questions lke “How do you feel about Starbucks Rewards?”, and avoiding leading questions such as “Don't you like Starbucks Rewards?” The fact that we were not affliated with Starbucks also helped relieve administrator bias because respondents knew we were not necessarily looking for positive answers. This allowed them to be more honest with their responses. We know thatthe data we collected is valid because it helped us reach our objectives and learn what we intended to. Our first objective was to determine how Starbucks Rewards helps boost customer loyalty. We learned that the program boosts customer loyalty because ofthe high level of customer satisfaction with the program, Our second objective was to learn how Starbucks maintains its current customers, and we determined that the rewards program is a key factor in customer retention. Our last objective was to leam how we can encourage more customers to join the program. We determined that the best way to do this is to explore the possibilty of increasing the frequency and value ofthe rewards. 11 | Group 8 Starbucks Rewards” x” Sampling Drawn Properly Since we chose not to use CSUF students as our population because we could not get a sampling frame, we used a non-probabilty convenience sample. We got responses from a diverse group of people who were a mix of men and women of different ages and ethnicities, Difficulties in Data Collection Our biggest challenge in data collection was finding enough respondents to take the survey. Since our original plan was to use Cal State Fullerton students as a population, our goal was to get 397 students to take our survey. Since we opened our survey to the general population, and our respondents were from across Orange County, we should have aimed for a much larger sample. The time constraint onthe projact kept us from getting more responses. Research Findings Our objectives for the survey were to learn: How Starbucks Rewards helps boost customer loyalty ‘© How Starbucks maintains their current customers. ‘© How to encourage new customers to use the rewerds app. 4 How Starbucks Rewards Helps Boost Customer Loyalty From our survey, we found that the Starbucks Rewards program encourages brand loyalty through customer satisfaction. We asked Starbucks Rewards members to rate their satisfaction with the program on a scale of one to five . One represents extremely dissatisfied, and five represents extremely satisfied. 57 8 percent rated their satisfaction as a four. Over 25 percent rated their satisfaction as a five, Only about two percent rated their satisfaction as a two, and no one rated it as a one. 12 | Group 8 cf Stanbucks Rewards ~ . % Rate your overall satisfaction with Starbucks Rewards. eo 40 00%) 22%) We also found that most Starbucks Rewards members, 71 percent, believe that Starbucks Rewards outperforms other coffee shop rewards programs. About 26 percent were neutral, and only two respondents thought Starbucks Rewards was inferior to other coffee shop rewards programs. Rate Starbucks Rewards in comparison to rewards programs at other coffee shops. 90 responses 40 111.1%) 100.1%) 1 2 We also asked our respondents for feedback on the ease of usability of the Starbucks Rewards app. We were surprised to learn that the vast majority of users were satisfied withthe app's usability Respondents rated the usabilty on a scale of one to five, one being the most difficult to use and five being 13 | Group 8 Ly Starbucks) Rewards . the easiest to use. Over 91 percent of users rated the app’s usability as a four or a five. We got several comments in the qualitative feedback section of the survey about how much some rewards members liked the app. However, we also got several comments in the open response section that the app glitched or signed them out oftheir account. 2. How Starbucks Maintains its Customers Ninety of our 164 respondents wore Starbucks Rewards members. We asked respondents how strongly they agree with the following statement: Being a Starbucks Rewards member encourages me to go to Starbucks more often than | would if | was not a member. On this chart, one represents strongly disagree and five represents strongly agree, We found that approximately 66 percent of Starbucks Rewards members agreed or strongly agreed that the rewards program brings them to the Starbucks more often. This suggests that the program encourages brand loyalty Being a Starbucks Rewards member encourages me to go to Starbucks more often than | would if | was not a member. 90 responses 40 0 20 10 — 0 a 14| Group 8 Stanbucks Rewards a ‘ ‘As we predicted, the frequency of purchases had a strong positive correlation to membership in the Sterbucks Rewards. Fifteen percent customers who said they go to Starbucks “very rarely or never" are rewards members, 56 percent of customers who went to Starbucks ‘not every week, but once or twice @ month’ were rewards members, and 96 percent of customers who go to Starbucks at least three times a week were members. This suggests that being a Starbucks Rewards member may increase brand loyalty and help retain customers. Percentage of Rewards Members Based on Frequency of Purchases Very Rarely or never Once Every More OneorTwkea OncearTwkea Three or moretimes Month Week aWeek on Frequency 15 | Group 8 cy A Starbucks Rewards , % ‘Count of Are you a How often do you Starbucks Rewards buy a beverage at member? ‘Starbucks? Coles Are youa Starbucks = We emma Rewards member? a No Not Sure o 2 1 3 Yes 3 4 22, 2625 20. ‘Grand Total 20 24 a7 326 161 How Starbucks Can Encourage New Customers to use Starbucks Rewards: We asked our respondents who were not Starbucks Rewards why they were not enrolled in the program. Forty-one of the 68 non-members, 57.7 percent, selected "| don't go to Starbucks often enough” as one of the reasons for not enrolling in the program. About 21 percent said they ere not enrolled because they don't understand how the program works. About 25 percent said they aren't members beceuse they don't drink coffee. Approximately 11 percent said that they aren't enrolled because they don't know how to sign up. This suggests that Starbucks Rewards enrollment would increase if more information on the program and the rewards that members can earn was easily accessible, We can also infer that Starbucks may see an increase in members if rewards were distributed more frequently since many of our respondents don't think they go to Starbucks offen enough to justify joining the program, 16 | Group 8 Reasons for not enrolling in Starbucks Rewards Never Heard Dor'tDrink Don'tDrink Dor'tGo Don'tKnow Not Enough Appis —Dor'tKnow oe Coffee Coffee Often HowtoSgn Benefts Dificuitto. | How Starbucks Enough up Use Progam Werks We asked non-members what would motivate them to join Starbucks Rewards. We allowed them to check al options that apply, and about 39 percent said that more frequent rewards for members would motivate them to enroll, end 42 percent said that larger rewards would motivate them to enroll, Starbucks may need to conduct more research to find the ideal balance between the velue of rewards and the frequency of those rewards. Thirty-one percent said that more information about the pragram would motivate them to sign up. We also asked respondents to tell us about other rewards programs they are members of and why they lke them, Several non-members mentioned that they lke rewards programs at movie theaters because they like the flexbity of choosing how they will redeem their rewards points. Several respondents also commented that they like rewards programs that offer frequent coupons and discounts such as the Target Red Card, Michael's Rewards, or CVS Rewards. This shows that Starbucks should do more research about how more frequent rewards could impact seles, We also asked our respondents who were Starbucks Rewards members to rate how strongly they agree with the statement: The benefits| earn from Starbucks Rewards are worth the money | spent fo earn them, The responses to this question were less polarized. On the graph below, one represents strongly 11 | Group 8 disagree and five represents strongly agroe. Twenty percent voted that they disagreed to some degree, 30 porcent were neutral, but 50 percent agreed to some degree. Since only half of respondents are satisfied with the value oftheir rewards, Starbucks should do research to determine if more valuable rewards would The benefits | earn from Starbucks Rewards are fair for the money | spent to earn them. 90 re 30 2 increase sales. Recommendations Phut Overall: Overall, Starbucks’ customers ate quite happy with the services that the brand provided. Our survey result definitely did help prove that our hypothesis is right regarding Starbucks reward encourages to visit the brand more often, which help boost customer loyalty for the brand. The Gold Star reward program is the main way Starbucks builds up their customer fan base and increase their customer retention. They help maintain their current reward members by promotions such as bonus stars challenges, 18 | Group 8 Starbucks) Rewards> ~ .

= students are focused on their own classes and finals so they might not be wiling to take the time to participate. ‘Another limitation that we faced when we prepared these studies was creating an appropriate sampling frame. Initially we were going to focus on the femele college demographic at Cal State Fullerton within the age range 18-24, but then we realized it would be a dificult task to collect the contact information ofall those women at CSUF. We then decided it was best to use a non-probability sample and change our subjects to CSUF students in general, both male and female between 18-24 years old. A suggestion for future directions in the data collection process would be that it needs to be conducted with a decent amount of time to make sure we are prepared. With more time we would more likely be having enough people to conduct a proper focus group and also be able to distribute the questionneires with more time and ease to get enough respondents and keep it open for atleast a month. We may also want to think about other methods that cen be used to distribute the questionnaire. Perhaps handing them out at a series of Starbucks locations to reach our target audience directly, would give us more of the information we seek. 21 | Group 8 7 Nerina ar euytceeenli So Tt * References (n.d.). Retrieved from https://ww.loxcel.com/sbux-fag, html Soper, T. (2048, June 22). As Starbucks shares and sales slump, coffee giant revamps rewards program and invests in tech. Retrieved from https:liwww geekwire.com/2018/starbucks-shares-sales-slump-coffee-giant-revamps-tewards-progr aminvests-technology! The History and Future of Loyalty Programs. (n.d). Retrieved from http:lwww futureofbusinessandtech convbusiness-solutionsthe-history-and-future-of/oyalty-progra ms Whitten, S, (2017, May 04). Starbucks rewards members can now earn even more stars atthe grocery store. Retrieved from hittps:liwww.cnbe, com/2017/05/04/starbucks-reward-members-can-now-earn-stars-at-the-grocery-st ore. html Whitten, S. (2018, April 26). Starbucks shares sink as sales growth fails to inspire. Retrieved from https:/www.cnbe.com/2018/04/26/starbucks-reports-second-quarter-eamings-2018 html 22| Group 8 2 | ” ? IR wf — Starbucks Rewards i z% 2 ._ Appendix Starbucks Net Revenues by year | | | Custom bit.ly link REFERRERS Locations: 23 | Group 8 a Sea lle

= Breakdown of Ethnicity What is your ethnicity? 160 responses, © BiackiAFican-American @ Hspanici.atino @ Asian Pacic Islander @ Native American @ white @ Flipine and white @ Hspanicnite @ Caucasian Filipino Ry Focus Group Data Analysis |. Executive Summary The purpose of this focus group was to determine if rewards programs promote customer loyalty and find how Starbucks can improve their rewards program to increase customer satisfaction, The focus ‘group method was used to initiate discussion end It was conducted at Cal State Fullerton with 7 participants. We found that the participants who are rewards members would like to see more rewards that don't require accumulating a lot of points over a long period of time. We created a hypothesis that giving more frequent rewards will bring more new customers and boost loyalty amongst those who already have a rewards card Il. Introduction/Background ‘We conducted a focus group to learn about the opinions and attitudes about Starbucks reward programs to help Starbucks implement ways that will enhance the customer's experience with the rewards 25 | Group 8 Starbucks Rewards” %, program, We want to get an idea about the current satisfaction members have with the program and what they feo! should be improved or added to their membership. We want to know what motivated these people or discouraged them to sign up for the rewards program in the frst place. We gathered 7 participants all in the age group 19-24 at CSUF to participate inthis study. lL Questions ‘What ate your thoughts on rewards programs? What are your thoughts on loyalty cards? ‘Are you a loyalty card member? About how many ofthe loyalty cards do you have and how many do you actually use? What are some of your favorite loyalty programs and why? ‘What enticed you to become a loyalty card member for this company? ‘Would you rather receive a tangible asset with every purchase or wait until you've accumulated enough points to get a reward? How often do you go to Starbucks? How often do you go to other coffee shops? ‘Are you a Starbucks rewards member? Why did you become a rewards member? Does having a rewards card from Starbucks encourage you to buy/\visit more from there? ‘What is your favorite feature ofthe loyalty program? Do you visit single standing Starbucks stores or ones in the mall? ‘When you go to Starbucks, do you use the mobile app to order and pay or waitin lino? What is your demographic information? IV. Study Design and Methodology We conducted this research at the Pollak library on campus at CSUF. We reserved a study room at the library to create a private and comfortable environment for our participants. We had a note taker, videographer, and a moderator to lead the research. A limitation we experienced inthis process was selecting a date when the participants, note taker, moderator, and video recording person were ll available. We chose to conduct a focus group because it's an effective way to leam about the consumer's, attitudes, motives, and feelings. It’s also best because one person's response can stimulate other's responses and help further discussion about new relevant topics, concerns, or suggestion. We developed questions to help further discussions about what consumers really enjoy or dislike about the rewards 26 | Group 8 7 Nerina ar euytceeenli So Tt * program, We used the recording of the focus group and the note takers to notes to review and analyze the information we received V. Finding/Results Participants shared they are familar wth loyatylreward memberships provided by different companies such as Starbucks, Bath & Body works, Regal Cinemas, Victoria Secret, Sephora, a nail salon, Pacsun, and B's restaurant. 4 out ofthe 7 participants were Starbucks reward mombers. Those seemed to be more interested in giving their feedback because they would lean in closer in comparison to the ones ‘who seemed neutral and laid back because they were not part of the rewards program. This lack of engagement of some participants could be a limitation when analyzing the data. Overal, they seem to like the concept of the rewards programs although they had some concerns. 2 participants responded that they prefer instant grattication rather than accumulating points that could take a while to accumulate in order to receive a special oer. 1 stated she didn't mind waiting i the reward was valuable enough. Participants stated that convenience (easy sign up), instant discounts, and birthday rewards encouraged them to sign up for certain programs. Some stated they prefer on the spot rewards rather than accumulating x amount of points. One stated she liked having the option to choose to use the current amount of points accumulated for a specific reward or waiting to collect more points for a bigger reward. How frequently the participants, visit Starbucks ranged from once a week to 2-imes a week to 1 every 2 or 3 months end up to 1-2 times a day. The 4 Starbucks rewards members stated they never go to coffee shops other than Starbucks. This gives us a correlation between loyalty and rewards programs. They mentioned that one disadvantage was that the reward program's benefits were not avaitable at all Starbucks locations, The participants agreed their favorite part of the rewards program was the mobile app because it features mobile ordering and they can digitally present their reward card on their phone. 1 participant said they started to use the rewards program more frequently when Sterbucks release the app. The three participants who don't have Starbuck reward program, they said they don't have it because it was too complicated and the couldn't figure out how toset up. VI. Conclusions and Recommendations \We concluded that the Starbucks reward cards promote customer loyalty. People with Starbucks rewards program tend to visit only Starbucks rather than other coffee shops. We learned that the free birthday drink is the biggest reason why people/participants open their reward account. We also found that ‘most participants would prefer to get more instant rewards rather than waiting so long to accumulate so many points. We also concluded that the Starbucks app is one the feature members enjoy the most. We recommend that Starbucks should add more small rewards to enhance and increase their satisfaction with 2T | Group 8 Starbucks Rewards" > = the reward program. For further research we might want fo evaluate if giving more frequent rewards or ving more valuable rewards would have a dramatic increase in sales Vil, References: We had 7 participants overall, 5 females and 2 males. Of the 7, 3 were fourth year students, 1 third year, 1 second year, 1 first year and 1 was not enrolled in school at the time. The age range of the participants were 19-24, right in our target range. The names, age and phone numbers of our participants are as follows Cassidy Figueroa /21/ (760) 330-0311 Danielle Sebring /19/ (909) 234-3065 Brenda Armenta /21/ (909) 549-3172 Zac Thorn /19/ (B01) 836-9635 Lauren Pugmire /23/ (801) 616-8638 Amy Czerwinski /23/ (714) 745-1795 Andrew Chung /19/ (657) 253-1650 28 | Group 8