Module

Marketing Management Practice

(PMAR01-6)
(NQF LEVEL 6)

FORMATIVE ASSESSMENT – ASSIGNMENT 2

PMAR01-6/S2 10/2021

Due Date 30 August 2021

Exam Date 21 October 2021

Marks 70

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 Assignment 2 (PMAR01-6/S2 10/2021)

Please note that this assignment (30 August 2021) is directly linked to the exam
being written on 21 October 2021 and should only be completed and submitted
if you are writing your exam on this date.

Total: 70 marks

Note to student: you will be penalised for the copying of theory without
explanation/application to the scenario provided. You should use the theory in
support of your own answer. Non-application will result in a zero mark being
awarded.

SECTION A (70 MARKS) – PARAGRAPH QUESTIONS

Read the following case study, as well as the paragraph about the concept of
‘influencer marketing’, before answering the questions that follow:

Case Study Part 1: The rise of at-home coffee consumption

Is at-home consumption heating up South Africa’s coffee industry?

Since early 2020, the Covid-19 pandemic has dramatically stirred up the global
and local coffee industry. Demand has increased significantly, largely driven by
consumers who stay home due to pandemic-related restrictions, who still want
to enjoy their favourite coffee drinks.

Consumers now seek at-home alternatives to their favourite coffee orders, as

well as brewing advice and equipment. To cater for this demand, multiple global
coffee players have introduced at-home versions of their products.

Insight Survey’s latest South African Coffee Industry Landscape Report 2021,
carefully uncovers the global and local coffee market (including the impact of
Covid-19), based on the latest intelligence and research.

In South Africa, the local coffee market experienced positive growth. Global and
local growth is driven by several factors, including increased at-home coffee
consumption.

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Coffee retailers, such as Costa Coffee, Pret A Manger and Starbucks, in
partnership with Nestlé, have all expanded their at-home offerings or launched
new product ranges for at-home use.

More consumers are experimenting with different at-home products and brewing
methods. This is particularly prevalent among South African consumers, who are
becoming more educated on home-brewed coffee and have increased access to
home-brewing tools.

At-home coffee consumption is set to continue to drive the coffee industry, both
in South Africa and across the globe.
Adapted from: Insight Survey, 2021. Is at-home consumption heating up South Africa’s coffee industry?
BizCommunity. [Online]. Available at: https://www.bizcommunity.com/Article/196/168/216840. htm l
[Accessed: 29 June 2021].

Case Study Part 2: Starbucks’ objective: make consumption a habit

South Africa: Starbucks aims to become a habit ‘rather than destination’…

Right now, Starbucks is a bit of a novelty. You have to convert that destination
consumer into a habitual consumer. Who is driving to a mall to get coffee in the
morning? It’s not happening,” -Adrian Maizey, Starbucks South Africa CEO.

Starbucks Corporation, the mother brand, celebrates 50 years of existence this

year. In 2021, the brand marks five years of operation in South Africa.

Starbucks Corporation operates 33 000 stores globally, while Starbucks South

Africa has grown its portfolio from 16 to 25 outlets, in locations including
Johannesburg and Cape Town.

Rand Capital obtained the Starbucks licence towards the end of 2019, when Taste
Holdings, the previous holder, left the food industry after a disappointing
performance. At that time, the Starbucks brand had been in South Africa for
three years and looked set to suffer a similar fate following the entry of Domino’s
Pizza.

“We […] walked all the way up to the cliff and didn’t fall off — unlike some of the
other brands associated with the prior owners. We have made it through Covid-
19. Now, we have to lay a foundation for the future, think of ourselves as a start-
up, and get to the 50th mark,” he says. Most importantly, says Maizey: “We have
to earn our keep. We have to earn our place in the market.”

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“We could have sat and waited,” says Maizey. “But we did not have the luxury of
a business that was profitable before we took over. The best way to do that would
be to build stores that are profitable.”

The irony of opening additional stores amid a pandemic and the economic
uncertainties which came with it does not escape Maizey.
Adapted from: Phillip, X. 2021. South Africa: Starbucks aims to become a habit ‘rather than destination’
says CEO Maizey. The Africa Report. [Online]. Available at:
https://www.theafricareport.com/85582/south-africa-starbucks-aims-to-become-a-habit-rather-than-
destination-says-ceo-maizey/ [Accessed: 29 June 2021].

Recommended sources to enhance understanding of the case study context:

Drink Stuff South Africa, 2020. Starbucks at Home Coffee Now in SA. Drink Stuff
SA. [Online]. Available at: https://www.drinkstuff-sa.co.za/starbucks-at-home-
coffee-now-in-sa/ [Accessed: 29 June 2021].

Starbucks, 2021a. Starbucks Coffee at Home. Starbucks at Home South Africa.

[Online]. Available at: https://www.starbucksathome.com/za/ Accessed: 29
June 2021].

Starbucks, 2021b. Starbucks at Home South Africa Facebook Page. Facebook.

[Online]. Available at: https://www.facebook.com/StarbucksAtHomeZA/
[Accessed: 29 June 2021].

Starbucks, 2021c. Starbucks SA. Instagram. [Online]. Available at:

https://www.instagram.com/starbucks_sa/?hl=en [Accessed: 29 June 2021].

Additional context for the elected marketing strategy:

User-generated Content (UGC)

User-generated content (UGC) refers to the creation of any content online by

people instead of brands. This content can take the form of videos, images,
information, and reviews. The main purpose of UGC is to get your target audience
to create and share this content, on behalf of your brand, to increase exposure
and boost brand credibility. Benefits of UGC include authenticity, audience trust
and influence on consumer-buying behaviour via reference groups.

To implement an effective UGC strategy, a brand should be clear on the kind of

content they wish to see, offer the audience “value in return” and use the content
for marketing communications, as well as research.
Adapted from: Newberry, C. 2019. A Marketer’s Guide to Using User-Generated Content on Social
Media. Hootsuite. [Online]. Available at: https://blog.hootsuite.com/user-generated-content-ugc/
[Accessed: 29 June 2021].

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Required:

You have been assigned the role of assistant to the marketing manager for
Starbucks South Africa.

The marketing campaign concept comes from two sources of inspiration:

• Starbucks is famous for writing their consumers’ names on their coffee

cups. Customers love to take selfies and share their unique coffee
experiences online.
• Coca-Cola has benefited from their ‘name on the can/bottle strategy’
globally for years. To localise this campaign for Starbucks, Coca-Cola’s
concept was adapted to enhance the South African at-home coffee
experience.

You are required to address the following marketing problem:

How can Starbucks South Africa use UGC marketing on Instagram to increase
consumption of Starbucks products in South African homes, thereby establishing
Starbucks as a habit among South African consumers?

Your marketing plan will be presented to the manager, in the format outlined in
the brief (i.e., the questions) that is provided on the next page.

Tip for student: please note that your plan must be motivated by secondary
research that support your ideas.

Question 1 (19 marks)

Evaluating consumer segments

Starbucks South Africa’s current strategic focus is on premium coffee consumed

at home. For broad context, the different segments already evaluated by the
marketing manager are as follows:

• Existing Starbucks customers who used to enjoy the in-store experience

and would like a similar experience in the safety of their homes.
• Prospective customers who habitually buy the more established at-home
brands out of loyalty, for example: Jacobs, Douwe Egberts or Nescafé.

Conduct secondary research on the Starbucks at-home customer, and complete

the following target market segment tables:

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1.1 Use the following table format to define and motivate the two (2)
specified target market segments’ characteristics, from a psychographic
segmentation perspective:

Starbucks: Psychographic characteristics

No Characteristics Target market Target market Mark
segment 1: Existing segment 2: Potential allocation
Starbucks customers customers who
who miss the in-store currently use the at-
experience and could home competitors’
make it at-home products out of
habit/loyalty
1 Maslow’s
hierarchy need
that motivates 2
purchase
decisions
2 Lifestyle 2
3 Personality 2
4 Values 2
Total /8

1.2 Use the following table format to define and motivate the two (2)
specified target market segments’ characteristics, from a behaviouristic
segmentation perspective:

Starbucks: Behaviouristic characteristics

No Characteristics Target market Target market segment Mark
segment 1: Existing 2: Potential customers allocation
Starbucks customers who currently use the
who miss the in-store at-home competitors’
experience and could products out of
make it at-home habit/loyalty
1 Buyer readiness 2
2 Purchase
2
occasion
3 Loyalty status 2
4 Benefits sought 2
Total /8

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1.3 Based on the tables above, describe and motivate a typical South African
consumer, who could participate in a Starbucks at-home UGC campaign.
(2)

1.4 Due to COVID-19 regulations, and the at-home coffee movement,

Starbucks decided to use a user-generated content strategy to execute
the campaign. Explain how you expect the consumer (identified in 1.3)
to get involved and engage with the brand during a UGC campaign.
(1)
Question 2 (6 marks)

Assessing external environmental factors

NB: This question relates to Target market segment 1: “Existing Starbucks

customers who miss the in-store experience and could make it at-home” only.

Required:

2.1 Explain how each external environmental factor listed below could impact
on a customer’s purchase behaviour when exposed to the Starbucks
retail promotion that will kick-start the UGC campaign online:
2.1.1 Economic (2)
2.1.2 Technological. (2)

2.2 Consider the external consumer decision-making factor ‘reference

groups’.

How can reference groups be used to influence consumer purchases for

a #starbucksathomeSA UGC campaign?

In your answer, remember the objective is to increase consumption of

Starbucks products in South African homes, thereby encouraging
Starbucks as a habit among South African consumers. (2)

Hint for student: take into account your typical South African consumer from
Question 1.3, and how UGC will play a vital role to encourage increased
consumption and foster the habit of consuming Starbucks at-home.

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Question 3 (25 marks)

Marketing objectives and marketing mix strategies

Consider your answers in Question 1 and 2, before answering the next question.

From the case study, it is clear that Starbucks strategically has two objectives in
mind:

1) Harness the at-home coffee movement to increase consumption of

Starbucks products in South African homes.
2) Leverage the at-home movement to encourage Starbucks as a habit
among South African consumers.

To achieve the above-mentioned objectives, Starbucks South Africa will

participate in a localised campaign to highlight the use of their at-home product
offering.

You plan to centre the UGC campaign on the retail promotion of the limited
edition at-home product and chalk mug to achieve the overall dual objectives:
increase consumption of Starbucks products and create a habit among South
African consumers.

Remember that you are aiming to get customers to participate on social media
after they have purchased their limited-edition promotional pack.

The promotion will start at retail level: customers can purchase an at-home
Starbucks product with a limited-edition promotional mug that has a chalk-paint
finish and a stick of chalk.

The UGC campaign will then require customers who have purchased this
promotion to do the following:

• Prepare their favourite Starbucks at-home coffee drink in the chalk-finish

promotional mug.
• Write their uniquely South African name, or a phrase, in chalk on the mug.
• Take a selfie to show how they “do” the Starbucks experience at-home.
• Post the selfie on Instagram, tagging @starbucks_sa and including the
hashtag #starbucksathomeSA within their post caption.
• The content chosen by the Starbucks SA marketing team will appear on
the official Starbucks SA Instagram story feed over the course of one
month.

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• All users whose content is shared will be gifted a digital at-home product
discount voucher.
• At the end of the campaign period, one user whose content was shared
will be randomly selected and gifted a Nespresso machine. This user will
have the opportunity to attend an exclusive virtual coffee experience with
international Starbucks baristas and learn how to “up” the at-home coffee
skills.

Required:

3.1 Propose two (2) alternative UGC-based ideas that can be used by
Starbucks to achieve the above-mentioned objectives. (4)

Tip for student: ensure that your proposed ideas align with the established
objectives and that they are novel; i.e., not the same as the established idea
mentioned above.

3.2 Conduct an extended marketing mix 7P’s analysis that details the
stipulated UGC campaign idea (below the case study) and integration of
its implementation. (21)

Tip for student: consider the ways in which your audience would post on their
social media account(s). Also brainstorm and research other previous similar
campaigns.

Question 4 (15 marks)

Marketing material portfolio

To present your marketing plan, you need visual evidence of how you would like
the target segment customers to post UGC on their social media page(s); i.e.,
how they would market the at-home Starbucks experience. You therefore need
to design a mock-up of a social media post that could, in theory, be posted on
Instagram by a customer.

NB: remember to reference any sourced visuals.

Refer to the table on the next page for the mark allocation on the promotional
details above:

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 Starbucks UGC marketing mock-up customer social media post design
Mark
No Details/elements needed
allocation
Starbucks UGC campaign promotion post image
Relevant logo and imagery are used to show a customer
1 2
posing with their at-home Starbucks experience and unique
SA name or phrase on the limited-edition mug.
Caption
2 There is a caption, written from the customer’s perspective, 2
briefly stating how they “do” Starbucks at-home.
Hashtag
3 The specified hashtag that will track the UGC campaign is 1
written in the caption of the post.
Social media account handle
4 The specified Starbucks South Africa handle has been tagged 1
in the caption of the post.
Unique name or phrase on the limited-edition mug
5 A clearly localised South African name or phrase has been 2
presented on the limited-edition mug.
Premium at-home experience
6 The staging of the post communicates a quality at-home 2
experience, similar to when you go to a Starbucks store.
Target market appeal
Suitability to attract more users who form part of target
7 1
market segment 1 “existing Starbucks customers who miss
the in-store experience and could make it at-home”.
Innovation in design
8 Creativity is expressed in executing the post from at-home 2
and aligning to the Starbucks brand.
Clear message
Not cluttered with unnecessary information or images. The
9 1
customer is showing off their at-home Starbucks coffee
experience while using their limited-edition mug.
Professionalism
High-quality standard, for use in the real working world; i.e.,
10 1
Starbucks could realistically share this post in their Instagram
stories.
Total 15

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Question 5 (5 marks)

Referencing and technical care

The quality of your referencing, according to the Milpark Reference Guide , as well
as spelling, grammar and professional document layout, will be evaluated
according to the assessment criteria in the following marking rubric:

Cr i terion 0 m ar ks 2 m ar ks 3 m ar ks 4 m ar ks 5 m ar ks
Referencing Sources have Sources have Most Only some The All sources
and been not been sources sources majority of have been
technical correctly referenced/ have not have not sources referenced
car e referenced referenced been been have been in detail
(according to correctly, referenced referenced referenced according
the Milpark and the correctly correctly correctly to the
Reference spelling, according according according Milpark
Guide), and grammar to the to the to the Reference
the spelling, and Milpark Milpark Milpark Guide, and
grammar and professional Reference Reference Reference all of the
document compilation Guide, and Guide, and Guide, and spelling,
layout are of the only a most of the the grammar
professionally document small spelling, spelling, and
compiled. are not portion of grammar grammar profession-
appropriate the and and al
for real spelling, profession- profession- compilation
workplace grammar al al of the
use. and compilation compilation document
professional of the of the is highly
compilation document document appropriate
of the is are for real
document appropriate appropriate workplace
is for real for real use.
appropriate workplace workplace
for real use. use.
workplace
use.
/5

TOTAL MARKS: 70

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