Unit II Research Project (Starbucks) Angelo R. Jones BBA 3201-Priciples of Marketing Columbia Southern University Target Market for Starbucks Starbucks, a coffee bean sales company did not have much of a marketing plan in place at its inception. Based in Seattle Washington the company began to sell coffee beans to espresso bars and upscale restaurants back in 1982. It took 11 years to progress to that level of production, they originally were a local store vendor at Pike Place Market. The director of marketing brought back the espresso bar idea from his travels in Milan. (Company Profile, 2015) The Pacific Northwest was filled with working class men and women that were drawn to the coffeehouse tradition brought in from Italy. …show more content…
Starbucks primary business is that of selling high premium coffee. They have been able to cater a specific product to a specific demographic. Specialization allows for the Starbucks company to deliver great quality and continue to maintain their customer base. Although there is a great amount of coffee flavors the coffee bean is still the constant ingredient in the great tasting coffee. Involving technology with their market structure. Starbucks provide their dine-in customers with unlimited Wi-Fi connectivity. Customers feel comfortable in their environment and perhaps stick around a bit more to enjoy other comfort items and merchandize offered by the store. Starbucks Company have entered into business with technology gurus like Yahoo, Google and Apple. These three technological companies serve as a media outlet for the Starbucks brand. Apple has incorporated an application in their software where consumers may purchase coffee orders from their phones and pick up the product at the closest retail Starbucks store. Weakness …show more content…
The improvements to coffee brewers and the innovation of Keurig has allowed for Starbucks to repackage their products and distribute it as a home product. Many of the flavors consumers could only get from the Starbucks espresso machine in the store can now be duplicated in the home. The opportunity for continued expansion is present. Coffee is quickly being consumed in almost every country in the world, Starbucks has a legitimate opportunity to influence those countries without the Starbucks brand to open their doors. Threats – Foreign policy with foreign nations that host the Starbucks brand. Import and export tax is an expenditure that may and can become costly and profits can be lost. Other companies like McDonalds, Dunkin Donuts, and the Coffee Beanery provide consumers with an ambient environment and some specialty coffee flavors. Proximity may be the only thing required for the consumer to select the services of the rival coffee dispensing businesses. These are but a few of the many strengths, weakness, opportunities and threats that the Starbucks company may face. This is why a marketing team along with data and analytics is essential to comprising a new product. It requires research, innovation, hard work, and a little luck, the Starbucks Brand is more than just coffee. It’s a simple yet detailed product tailored to meet the consumers need at home, at work, and in between. (Starbucks Corporation,
Starbucks has become a global coffee brand. Its position in the market has revolutionized the way people perceive and consume their coffee. It is estimated that Starbucks has over 87,000 different combinations of coffee, which offers the widest range of coffee brands in the world.
Great quality products, customized, served in clean, convenient placed stores for everyday coffee, friendly and fast serving, everything in a pleasant atmosphere - these were just few factors that lead to the great success of Starbucks during the nineties. Their USP was a place where every American could escape from home or work, for a coffee drinking ritual; high quality coffee, according to each customer's taste, served in a special, intimate ambience. Their image was supposed to appeal to anyone, being based on the idea of community, "exploiting" the need of people to interact with each other, in a "third place", away from home or work.
Founded in 1971 at Seattle’s Pike Place Market, Starbucks Coffee, Tea and Spices, as it was originally called, has been “brewing-up” its famous blends in over 43 countries, including the United States. Now called Starbucks Coffee Company, business isn’t just about the coffee and tea anymore. Starbucks has its own line of bottled water, handcrafted beverages, fresh food, entertainment, merchandise and a Starbucks Card. The company has received numerous awards for their outstanding business practices. Fortune Magazine has ranked them as one of “The Best 100 Companies to Work For” in 1998, 2000, 2002, and 2008 (Starbucks, 2008). The Starbucks Experience provides consumers and the general public a direct line a of business communication. From friendly baristas to press releases from CEO Howard Schultz, Starbucks keeps its “partners” informed.
This strategic capitalises on weaknesses since will decrease the cost of coffee beans/beverages but also Starbucks operating cost which they regularly ship across the world to various stores. Starbucks can capitalise on this weakness to improve their brand options. It adds value in the inbound logistics activities, operations and procurements. Starbucks should consider this option since it will decrease their operating cost and therefore will reduce the prices on their menu. The attractiveness is the exact same as mentioned in option 1.
The firm has the first mover advantage on ready to drink coffee beverages. Starbucks was the innovator and was the only offering until recently. Other competitors are beginning to enter the market and will have to provide a reason for the consumer to switch from what they know and enjoy already. This may be the biggest advantage for Starbucks as humans are creatures of habit and tend to stick to what they know and enjoy. Customer loyalty induces the purchaser to stick with the Starbucks brand. Many loyal consumers pick up the RTD coffee at the grocery store in the multi-pack offering. They then keep this purchase in their fridge for when they are running late to work and don’t have time to stop by a store. They can still have their coffee fix without stopping on the way or waiting for the coffee to brew at their home. Lastly, Starbucks has variety of ready to drink options compared to its competitors. The Starbucks website lists fifty five options to choose from. This wide selection has something for all consumers. While all options may not be available at grocery stores there is likely to be a more numerous selection than other brands which will draw in the consumer to find a beverage
There are plenty of options for consumers and allows them to pick whatever they want to drink. With coffee shops all over the world and almost every corner, in addition to growing number of Starbucks stores, it may not be as special to consumers as it once was. Buyers have the power to choice between low cost or high quality, which forces companies to choose a strong and consistent strategy.
Starbucks is one of the most recognizable and successful coffee brands in the world. Starbucks believes in serving the best coffee possible. Starbucks’ international market that was expanded into China in 2002, still has only a tiny part of the Chinese beverage market (Harrison et al., 2005). The company President, Charles Shultz is ascertaining the possibility of establishing new coffee houses in China.
As mention earlier Starbucks has many opportunities of which it can take advantage. These include a joint venture with McDonald’s, where the restaurant giant would supply its customers with Starbucks coffee. Another is the bottled Frappuccino product that Pepsi and Starbucks have created. This has had a very positive response in the test markets and posses to be a lucrative option. Starbucks could also look at the vertical integration possibility of producing its own beans. This could prove to be very successful if they can capture a significant amount of the production they could become a price setter in the coffee commodities. Also because small coffee retail outlets are so trendy it is possible for them to set ...
Starbucks is mostly commonly found stores to get coffee. Starbucks has a market share of 62 percent in the coffee industry (Chart. 1) and has the best loyalty from its customers over other major brands like McDonalds or Dunkin’ Donuts. (Table. 1)
Since 1971, when the coffee industry had started to grow and the range of products and rivalry from other businesses were small; Starbucks was only then competing with brands that hadn’t really made much money over a few years, and Starbucks was topping them all with the amount of profit and revenue the business was gaining however due to the industry growing as days go on, Starbucks now has significant competitors that have stores all over the world that is affecting their exposure and how they sell their products indefinitely. One of these significant competitors is McDonald's, with over 36,899 restaurants, employing 375,000 people and serving 68 million customers a day.(En.wikipedia.org, 2016) They once originated
The ad never mentions the price of the products, the place where Starbucks stores are usually located or the promotions to attract consumers. The existence of competition pushs marketers to make changes and be more creative (Jobber, 2013, p742). It is necessary for a business to survive with competitive advantage (Dibb& Simkin& Pride& Ferrell, 2012, p57). Michael Porter (quoted in Kotler& Wong& Saunders& Armstrong, 2005, p504) came up with three competitive strategies. Maybe Starbucks just applies two of the three strategies. One of the competitive strategies that Starbucks coffee applies is differentiation. Differentiation is the approach that the business uses to make its own products or services attractive, distinctive and different from its rivals (Dibb& Simkin& Pride& Ferrell, 2012, p57). Starbucks is a very creative company, because as the advertisement shows, an artisan roast is roasting coffee beans very carefully. The speaker says consumers’ favourite beverage signature espresso roast is developed uniquely by Starbucks. In fact Starbucks also creatively develops some other popular coffee like Frappuccino and Cappuccino. The other competitive strategy is focus. Focus means that a business targets at a certain group of market segments instead of facing the whole market (Kotler& Wong& Saunders& Armstrong, 2005,
Starbucks should consider increasing presence in the international segment in order to grow as much as possible in that market. Recently, the company has allowed for the franchising of Seattle’s Best Coffee overseas and by catering more to this type of market they can continue to grow internationally. Because Starbucks focuses on employees, the company should allow management teams the liberty to modify store format, present local product mix and price points to the needs, lifestyles and tastes of each individual market/community.
The Starbucks Story Our story started in 1971. In those days we were a roaster and retailer of entire bean and ground espresso, tea and flavours with a solitary store in Seattle's Pike Place Market. Today, we are favoured to welcome a large number of clients through our entryways consistently, in more than 17,000 areas in more than 50 nations.
One could argue that this could be imitated by competitors but it also is very costly. Another strategy is their strategic alliances and acquisitions such as Teavana (Tea), Bay Breads, Evolution Fresh, and many more. Their acquisition strategy has known to be very horizontal. This gives Starbucks the ability to effectively leverage their cornerstone product differentiation strategies by offering a premium product mix of the highest quality beverages and snacks. Starbucks’ goal is to provide each and every customer with a unique “Starbucks Experience” excellent customer service, and well maintained stores which in turn translates to a high degree of customer loyalty. Its HRM value-based approach is for building strong internal and external relationships with suppliers which helps its deployment to international markets, horizontal integration, and organic expansion across the world. Starbucks is known for its high knowledge employees. Human capital is the main asset for most companies and they are provided with great benefits, stock options, retirement accounts, and competitive pay. Good human capital translates into great customer service. I talked to my friends about working at Starbucks and they both said it
As we know, Starbucks has made a name for itself making and selling coffee and specialty coffee drinks. It has made its biggest impression by becoming the espresso expert and public educator of how to make the perfect espresso; "Roasters" of the company are trained for one year.