First of all, is understanding the marketplace of selling coffee and the customer needs and wants. The needs and wants in this case is for a good quality coffee also, trying to know estimated amount that the consumers are willing to purchases which is the demand. By market research, Starbucks can identify the customer expectation for the product which a good value for the products w suitable prices also, customer satisfaction us very important to be taken into consideration because if the customers are satisfied they will continue to come again a buy Starbucks products and by time they will develop brand loyalty which is a good relationship between the customer and the business.
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Design a customer driven marketing strategy:
Customer driven market is choosing carefully the targeted segment that will make the company profitable and building a good relationship with them. First Starbucks need to identify the customer that they want to serve profitably by dividing the consumer in segments then select the suitable segments. Then, choosing a value proposition which is a set of values a company supposed to provide its customer to satisfy their needs.in this case they are the highest quality of coffee: “it has always been, and will always be, about the quality”. Starbucks is passionate about collecting the finest coffee beans and roasting them with excellent care. (“Starbucks,” 2012). Moreover, Atmosphere: Starbucks’s shops are designed to prove customer with comfort, enjoyment and social interaction. It’s a good and quiet place where students can study as it’s equipped with Wi-Fi connection with comfortable seats and lighting.
After that, the company should decide on which marketing orientation that is best to use to satisfy customers and the company. There are five concept which are product, selling, marketing and social marketing concepts. In this case Starbucks is leaning towards to the market orientation as knowing the needs and wants of the customers which in this case is good quality and taste of coffee also, high service standards. They need to be updated to the customer’s changing tastes but in the same time to add their own flavor to attract customers. They need to think global but act local which means making market research to know customers’ culture and tastes to know exactly what they would prefer to buy. For example, in Asian countries Starbucks recently added to their drinks a green tea flavor as its part of their culture. Al though in Christmas time, Starbucks changes the cups to Christmas decoration to engage in the atmosphere and Christmas spirit thus grabbing customers attention. (Janice, 2012)
Prepare an integrated marketing plan and program:
Integrated marketing plan means developing a marketing mix of the product to satisfy and meet customer needs. The marketing mix consists of product, price, place, and promotion. They will be discussed below in the marketing strategy.
Building a customer relationship:
This includes customer relationship management which mainly concern with building and maintaining profitable relation with customer by delivering customer value and satisfaction in their products so that they continue come back and by time creating a brand loyalty. Also, to help in spreading the good reputation.
Capturing value form customers:
In return of satisfying customers the company get loyalty from its customers towards their brand leading to increase in sales, thus increase in market share leading as overall increase in profit.
Not only Starbucks will maintain its customers but also, will attract other customer from its competitors and attaining them. Last is customer equity which means the combined customer lifetime values in the current and potential’s customer. The grater the loyalty of the customers the higher the company’s equity which is a good measure of company’s performance.
Corporate Strategic planning:
Starbucks mission statement: “Our mission to inspire and nurture the human spirit – one person, one cup, and one neighbourhood at a time” (“Starbucks,” 2012)
Their six principals are:
To support great work environment and treat each other with dignity and respect.
Embrace diversity as an essential component in the way we do business.
Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.
Develop enthusiastically satisfied customers all of the time.
Contribute positively to our communities and our environment.
Recognize that profitability is essential to our future success. (“The way we do business,” 2003)
This six principles helps us to measure whether their decisions making is appropriate or not.
Vision statement: is concerned of where the company in the past, present and future. Starbuck vision stamen is “To establish Starbucks as the most recognized and respected brand in the world and become a national company with values and guiding principles that employee could be proud of” (“Starbucks case study,” 2010)
Objectives: is a details of the mission statement that is translated to levels of management to act upon it. Each department should have its own objectives and to be responsible for achieving them. This objective must be SMART which are specific, measurable, achievable, realistic, and time specific. In this case Starbucks where are going to talk about Starbucks marketing objectives which are mentioned below in section B.
Business portfolio: is a way of evaluating the business products in the company by the management.
Boston consulting matrix: is the analysis of the business products in terms of the market growth and market share which enables the organization to formulate strategies. BCG consists of 4 division which are the question mark star, cash cow and the dog.
Market Growth
low
High
Low
High
Market share
Product/Market expansion grid:
This model shows the degree of risk in 4 stages of growth strategies which are market penetration, market development, product development, and diversification.
Market
New
Exciting
Existing
New
Products
Marketing Strategy and the marketing mix:
Customer driven strategy which dividing the market into segments then choosing the right and profitable segment to target.
First market segmentation which can be divided by, Geographic, Demographic, psychographic and behavioral. In this case Starbucks divided their segment according to the area in different countries which is geographic and age, income, gender that are demographic. Then Starbucks selected carefully their target segment which are:
Adults is Starbucks primary targeted market. It consists men and women aged between 25 and 40 which account for almost half of Starbuck’s sales 49%. They attract this type of customer by maintaining a contemporary design of their shops and providing excellent high quality service.
Young adults aged from 18 to 24 which contributes of 40% of company’s sales. Starbucks locate some of their shops in universities and colleges where students can study and hang out with each other. Starbucks introduces Wi-Fi where student can have access to the internet to go on social networking sites or even study.
Teens and kids are aged between 13 and 17 are also, part of the targeted segment which account of just 2% of the total sales. Starbucks offers sugary, decaffeinated and whipped cream drinks that attract parent to buy for their kids. While it’s a cool place for teens to hang out with friends or even to study.
Last, is the market positioning which means the value of the product in the customers’ eyes.
Preparing an integrated marketing plan:
Marketing Mix: (“It,” 2012)
Product: Starbucks product mix expands to over than 30 varieties of coffee such as cappuccino and espresso. Moreover, they provide hot and cold beverage, food like sandwiches, salads and desserts. Also, they sell coffee beans, mug, bottles and CD with their brand name on them.
Price: their pricing strategy is based on the quality of their services and products. They charge high prices due to purchasing high expensive beans. The average price of coffee in Egypt is between 15 to 30 pounds, it is according to the kind of coffee and its size.
Place: according to their mission statement they want to open in every neighborhood. They have aver 16,000 stores in more than 60 countries and they are planning to continue opening more stores in different areas.
Promotion: Starbucks spend little amount on advertising as they depend on developing close customer relationship. Involving in the community by being social responsible and ethical this promote for their wellbeing.
Section B
Starbucks mission statement “Our mission to inspire and nurture the human spirit – one person, one cup, and one neighbourhood at a time” (“Starbucks,” 2012)
Vision Statement: “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow.” (“Starbucks,” 2012)
Objectives and goals:
To create for customer a Starbucks experience that encourage customers to come to take their coffee while having a enjoying their time staying for the environment and return back for enjoyment.
To create and develop an image separate from smaller coffee shops.
To clearly communicate the values of Starbucks to their customer, rather than just growth plans for promotion. (Twell, 2006)
Firms orientation used: The marketing concept as Starbucks is being customer orientated by keeping updated with the customers’ taste and their changing wants. For more details look in section A.
SWOT analysis:
Strengths:
Starbucks is well established and known brand among the coffee shops.
Customer loyalty due to its well recognizable brand and their products consistency.
Being environmental friendly, Starbucks is concerned with saving energy and recycling their products.
Having high market share. .
Having strop financial bases.
Innovation and creative
Operated in more than 50 countries.
High quality of product and service.
Weakness:
Prices are continuously rising which mean high prices compared with competitors.
High percentage of their shops are in the US they need to open in more different countries to spread the risk of failure.
Problem in some of their international operations.
Not available to all targeted segments due to high prices.
Not enough drive-thru service
Opportunities:
Entering new markets in different countries.
Targeting new segments
More promotion and discounts can be offered
Opportunities for increase of revenue in global markets
Threats:
Relies on importing their beans from other countries
Cultural difference, beliefs and value needed to be taken in consideration.
Law and regulation of international countries that might restrain the company decision.
Very competitive market.
Recession in the economy affects the consumers spending.
(Starbucks Corporation, 2012)
Starbucks’s competitive advantage:
1-Constantly looking for new ideas, products as well as new experience for the customers.
2-Locating in many countries but still maintaining the same good environment.
Starbucks ethical and social responsibility:
Community: by creating jobs when opening new stores
Environment: concerning recycling, saving energy and water, Also, going green.
Ethical sourcing: by getting coffee with high quality to meet Starbucks’ standards and providing loans for the farmers. (Starbucks Corporation, 2011)
PESTLE analysis:
Political:
Political stability in each country that has been invested in.
Industrial law and regulation concerning each country.
Globalization has eliminated some barriers between countries.
High taxes imposed on farmers who produces coffee beans thus making Starbucks to purchase the coffee in high prices.
Economical:
Currency exchange rates affect Starbucks as they import most of their coffee beans.
The purchasing power of the consumers
The amount of taxation affect the company’s profit.
The economic stability in each country that Starbucks operates in.
Social:
Changes in the lifestyles of the consumers
Changing in the patterns in the families
Changing the working pattern of the workforce more flexible saving money.
The level education affect the buying power.
Technological:
Innovation and advancing in technology.
Advances in the IT and IS
Biotechnology and agricultural development.
Environmental:
Environmental law such as recycling and saving energy.
Global warming affecting the production of coffee beans.
Legislative:
Introducing tougher rules and regulation regarding trade.
Law and policies by health authorities regarding the consumption and production of caffeine products.
Laws regarding licensing of Starbucks in other countries.
Growth rate of market: 7% in 2012 (Schultz, 2012)
Consumption rate and market actual sales: $13.3 Billion in 2012 (Schultz, 2012)
Ways of improving customer relationship management:
Lowering their prices by purchasing good quality of coffee beans.
Competitors in the same industry:
Dunkin Dounts
McDonald’s
Tim Hortons
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