Marketing Concepts at the Starbucks Company

EXECUTIVE SUMMARY

It has been argued by some people that they think marketing contributes to evils appearing in the world caused by the criticism referring to the effects caused by advertising. None of the critics are true because marketing is about finding the best strategy for gathering information about how consumers behave in the market providing those products that could satisfy their needs and wants when they are needed at that particular time such goods should be of good quality. This report will give a clear understanding of what marketing is all about its elements, benefits and costs of a marketing approach in today’s business. The Micro and Macro environment concept the factors that influence marketing decisions. Segmentation criteria used for product in different markets. Factors influencing the choice of targeting strategy and the concept of buyer behaviour affecting marketing activities. How product development helps to sustain competitive advantage also process of how distribution can be arranged to provide customer convenience.

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DEFINITION OF MARKETING

Introduction

Researchers’ such as Chartered Institute of marketing came out with the conclusion that marketing in United Kingdom has changed rapidly in the last 30 years which is due to the advanced technology. Customers are the centre heart of the marketing, where by marketing is not only about selling the products, organisations need to have a clear picture of marketing concept and the importance of it in meeting the organisation objectives. Different authors came out with their own definitions of marketing as follows;

“Marketing is a human activity directed at satisfying human wants and needs” Phillip Kotler, He finalise that marketing involve the process of selling and buying the products or services which is conducted in a professional way such as through advertising, promotions, social networks etc that aims at meeting the customers satisfaction. [1] 

The American Marketing of Association came out also with the definition of marketing saying that is an activity which set institutions that is processed to create a message that could be delivered to the customers also exchanging offerings that have value for customers, clients, partners, and society at large.” The American Marketing of Association [2] . They have viewed that marketing is about going beyond what organisation does encompassing the great extent of activities that marketers undertake making sure their message is about certain product or services reach the customers that is marketing.

P. Kotler and G Armstrong defined marketing as the process were by companies tend to create products of value for customers and building strong customer relationships in order to capture the value from customers in return [3] . “Principles of marketing page 3”. Authors came out with this definition due to that fact that marketing is not only involving on selling and buying it includes social and managerial process too where individuals and organisation as well can obtain their needs and wants through the process of exchanging value with others.

American Marketing Association 1985 came out again with another definition of marketing which they said that is a process of planning by executing the process of pricing, planning and distribution of ideas that goods and services could create exchange that satisfy individual and organisational objectives. They explained that marketing is a process which is performed within the organisation [4] . Marketing strategy and competitive positioning pg 7

CHARACTERISTICS OF A MARKETING ORIENTED ORGANISATION

Kohli and Jaworski (1990) defined marketing orientation as one or more departments engaging in activities directed towards the process of developing an understanding of customers’ such as their buying behaviour which is current and future needs and the factors affecting them, sharing of this understanding across departments and the various departments engaging in activities designed to meet select customer needs. [5] “Marketing strategy and competitive positioning” pg 8

It is argued that “social and economic justification of customer wants and needs while at the same time meeting organisational objectives which is based on understanding that a sale does not depend on aggressive sales force, but rather on a customer decision to purchase a product” [6] Introduction to Marketing 9th Edition pg 8. Characteristics of a marketing oriented organisation are as follows.

Concentrates on the products that meets the customer needs and wants which are different from their competitors.

Integrating the activities conducted within the organisation such as production to satisfy such wants.

Making sure long-term goals are being achieved within the organisation by satisfying customer wants and needs legally and in a response way.

A market oriented organisation need to identify their competitive arena and competitors which by knowing their strength and weakness which is assessing what the competitors are intending to do in the future or tomorrow and what they are doing today that could help the organisation to come out with better strategy to win the market share.

MARKETING CONCEPT

Felton (1959) defined marketing concept as a corporate state of mind that exists on the integration and co-ordination of all the marketing functions which, in turn, are melded with all other corporate functions, for the basic objective of producing long-range profits. It is characterised by achieving organisational goals which depends on identifying he needs and wants of the target markets and making sure desired satisfaction of the customer are delivered in an effective and efficient way than what competitors do. Kotler

ELEMENTS OF MARKETING CONCEPT IN STARBUCKS COMPANY

Starbucks is a leading retail company selling different flavours of coffee, snacks, to its customers. It started in US in 1971 then opened more branches in across all over UK high streets having 650 stores in UK and Ireland in 1998. Starbucks is targeting all kind of group such as young age, middle age also old age. Starbucks as one of the example showing how they have described the elements of marketing concept in their organisation which are customer orientation, organisation integration and mutually profitable exchange.

CUSTOMER ORIENTATION

MARKETING ENVIRONMENT IN STARBUCKS.

An organisation can be structured in the certain ways that implements the goal of the organisation such factors can be interfered externally which is termed as Macro environment and internally known by Micro environment. Environment can change due to certain circumstances where by the organisation such as Starbucks can manage such change by having marketing plans, proper promotion, well distribution manner and proper pricing method in advance in case changes happened.

Macro environment analysis

These are the forces that affect the organisation externally in a very large part such as political, economical, social and technological (PEST)

Political Factor

This is relating to the huge amount of tax imposed to the business by the government which tend to interfere the organisation activities when it wants to maximise its profit. Political factor from other branches in other countries where could be wars, dictatorial government, civil wars that may influence the marketing environment of the organisation. Also laws imposed to the organisation where by the government restricting shops from selling alcohol at certain time, ethics practice child labour, health and safety, fair trade etc which organisations need to practice them.

Economical Factor

Economic factors such as recession which hard a big impact to the different organisations also to the consumer ability to purchase their product due to been unemployed and having debts. As UK joined European Union introduced free movement of goods and services that result to the occurrence of competitions among the organisation. The way income is distributed among the individuals impact the marketing activities such as higher income earners, middle and low earners these are economic factor influence marketing segmentation and decisions.

Social factor

Social factors that influence marketing decisions are such as demographic factors which is relating to the population where when the population increases creates good opportunity for the marketing activities but if it decreases results to great impact in the market. Age, marketers tend to target their market according to the number of age available in an area. Behaviour also may influence the marketing decision where by some ethnics may not be able to purchase certain products due religion aspects also due to consumer’s different in taste, style and fashion some may like the products others may find them not attractive.

Technological factor

This is spread of advance technology which is changing the world in rapid state where now consumers can buy their products online; or decide to but coffee machines and make their own coffee at home organisation can market their products through various social networks such as Facebook, Twitter which are being used by the people regularly such factors does influence marketing decisions when they decide to plan their marketing activities.

PORTER’S FIVE FORCES

Porter’s Five Forces Model can be used by the company to identify its opportunities and threats of their competitors. Starbucks can use such model to be able to enter new reach markets. Starbucks has few competitors such a Cafe Nero, Costa coffee, Coffee republic such find it hard to compete with Starbucks due to that Starbucks have got good opportunity in the volume of operations. Starbucks is the leading coffee retailer in the world having good brand. (Kembell). Threats that Starbucks faces are cities that have small number of population due to having low number of competitors that Starbucks find it hard to compete. Starbucks is well known in the coffee market for its innovation and strong product differentiation. Starbucks has introduced the prepaid debit card; Seattle’s Best launched its version.

STAKEHOLDERS’ ANALYSIS

Stakeholder is any person who has the direct or indirect interest in the company. Examples of stakeholders are customers, suppliers, government, employees, other agencies etc. Stakeholders are of the great importance to any organisation without them the organisation won’t be able be able to survive, their needs need to be met by organisations such operating marketing activities in ethical way, abiding to the laws and regulations regarding to business, protecting the environment from any harm, they can manage to sustain the marketing activities etc If such needs are not fulfilled they have the power to cause destruction in the marketing plan and decisions.