Market Dynamics In The Sale Of Cappuccino In China

Student’s Name Professor’s Name Course Date Market dynamics in the sale of cappuccino in china China’s huge population provides a dynamic market for the sale of cappuccinos. Starbucks has enjoyed the monopoly of supplying cappuccinos in China for some time and the decline of their projected long term sales to as low as 1 percent, shows the aggressiveness of their new competitor Luckin Coffee in the market. This essay is going to discuss the competition launched by Luckin coffee into the cappuccinos’ market that has been dominated previously by Starbucks Company in the aspect of customer orientations, methods of framing market promotion, conflict management strategies, and strategies of improving competitiveness. Customer Orientations The cappuccinos market in China is vast as there are high-income earners as well as the low-income earners. Starbucks was created mainly to take care of the high earners bracket, whereas Luckins’ emergence in the market will accommodate both if not all kinds of consumers at a time. Luckin offers convenient means of settling the bill, by using mobile money banking. This has made it convenient to most consumers as they can easily catch up with a cup of tea and pay conveniently at the comfort of not having to carry solid money with them. Luckins’ accessibility is a huge boost to its operations as the customers can access them at any time of the day while attending to their routine duties. This compared to Starbucks is a noble move as Starbucks stationed their stores in specific zones to capture residents or workers and school student of that particular area (Herhausen, Dennis 25). Luckin offers home deliveries to its customers hence taking care of those at home willing to grab a cup of tea at the comfort of their home or offices. In contrast to this, Starbucks offers lounging services to its customers as they own large stores. This only enables them to access customers having office meetings at the workplace or meetings between family and friends. Luckins’ cappuccino is cheaply available as it is 30% cheaper compared to Starbucks, this enables a customer with less cash be able to afford a cup of coffee as it offers a cheaper alternative. Luckins' willingness to offer steep discounts to its customers as well as free deliveries is a way to convince its customers of their desire to offer better services at the expense of their profits hence establishing trust between them and their customers. Luckins’ promise of expanding and the establishment of more stores across the country woes more customers as they target to capture more customers across the country. Methods of Framing Market Promotion Methods of framing promotions include monetary and non-monetary strategies. From the authors’ own words, monetary customer discounts affect the choice of the customers and set a preference of where they wish to purchase. Media hype is also a popular way of promoting a company’s products. In this strategy, the products are coiled in a presentable manner addressing the specific issues affecting the customers and offering solutions to those challenges (Shimp, Terence 536). This communicates a repetitive and robust message that can be tuned in with a familiar common song for the customer to associate the product with thus making the advertisement more realistic and easily takes its message home. These two strategies are popular as they are consumer friendly and access a wide audience including at the comfort of their homes. These strategies are capital intensive and can be unrealistic if applied for a longer time frame. Despite Starbucks’ huge capital dominance, Luckin has persisted in using these specific strategies as they forge ahead in the highly competitive market. It raises questions as to whether Luckin will be able to sustain its operational costs in the future given the uncertainties of the cappuccinos ever-changing the market. In this regard, these promotional strategies can be employed in other industries regardless of the type of product being promoted. This is due to their effectiveness and practicality in the current market made...