An Analysis of Luckin Coffee's New Marketing Model from the Perspective of Behavioral Finance

Abstract

With the development of Internet technology, Luckin Coffee has transformed the traditional value creation model, driven by customer value as the goal, and established its brand effect in a short period of time through financing. However, the excessive and rapid expansion led to financial crisis, which caused it to fall into the negative vortex of financial fraud, and finally returned to the consumer market at the cost of delisting and restructuring in the United States. After returning to the market, Luckin Coffee changed its business operation model, and the reform of the new marketing model focusing on products and customers made its financial turnaround and rebuilt its brand value. How does Luckin Coffee take advantage of consumers' psychology and guide their consumption preferences? Based on the perspective of behavioral finance, this paper analyzes how the operation management team of Luckin Coffee reconstructs its marketing methods and paths by utilizing the anchoring effect of consumers, limited attention transactions and herd effect. The research conclusion shows that the new marketing model with consumer demand caused by consumer psychology as the core can effectively and rapidly increase the number of new customers and improve customer retention. Luckin Coffee has also quickly passed the crisis after delisting and restructuring, and its business performance and corporate value have also gradually increased. The brand value has returned to the vision of consumers, and the future is promising.