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Published by:
IBS Center for Management Research (2014)
Length:
8 pages
Data source:
Published sources

Abstract

US-based Starbucks Coffee Company, the largest coffee chain in the world, generated 4 billion single-serve cups as waste each year that ended up in landfills or as litter. Recycling also posed some serious problems as the existing ecosystem was not 'designed to take the individual Starbucks cups' due to the presence of a plastic coating inside the cup. The company took various initiatives to curb the waste including offering a long-standing discount of 10 cents to any customer who brought along a reusable cup but with little success. In 2013, Starbucks introduced a US$1 reusable cup in its stores. The questions before the company were: How could more customers be encouraged to use reusable mugs? Was the 10 cent discount incentive enough to drive behaviour change of its customers? How could the customers be motivated to take responsibility for their actions and do their part in solving the cup problem? This case is meant for MBA students as part of a managerial economics/ behavioural economics course. The case can be also used in a consumer behaviour course in marketing.

Topics

Behavioral economics; Pricing strategies; Managerial economics; Consumer behavior; Rational behavior; Consumer choice; Consumer preference; Budget constraint; Utility maximisation; Expected utility theory; Prospect theory

Setting

The events covered by this item took place in 2009-2014.

Geographical setting

Region:
World/global
Countries:
United States; United Kingdom; Canada

Featured company

Company name:
Starbucks
Employees:
10000+
Turnover:
USD 13.29 Billion
Industry:
Beverages; specialty retail

Featured protagonist

  • Jim Hanna (male), Director of environmental affairs

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