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摘要：卢金咖啡自2018年初开始成为名人，在很多方面融入了我们的生活。每天乘电梯上下班，我们可以看到Luckin咖啡的广告，也可以看到微信上的免费咖啡分享链接，人们把它比作星巴克，虽然在定位和商业模式上存在很大的差异。作为星巴克的表面竞争对手，Luckin咖啡展示了它的成功。在比较的背后，我们将看到他们如何在以下内容中“竞争”，并最终确定他们是否是真正的竞争对手。
Abstract:Luckin Coffee becomes a celebrity since beginning of 2018.It has been integrated into our life in many ways. When we take the elevator to and from work every day, we could see the advertisement of Luckin Coffee as well as the link from Wechat of sharing free coffee.People are comparing it to Starbucks, and although differences abound in positioning and business models. As superficial competitor of Starbucks, Luckin Coffee shows it success. Behind the comparing, we shall see how they “compete” in the following content and to finalize if they are real competitors.
1. Analyze a Luckin coffee shopXiaoqi. Zheng (Mike) ID:8301262571。分析一家乐金咖啡店小七。郑（迈克）身份证：830126257
Taylor和Francis（2005）说，“作为消费者，我们不断地受到不同的体验和影响。我们中的一些人比其他人更容易受到变化和影响，但没有人能像他们出生时一样经历人生。我们对环境的一些反应是因为我们的心理构成。当我们的情况发生变化时，机会就会出现，当我们受到更广泛的影响时，我们可能会以积极或消极的方式作出反应。环境的变化可能会引起我们内在的需求，或者在我们的消费模式中促进新的需求和需求。他们设法将线上和线下的营销工作和零售渠道融为一体。卢金咖啡正在以一种新的方式进入市场。
Taylor and Francis (2005) said that “As consumers, we are continually exposed to different experiences and influences. Some of us are more susceptible to change and influences than others, but nobody goes through life remaining the same as they were at birth. Some of our responses to the environment are because of our psychological makeup. As our situations change, opportunities emerge as we become subject to a wider range of influences to which we might respond in a positive or negative manner. Changes in circumstances may arouse innate needs or promote new needs and wants in our consumption patterns.”Luckin Coffee embrace the new retail concept. They managed to blend in their online and offline marketing efforts and retail channels. Luckin Coffee is entering the market in a new way.
1.1 Luckin coffeeExperience Map1.1 Luckin咖啡体验图
作为一个消费者，我真正体验了Luckin咖啡的消费过程。正如你在经验地图下看到的。
As a consumer, I truly experienced the consumption process of Luckin Coffee. As you see under experience map.
Conclusions:
During the experience, the overall experience was good, but there were still lower-than-expected parts. There are several advices:
There is a business problem. Once the coffee is made or finished, it cannot be cancelled or modified for delivery. Suggest improvements.
There are no complaints and suggestions of function, and it is recommended to increase user feedback.
APP is not smooth enough,Luckin Coffee should create a WeChat mini- program, and they’re so convenient and even easier to share.
Fewer stores, suggested to increase offline stores
There is a problem with the packaging. When the coffee is delivered, the coffee is not hot. It is suggested to improve the packaging
Luckin Coffee should not only rely on online marketing, but also improve the quality of our products
The target group should cover more age groups
1.2The target group of Luckin Coffee
Now the domestic Coffee market is highly competitive. Luckin Coffee's ideais "product + service + culture" experience mode, use APP to complete reservation, self-deliver and other consumption methods. This not only reduces the possibility of queuing, but also saves users' waiting time. It can be seen that the target group of Luckin Coffee is a group of professionals with certain professional requirements on Coffee -- urban white-collar workers
1.3 The Price level of Luckin Coffee
Starbucks, Costa, Luckin Coffee, three coffee comparison, and the same latte has different capacity, beans, flavor and price. Starbucks has high quality and price (30RMB), Costa medium quality and price (28RMB), and Luckin coffee high quality and low price (24RMB).as you can see under “Price / Quality Strategies”
The price level of Luckin Coffee is Super Value
1.4 Luckin Coffee positioning level in the Maslow pyramid of needs
In fact, today's instant coffee (such as Nestle) meets only the first level of physiological needs; the high - grade self - living coffee machine can meet the physiological needs and at the same time give consideration to certain emotional needs. The coffee shop can meet the needs of the first, second and third levels at the same time. Only consumption at a higher level of Maslow demand is the direction of the future.Luckin coffee abandons the third-level social needs, focuses on the "physiological + emotional" needs, cancels the on-site food and turns it into a takeaway, and maximizes the cost.
2. Analyzing Starbucks
2.1 Starbucks Experience Map
From the analysis, we can see this Starbucks coffee taste good, but in the morning the line is too long and moves slowly, it will affect the time of office worker. They need adding barista or improve process in the morning management. Otherwise, they could divide into relax zone and chatting zoo to improve customer experience satisfaction.
2.2 The target group of Starbucks
The target market for Starbucks in China is the first-class city, developed cities in coastal region and relatively developed secondary cities. So their target group is the people who have advanced education, higher income, coffee lover and random coffee consumers. This group people belongs to the upper class pursuit of taste and the middle class pursuit of fashion.
2.3 The Price level of Starbucks
2.4 Starbucks positioning level in the Maslow pyramid of needs
Starbucks aim to build a space with leisure oriented, and let customer have anElegant and comfortable experience. Their slogan is the top quality coffee shape unique humanistic spirit and make customer feel coffee aroma and spiritual literation.Starbucks coffee isn’t just coffee, it is sensory experience, emotional experience and action experience. So Starbucks positioning level belongs to social needs in the Maslow pyramid
3. Comparing Starbucks and Luckin Coffee Shop
3.1 Product Competitiveness
To compare between Luckin Coffee and Starbucks Coffee, we went to both stores to make an evaluation for the competitiveness. Based on the Competitive table below, we can see the strength of Luckin is the price and convenience. Many Starbucks stores are located at expensive, high-traffic CBD buildings which make the rivals cannot survive. But most Luckin outlets are not in such spots, they put their outlets near the CBD or shopping malls which are cheaper to rent. This reflects their marketing strategy is different.
Competitive table
Coffee Brand Taste Quality Price Convenience Location Total
Luckin Coffee 6 7 9 8 8 38
Starbucks Coffee 10 9 7 #p#分页标题#e#7 10 43
From the table, we can see having the convenient, high visibility and high traffic location is more important for both companies. Starbucks is affordable luxury in China, approximately same prices as New York, despite being having 1/6th of the GDP per capita. Luckin is trying to downgrade the luxury product by offering a similar experience with lower price.
3.2 Strategic planning comparison
As Luckin’s CEO said, they don’t have the time line for profit, what they care about now is the number of users. In another way, their strategy currently is to increase the market share, but the target customer is not overlap too much with Starbucks. Luckin coffee's target customers are not the coffee lovers and people who really understand coffee. Their main customers are those white-collar workers and new consumers who can start after solving “price and convenience" issues. These customers don't know much about coffee, and they are not able to taste the subtle differences between different baking beans and degrees. Luckin is focusing a lot on digital and opening many stores for pickup, relax and delivery. Their strategy is to use technology plus amount of stores to increase convenience to attract customers, and to pull their customers to their locations so that they can create the large potential undeveloped market, that’s why Luckin falls in midway between cost leadership and differentiation in mass market.
Starbucks is not only selling a lot of coffee beverage, but it is also selling an experience, a “third space” in your life so you can sit there to relax and chat with your friends, colleague. Starbuck have built the customer loyalty gradually for those high value consumers. The deal with Nestle will dramatically accelerate the new market development. The program for mobile ordering and delivery in China with Alibaba will definitely help them to against with Luckin’s new retail mode. With these activities, we can see Starbucks developed a long-term vision to localize their products to keep their position as the premium coffee brand in China.
3.3 Elements of the Product
Luckin Coffee is startup company with internet DNS. The gowth speed is really extraordinary as it took Starbucks about 12 years to open such many stores. But when we look at the elements of both brands, they are focusing on different areas and customers. All the features of Luckin product are about to gain more cusomters so they can have more market share. When we look at the elements of Starbucks product, they provide the features which make the consumers feel confortable and high value experience.
Elements of products
3.4 Conclusion
The average coffee consumption in China is only 5 cups per person and per year (20 in first-tier cities like Beijing, Shanghai, and Guangzhou), compared to 300 in the US and 360 in Japan. Since immensely profitable and with so much room for growth, both companies focus on their specific segment in the huge market by developing the individual strategic with less overlap products. Luckin Coffee targets to gain more customers by using the new retail mode while Starbucks concentrates on the high-end customers and enhance the customer loyalty to secure its market leader position. Luckin currently is selling the coffee products by using the internet mind, and Starbucks is not only selling the coffee itself, but also integrating the products and services into people’s daily life.
4. Stages of Product Life Cycle for Starbucks and Luckin Coffee Shop
Starbucks was founded in Seattle in 1971; Over the past 47 years, Starbucks has become the largest coffee chain in the world, Starbucks selling more than 30 types of coffee beans, hot and cold drinks, desserts and cups. More than 21300 stores have been established in North America, South America, Europe, the Middle East, and the Pacific area, Starbucks is the most famous coffee shop in the world.
In the past, Starbucks has already passed the development and Introduction period. In the early period of entering the market, people had less knowledge about Starbucks coffee even coffee, and people would not choose coffee as a drink, therefore there was the slower sales of coffee. The strategy adopted by Starbucks is word- of – mouth marketing and experience marketing, delivering the value of coffee to customers, and setting up the right price, place, promotion, product which is their smooth investment period.
Now, Starbucks is in a period of growth, their profits have changed from negative to positive. For product, the has personalized service (writing costumer names on the cup), and the correct values are recognized by more consumers, leading to profit growth. Starbucks pursues the quality of their product, constantly develops new tastes to cater customers from different countries, chooses a business area or shopping center area for their shop, designs the special stores in different countries or regions, they also have promotion in the holiday, such as 50% off second coffee, and the price is also in line with the income.
In the complicated Chinese market, Starbucks have also won a place; it is very remarkable that many Chinese customers give up the traditional tea and choose Starbucks coffee. Qinshi.Chen and Feifei. Zhang think “In the near future, Starbucks will enter maturity, and the product penetration rate at maturity is close to the maximum. The brand's product strategy during this period is to extend maturity and maintain relatively stable sales and market share.” Therefore, Starbucks should make customers buy more frequently and try to guide the market.
Starbucks is at the maturity stage of the Product Life Cycle since it is an already established company that considers increasing it is market share while Luckin is at the growth stage of the Product Life Cycle since it is instead focusing much of it is efforts towards introducing it is products. The activities in the different stages of a product’s life cycle are presented below.
5. Conclusion whether Luckin is competitor to Starbucks
Luckin and Starbucksare not competitorfrom our point of view. The reasons are firstly their target group is different. Luckin is targeting middle-class and above customers, compared Starbucks is targeting high-end income customers. Secondly from external analysis, their generic strategy is different. Luckin’s strategy was starting from differentiation in niche market and being in the middle of mass market at present. Starbucks starts from differentiation in niche market and developsstraightly into mass market. Thirdly, from internal analysis, elements of products, Starbucks sells relax and leisure rather than coffee and drinks. Luckin at the moment, sells convenience. Fourthly, Luckin was founded at the end of 2017 and it is in introduction phase while Starbucks was founded in 1971 and it is insteady phase of growth.
It is clear that the Chinese coffee shop industry is in a red sea market, with competition particularly fierce, with 140,000 coffee shops in China in 2018.
The competitive structure of the coffee industry is Monopolistic Competition. There are many competitors, the entry Barriers are very low.Product Differentiation, with Many Substitutes. Type of Competition is Substitution competition. The coffee that can be substitutes because have similar features and provide the same basic function,For example, juice, milk tea, tea, etc.So the actual number of competitors is far greater than the current number, because the entry threshold is very low, basically do not need a large number of fixed assets, some new coffee shops can use the Internet in a short period of time for brutal growth.
However, according to the latest Internet Statistics, Starbucks still occupies a dominant position in the Chinese market.
By comparing Starbucks with luckin coffee, it's clear that Starbucks has an advantage in how to make a good coffee shop. Starbucks is a premier roaster, marketer and retailer of specialty coffee. Through its various value-added services, the company not just sells coffee but also creates a differentiating coffee-drinking experience to its in-store customers and meets their unstated needs. Starbucks has done better in improving customer experience and supply chain management. The biggest advantage of luckin coffee is the combination of online and offline. But Starbucks is also learning and using this model, and has made many progress. Luckin coffee also relies heavily on capital markets for cash subsidies, leaving them with no stable source of Finance and a need for continuous financing. Starbucks has no such problems at all.#p#分页标题#e#
References:
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Gîlmeanu, M.R. (2015) 'Theoretical Considerations on Motivation at the Work Place, Job Satisfaction and Individual Performance', Valahian Journal of Economic Studies, vol. 6, no. 3, pp. 69-80.
Martisiute, S., Vilutyte, G. and Grundey, D. (2010) 'Product or Brand? How Interrelationship between Customer Satisfaction and Customer Loyalty Work', European Journal of Interdisciplinary Studies; Bucharest, vol. 2, no. 1, pp. 5-15.
Vaisey, S. (2009) 'Motivation and Justification: A Dual-Process Model of Culture in Action', The American Journal of Sociology, vol. 114, no. 6, May, p. 1675.
Qinchi.Chen and Feifei.Zhang (2015) “Product life cycle and brand life cycle promotion
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Taylor and Francis (2005) “Management of Marketing”
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