How Discounts, Product Innovation, and Customer Ethnocentrism Affect Customers’ Coffee Purchase Decisions in China (To Take Starbucks and Luckin Coffee as examples)

Abstract

This thesis is going to investigate how discounts, product innovation, and customer ethnocentrism affect customers’ decisions to purchase coffee in China by using Starbucks and Luckin Coffee as examples. Also, it tries to check whether these two companies have used suitable strategies by comparing their present strategies with corresponding results. In specific, this thesis sets some hypothesis and designs a questionnaire based on previous studies. After these, the questionnaires have been distributed online to collect the first-hand data. Then, the SPSS analysis has been used to yield results. According to the results, this thesis gains the following main findings. First, both discounts and product innovation have significant impacts on customers purchase decisions, either for Starbucks or Luckin Coffee. Also, these consequences are consistent with part of hypothesis. Moreover, customer ethnocentrism has different impact on Starbucks and Luckin Coffee. In other words, customer ethnocentrism has a significant impact on customers’ purchase decisions in Luckin Coffee, but it almost has no impact on that of Starbucks. Thus, the results of this thesis suggest that there is some room for improvement in Starbucks' strategy, while Luckin Coffee's strategy is sufficiently appropriate. Finally, some concrete improved suggestions are listed in the end of this thesis.