MARKETING

PLAN :
STARBUCKS
CORPORATION
Presented by:

JULIYATI
RUHIYATI IDAYU
NURULHAFIZAH
 Presentation Outline
 About Starbucks
 Overview
 Timeline of Starbucks
 Starbucks Values
 Starbucks Mission Statement
 Starbucks Environmental Mission
Statement
 Starbucks 6 Guiding Principles
 Corporate Social Responsibility
 Malaysia Industry Analysis
 Macro-Environmental
Analysis
 Economics
 Political/Legal
 Demographics
 Social/Cultural
 Technological
 SWOT Analysis
 Competitive Analysis
 Internal Analysis
 Target Market Segment
 Product Life-Cycle & Sales
Trend Analysis
 The Starbuck Model
 Marketing Strategies
 Placement Strategies
 Promotion Campaign Plan
 Conclusion
 Recommendation
ABOUT STARBUCKS
 OVERVIEW
 Established in 1971 at Seattle, Washington
 Famous for its quality fresh-roasted coffee beans
and stylish atmosphere.
 Over 9,000 stores worldwide
 Product lines include :
 beverages (coffee, Tazo tea, soda, juices)
 pastries
 whole coffee beans
 coffee-related hardware and equipment
 merchandise (mug, CDs)
TIMELINE OF
STARBUCKS
 TIMELINE OF
STARBUCKS (cont’d)
 Starbucks
STARBUCKS Values
VALUES

 Passion for Everything We Do

 Integrity
 Entrepreneurial Spirit & Drive
 Pride & Success
 Respect for Our Partner
 STARBUCKS MISSION
STATEMENT

“Establish Starbucks as the

premier purveyor of the finest
coffee in the world while
maintaining our
uncompromising principles
while we grow.”
 STARBUCKS
ENVIRONMENTAL
MISSION STATEMENT

“Starbucks is committed to
a role of environmental
leadership in all facets of
our business.”
 CORPORATE SOCIAL
RESPONSIBILITY
 Focuses its efforts on:-
 Improving social and economics conditions for coffee
farmers
 Minimizing environmental impact;
 Making a positive contribution in the communities where
they do business; and
 Providing a great work environment for their partners
(employees).
 Established the Starbucks Foundation in 1997
 CORPORATE SOCIAL
Corporate Social
Responsibility
RESPONSIBILITY (cont’d)
 A major contributor of CARE, worldwide relief and
development organization (Health, Education, and
Humanitarian aid)
 Provides financial support to community literacy organizations
 Participate in local charitable projects
 2004 EnviroStars Recognized Leader Award – for its community
service and environmental activities
MALAYSIA INDUSTRY
ANALYSIS
 MALAYSIA INDUSTRY
ANALYSIS
The coffeehouse business has grown every year.
Lifestyle factors converge to make the coffee industry
strong at all times.
Coffeehouse provides calm, invigorating ambiance for
people to socialize, relax or catch up on work.
Coffee drinking is now an all-day activity.
Not unusual for a well located coffeehouse to exceed a
daily average of 900 customers.
The business of coffeehouse definitely will continue to
grow intensely.
 FINANCIAL REVIEW 2008

 Starbucks Malaysia, which became a 50% associated

company of the Berjaya Group during the financial year,
registered a 26.2% and 4% increase in revenue and pre-
tax profit respectively as compared to the previous year.

 This is mainly due to the growth of new stores and

growing popularity of the brand and its products.
 FINANCIAL REVIEW 2008
(cont’d)
 Thus led to
 More new customers visiting the stores
 Increased frequency of visits by existing customers as
the company expands its stores to new states and
towns in Malaysia.
 Opening 21 stores
 Bringing the total number of Starbucks Coffee stores
to 109 stores nationwide.
 Consistency in introduction of new and innovative
food and beverage products.
 FINANCIAL REVIEW 2008
(cont’d)
 Complimentary WIFI service offered at all Starbucks
stores nationwide continued to be well received by
customers who used the facility for both business and
leisure.
 The company launched a strategic coffee knowledge
program in all its stores, called “Coffee Seminars”
conducted by certified coffee masters.
 Starbucks is committed to opening more stores as well
as introducing new store designs and programs to cater
to the various needs of its customers.
MACRO-ENVIRONMENTAL
ANALYSIS
MACRO-ENVIRONMENTAL
ANALYSIS
 In a time of inflation when the purchase of non-essential
items is down, Starbucks is feeling the effects.
 600 Starbucks locations will close by mid-year 2009
 12,000 employees will lose their jobs. Offer relocation
packages to many employees, severances to others.
 In response to competition and imitators, Starbucks now
offers the “bottomless” $1.00 coffee.
 Fewer than 200 new US locations will be opened in 2009 in
comparison to 900 new US locations projected to be opened
in 2008.
 Economic growth in countries where Starbucks
operates, such as USA, Pacific Asia and Europe,
stipulates the firm’s growth strategies.
 The Starbucks business depends on economic
factors in developing countries, where it buys the
coffee beans.
 As Starbucks is expanding internationally, trade
restrictions, tariffs, tax policies and employment laws of
related to their business countries have influence upon
Starbucks.
 Starbucks has to take into account very different
political situations in countries from which it buys
coffee and countries the company expands to: from
extensive poverty and deep social inequality (Latin
America) to the fast growing economy of Asia.
 As predicted, by 2010 60% of the world’s population will live in
the Asia Pacific region
 Starbucks had two class action suits pending since 2001: Carr vs.
Starbucks and Sheilds vs. Starbucks
 Possible threats on a change in import laws for its imported
coffee beans could greatly affect numerous areas of production
for the company
 People ages 15-64 make up the largest percentage of the
US population
 Starbucks targets both males and females, mainly 18-30
year olds, but really does cater for everybody's needs
 Starbucks customers are mainly in their final years of high
school, in university or just starting to work.
 All these customers have had a good education
 Principles Towards
Environment
 Understand environmental issues & share information with
partners,
 Develop innovative & flexible solutions to bring about change,
 striving to buy, sell & use environmentally friendly products,
 Recognize that fiscal responsibility is essential to our
environmental future,
 Instill environmental responsibility as a corporate value,
measure & monitor progress for each project, and
 Encourage all partners to share in the mission
Participating and organizing activities such as
neighborhood clean-ups and walk-a-thons
Recycling and reusing of resources
Buying policies
Waste reduction
“Green Team” to install the environmental views
into trainees
 Consumer preferences could shift from coffee to
other beverages
 In line with the launching of Starbucks “Shared Planet”
recently, Starbucks Malaysia has planned to achieve the
following goals by 2010:
 Reaching 5,000 volunteer hours in 2009 across
Malaysia.
 Achieving 2% target of customers using Starbucks
reusable mug over paper or plastic cup in 2009.
 Conducting at least two community activities in support
of local neighbourhood causes per district per year.
 Implementing in-store recycling starting from stores in
the Klang Valley in 2009.
 Organizing the first Starbucks™ Shared Planet™
Store Award Program in 2009.
 Establishing the first Starbucks Social Entrepreneurs
project in 2009.
 Increasing energy conservation by 5% in 2009
 Technologies allow Starbucks to offer the
higher standard quality products
 Introduction of the Starbucks Card
 Most if not all Starbucks location have WI-FI for
consumer needs
 Its computerized roasters allow the company
to create unique computerized curves in
roasting coffee beans.
 Starbucks invests in research to obtain even better quality
of roasting and various blending.
 Starbucks uses the Internet as a distribution mechanism and
implement Internet cafes to attract customers.
 New methods of working such as mobile communication,
intranet gives enables prompt communication .
SWOT ANALYSIS
SWOT ANALYSIS
 STRENGT
HS
 Product diversification
 Established logo, developed brand,
copyrights, trademarks, website and
patents
 Company operated retail stores,
International stores (no franchise)
 High visibility locations to attract
customers
 Valued and motivated employees,
good work environment
 Good relationships with
suppliers
 Industry market leader
 Globalized
 Customer base loyalty
 Product is the last socially
accepted addiction
 Widespread and consistent
 Knowledge based
 Strong financial foundation
 It is a global coffee brand built
upon a reputation for fine
products and services. It has
almost 9000 cafes in almost
40 countries.
 WEAKNE
SSES

 Lack of internal focus (too  Starbucks has a reputation for

much focus on expansion) new product development and
 Ever increasing number of creativity. However, they
competitors in a rowing remain vulnerable to the
market possibility that their
 Cross functional innovation may falter over
management time.
 Product pricing (expensive)  Dependant on a main
competitive advantage, the
retail of coffee. This could
make them slow to diversify
into other sectors should the
need arise.
 OPPORTUN
ITIES

 Expansion into retail operations  Emerging international

 Technological advances markets
 New distribution channels  Continued domestic
(delivery) expansion / domination of
 New products segment
 Distribution agreements  Co-branding with other
 Brand extension manufacturers of food and
drink, and brand franchising
to manufacturers of other
goods and services both have
potential.
 THREATS

 Competition (restaurants,  Consumer trends toward

street carts, supermarkets, more healthy ways and away
other coffee shops, other from caffeine
caffeine based products)  Fragile state of worldwide
 US market saturation production of specialty
 Coffee price volatility in coffees
developing  Alienation of younger,
countries domestic market segments
 Negative publicity from poorly  Cultural and Political issues in
treated farmers in supplying foreign countries
countries  Starbucks are exposed to
rises in the cost of coffee and
dairy products.
COMPETITIVE ANALYSIS
COMPETITIVE ANALYSIS
COMPETITO
RS
 Starbucks faces competition from a number
of international, national, regional, and even
local coffee bars and houses.
 The more well known international ones
would be :
Coffee Bean
San Francisco Coffee
Gloria Jeans
 The local Competitors would be :
Secret Recipe
Oldtown White Coffee
 COMPETITIVE ANALYSIS
COMPETITO
RS
 Starbucks competitors are primarily in the Restaurants
& Cafes industry.
 Starbucks also competes in the Nonalcoholic
Beverages, Candy & Confections, and Consumer
Electronics & Appliances Retail sectors.
 Is comfortable facing Coffee Bean and Tea Leaf as its
major competitor but, with the upcoming and
modernized kopitiams, it is now quite an issue for
Starbucks.
COMPETITIVE ANALYSIS
COMPETITO
RS
 Fortune ranked Starbucks number one in
innovation, quality of management, people
management and quality of products or
services in the food industry 2007.
 According to The Star online, in Malaysia,
Starbucks currently holds 45% to 50% of local
gourmet coffee market.
 Starbucks is still the world and Malaysia
leader in its industry.
 Starbucks is constantly innovating and
showing strong product differentiation in their
industry.
 Is aware of the threats to potential entrants
since the profit is attractiveness.
 COMPETITIVE ANALYSIS
PORTER’S FIVE
FORCES MODEL

 The main technique used to analyse competition

in the industry environment is Porter’s (1980)
 The stronger each force, the more competitive is
the industry and the lower is the rate of return
that can be earned. (Goudaskas, 2002)
 COMPETITIVE ANALYSIS
PORTER’S FIVE FORCES
MODEL (cont’d)

THREATS OF NEW ENTRANTS

BARGAINING POWER OF SUPPLIERS

COMPETITIVE RIVALERY WITHIN THE INDU

THREAT OF SUBSTITUTES
 THREAT OF
ENTRANTS
 Starbucks operates in highly competitive industry
where there are strong brands among competitors
 However, the entry in the retail specialty coffee
market is low as the capital requirement for
purchasing or renting one store is not high.
 New entrants have to compete with respected
brands. Most of these were one-store
establishments with no real plan for growth.
 THREAT OF
ENTRANTS (cont’d)

 Coffee bulk purchasing offers Starbucks

significant economies of scale.
 Outlets, stores, grocery chain, kiosks, Internet,
mail delivery allow Starbucks to have access to
a wide range of distribution services.
 BARGAINING POWER OF
CUSTOMERS
 The force is high, because customers are large and
provide a large proportion of company profits.
 Easy to switch between competitors, as the
competition on brand recognition is very high in the
coffee industry.
 To neutralize the threat of powerful buyers,
Starbucks could reduce buyer uniqueness by
product differentiation, cooperation, diversification,
and forward vertical integration.
 BARGAINING POWER OF
SUPPLIERS
 Supplier power is high for Starbucks.
 there are a few suppliers and increasing volumes of
purchasing by Starbucks leading to difficulties in finding
beans that meet the company’s quality requirements.
 To neutralize the threat, Starbucks could reduce supplier
uniqueness and look into development of second sources.
 To develop second sources, Starbucks should invest in
coffee industry where there are a number of coffee farms
that can be increased.
 THREAT OF
SUBSTITUTES
 This threat can be generated by competition among
non-coffee related products such as teas, and soft
drinks.
 Technological innovations in roasting also give the
opportunity to roast Soya beans.
 The threat is however quite low since there are no
natural substitutes for coffee beans.
 COMPETITIVE RIVALERY WITHIN
THE INDUSTRY
 The competition intensifies as the specialty coffee
market is growing.
 There is little difference between products, which makes
the competition fiercer.
 Starbucks can take an advantage of the recognition of its
brand in countries where it has its name.
 Comprehensive Internet site allows Starbucks to attract
more stakeholders. Gaining the market share by store
clustering, Starbucks depletes its rivals.
INTERNAL ANALYSIS
INTERNAL ANALYSIS
Target Market Segment
 Starbucks positions itself as a specialty premium coffee
retailer, which sells a wide variety of coffees and other
beverages, both hot and cold, together with snacks and
sandwiches.
 However, intense competition in the retail beverage
segment could adversely affect the company’s profit
margins, and the company is currently still strongly
dependent on the US market for the majority of its
revenue and profits.
 As Starbucks is a premium coffee brand, it generally
relies on its target market having a significant number
of middle and high earners with disposable income to
frequent its coffee houses.
Product Life-Cycle & Sales
Trend Analysis
The Starbucks Model
The Green Apron Book
Creating the experience that keeps
people coming back relies on the
magical combination of three things :
Our products, our places and our people.

They come for coffee, stay for the inviting

warmth , and return for the very
human connection
 Attention to Detail
Occurs by Design, Not by
Default
 Creating an Environment for the Starbucks
Experience
 Details converge into a “Felt Sense” about the
business
 Never cut corners on quality
 Prioritizing objectives and keeping them in front of
your people
 Creating a playful corporate culture
 All that and so much more
 Everyone matters-Uniqueness of customers and
employee
The Expectation Effect
 Creating the familiar :
Predictability in product
 Creating predictability in
experience
 Delighting the customers even
when things go wrong
 Macro Resistance
 Never try to beat them ; always join them
 Errant perceptions and taking valid
responsibilities
 Example of challenges ;
We don’t want you here
Beware the naysayers
When customers say No
Resistance inside the store
The View from 30,000
Feet
 Building trust
 Triple shot of Socially responsible business
practices
 Benefits for partners
 C.A.F.E practices
 Partnerships with environmentally conscious
and socially diverse company
 Giving back : Writing checks and igniting service
 Corporate giving
 Community volunteerism
 Future leadership
Marketing Strategies,
Action Plan and
Assessment
Prior Strategies
 Domestic &
International Expansion
 Domestic
 Blanket an area completely, even if the
stores cannibalize one another’s business
 Starbucks-everywhere approach
 Clustering stores increases total revenue
and market share

 International
 Starbucks Coffee International Inc
 Company-owned or company operated store
or licensing
 Partner first, country second
 First 3 years of store opening is
concentrating on building the brand in the
country
Employee system &
Location
 Employee Training and Recognition
 Systems to recruit, hire and train baristas and
store managers
 Screening
 training programs
 awards for partners

 Real Estate, Store Design, Planning, and Construction

 A broad range of store formats (the right image
and character)
 A “stores of the future” project team
 High-traffic, high-visibility store locations
 Control of average store opening costs
 Wi-Fi availability at stores
 Product Line

 Wide range of products choices

 Special product promotion
 Selling music CDs
 Joint ventures
 Acquisitions
 Starbucks Reward Cards
Coffee Purchasing
 Coffee and Farmer Equity (C.A.F.E.)
 The guidelines address coffee quality,
financial transparency, and social and
environmental responsibility.
 All suppliers that become members of CAFÉ
must undergo a third party review to assess
their adherence to the quality and
sustainability guidelines established by CAFÉ.
 CAFÉ members must provide a living wage,
protect workers rights and provide a safe
humane workplace and living environment.
Current Strategies
 A proprietary and revolutionary in-store Clover® brewing
system that delivers the best cup of brewed coffee available
anywhere

A complete reinvention of brewed coffee in-store, that will

be brought to life by baristas across the globe, who will scoop
and grind a new unique coffee blend, connecting customers
to the early days of Starbucks

The introduction of new state-of-the-art espresso system

that provides the perfect shot every time and helps facilitate
the critical connection between barista and customer;

The launch of MyStarbucksIdea.com, Starbucks first online

community, that takes the Starbucks Experience outside the
store and enables customers to play a role in shaping the
company’s future; and
Retail Strategy
Retail Mix
People Strategy
Human Resource
Strategy
Quality Control Training
Strategy
Product Strategies
Product & Brand
Consideration
Leveraging the Brand
Packaging Consideration
Service Policy
Pricing Strategies
 Pricing Objective and
External Environmental
Influences
Impact of the Other 5 Ps
 Customers are willing to pay the premium
price that’s being charge by Starbucks base
on their perception of Starbucks as a high
quality coffee.

 The price is not as important as quality and it

was found that customers understood that
they’re not only paying the price for the
coffee also for them to experience “The
Starbucks Experience”.
 Competitor Price
Analysis
Competitor Beverages Price
San Francisco Coffee Ice-Blended Mocha RM14.50
House
Coffee Beans & Leafs Ice-Blended Mocha RM13.50

Gloria Jeans Coffee Ice-Blended Mocha RM13.50

Old town White Coffee Ice-Blended Mocha RM 6.50

Secret Recipe Ice-Blended Mocha RM 7.50

Criteria for Planned Price
Adjustments
 There are two main pricing strategies available to Starbucks when
entering the market:
 Skimming
 Market Penetration
 Both of these strategies can be combined with promotion and
placement strategies to provide an overall marketing strategy.
 Skimming strategy is usually seen as the best entry strategy,
with the company leveraging its brand and setting a high price
to attract the most affluent customers.
 In contrast, market penetration would involve offering initial
discounts and low prices with the aim of attracting as much
market share as possible. The aim would then be to convert
this market share into repeat and loyal customers, and
gradually remove the promotional and discount prices to
produce a consistently profitable operation
 Potential Competitor
Action/Reaction
 They will start to emulate several Starbucks strategies, including holding a
free coffee day a week after Starbucks held its free coffee giveaway.
 Differentiating strategy by being true to its core as a coffee shop that sells
quality coffee such as never resteaming milk, roasting beans in small
batches, and maintaining a large variety of coffees for customers to choose
from.
 Starbucks has strong competition from other coffee shops, but surprisingly,
the other main competitors rising in the coffee market are prominent fast
food chains. Corporations such as McDonald’s and Burger King have been
around much longer and have a much bigger establishment than Starbucks
does. They already have the infrastructure in place to sell coffee, and these
fast food chains have recently been promoting what they assert is coffee
that’s of similar quality to Starbucks for a cheaper price.
Placement Strategies, Action Plan and
Assessment
Placement Strategies
Company
-operated retail
store

Research & Specialty

Development operations

Placement
Strategies
Patens,
trademark,
copyright
& Licensing
domain
names

Food services
Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 increase its market
share by selectively
Company – operated operating additional
stores in existing
retail store
markets
 operating stores in new
markets to support its
long term strategic
objectives.
Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 Company can vary
Company – operated  Starbucks retail the size and format;
retail store stores are typically
located in high- its stores are located
traffic, high visibility in or near variety
locations. settings.
Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 Company selectivelyAt the end of Fiscal
located stores in2008, the Company
shopping malls. operated approximately
Company – operated 2,800 drives thru
retail store  The company alsolocations, compared to
locates retail storesapproximately 2,300 at
in select rural andthe end of fiscal 2007,
off-highway representing
locations. approximately 35 % and
31%.
Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 To reach customers
where they work,During Fiscal 2008,
travel, shop and dinespecialty revenues
Specialty operations by establishingaccounted for 16% of
relationships withtotal net revenues.
prominent third
parties that share the
company’s values and
commitment to
quality.
 Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 Shares Starbucks
operating and storeDuring fiscal 2008, 438
development Starbuck licensed retail
experience. stores were opened in
Licensing – Retail Employees working inthe United States and,
Stores licensed retailas of September 28,
locations are2008, the Company’s
required to followInternational operating
Starbucks detailedsegments had a total of
store operating3134 licensed retail
procedures andstores.
attend training
classes similar to
those given to
employees in
Company-operated
stores.
 Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 With Kraft Foods, Inc
(“Kraft”), theBy the end of Fiscal
Company sells a2008, the company’s
Licensing – Packages selection of Starbuckcoffee and teas were
coffee and tea and Seattle’s Bestavailable in
Coffee in grocery andapproximately 37,000
warehouse clubgrocery and warehouse
stores club stores
 The Company sells
packages coffee and
tea internationally
both directly to
warehouse club
customers
 Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 The North AmericanCollectively the
Licensing – through Coffee Partnership, arevenues from these
several partnerships joint venture with thebranded product
both Domestically and Pepsi-Cola companyaccounted for 4% of
Internationally. in which Starbuck is aspecialty revenues in
50% equity investor,fiscal 2008.
manufactures and
markets ready-to-
drink beverages.
 Strategies (Rank Action Plans Per Evaluation Method (s)
Order) Strategies

Licensing – through Licensing agreementsCollectively the

several partnerships for the manufacturing,revenues from these
both Domestically and marketing andbranded product
Internationally. distribution of Starbuckaccounted for 4% of
discoveries, a ready-to-specialty revenues in
drink chilled cup coffeefiscal 2008.
beverage, in Japan and
South Korea.
 Strategies (Rank Action Plans Per Evaluation Method (s)
Order) Strategies
 August 2008 with
Licensing – through Unilever and Pepsi-Collectively the
several partnerships Cola Company for therevenues from these
both Domestically and manufacturing, branded product
Internationally. marketing andaccounted for 4% of
distribution ofspecialty revenues in
Starbucks super-fiscal 2008.
premium Tazo Tea
ready-to-drink
beverages in the US
and Canada.
 Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 Another joint venture
Licensing – through with the Pepsi-ColaCollectively the
several partnerships Company, torevenues from these
both Domestically and manufacturer, branded product
Internationally. market andaccounted for 4% of
distribute ready-to-specialty revenues in
drink beveragesfiscal 2008.
internationally which
currently includes
bottled Frappucino
beverages in china
and Mexico.
Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 Sells whole bean and
ground coffees, toThe Company’s total
institutional foodservicefoodservice operations
companies that serviceshad over 19,000 accounts,
business and industry,primarily in the US, at
Foodservice education, healthcare,fiscal year end 2008.
airlines and otherRevenues from
retailers. foodservice accounts
 The majority of thecomprised 25% of total
Company’s directspecialty revenues in
accounts are throughfiscal 2008.
national broad line
distribution networks
with SYSCO Corporation
and US Foodservice.
 Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 The Company ownsThe Company owns
Patents, trademarks, and /or has applied tonumerous copyrights
Copyright and domain register numerousfor items product
Names trademarks andpackaging, promotional
service marks in thematerials, in-store
United States and ingraphics and training
many additionalmaterials, certain
countries throughoutproducts, systems and
the world. design the Company
has registered and
maintains numerous
Internet domain
names,
PLACEMENT STRATEGIES, ACTION
PLANS AND ASSESSMENTS (cont’d)
Strategies (Rank Action Plans Per Evaluation Method
Order) Strategies (s)
 responsible for theThe Company spent
Research technical approximately $7.2
development of Foodmillion, $7.0 million
and
and beverageand $6.5 million during
development products and newfiscal 2008, 2007 and
equipment. 2006, respectively, on
technical research and
development activities.
 PRODUCT PLACEMENT TASKS NEEDED AND
THE ABILITY TO BE PROVIDED BY STARBUCKS
AND/OR BY OTHER ORGANIZATIONS
Level Needed Ability to be provided
Task needed by
High Low Starbuck Others

Marketing YES YES

Activities:
Forecasting and
Market Intelligence

Sales Activity YES YES

Sales force
training and
management
Missionary Sales YES YES
 PRODUCT PLACEMENT TASKS NEEDED AND
THE ABILITY TO BE PROVIDED BY STARBUCKS
AND/OR BY OTHER ORGANIZATIONS

Task needed Level Needed Ability to be

provided by

High Low Starbuck Others

Stock-based Compensation YES YES

Material Handling Systems YES YES
 PRODUCT PLACEMENT TASKS NEEDED AND
THE ABILITY TO BE PROVIDED BY STARBUCKS
AND/OR BY OTHER ORGANIZATIONS
Task needed Level Needed Ability to be
provided by
High Low Starbuck Others

Promotion Activities YES YES

Advertising
Coop ads with retailer YES YES
Sales Promotion YES YES
Public Relation YES YES
(Publicity)
Specialty operations YES YES
Risk Factors YES YES
 PLACE OPTION SELECTION AND
EVALUATION CRITERIA
Criteria
Managerial Assessment Degree of Minimum
Factors Important level of
Reputation with clients for : Acceptance

Management Very Important High

Prices /Negotiating Medium Important Average

Office Operations Very Important High

Retailers Operation Very Important High
Delivery commitments met Very important High
 PLACE OPTION SELECTION AND
EVALUATION CRITERIA
Criteria Degree Minimum
Management Expertise of level of
Indicators: Important Acceptance
Knowledge about end-users

Sales force professionalism: Very Important High

Training and retaining
Knowledge about the product Medium Important Average

Assistance provided to retail Very Important High

customers
Stock outs and back orders Very Important High
 ANALYSIS OF CHANNELS
CURRENTLY BEING USED
Evaluation Criteria Wholesal Retail
e

Management Assistance / Very Committed

Services
Provided to
Cooperative Advertising / Very Committed
promotion
Provided to
Sales force assistance/training Very Committed
Provided by
PROMOTION CAMPAIGN PLAN
FOR STARBUCKS
STARBUCKS PROMOTION
PLAN To provide
convenient
access for both
pedestrians
and drivers
To reach customers
Direct response where
advertising they work,
Promotion travel, shop and dine
Plan

Focus more on Shares Starbucks

the food service. operating and
store development
experience.
 OBJECTIVE TASK COST
To provide convenient  Stores are located inThe company has
access for both or near a varietycontinued to expand
pedestrians and drivers settings, includingdevelopment of drive-
downtown andthru retail stores.
suburban retail
centers, office
buildings and
university campuses.
 It also locates retail
stores in shopping
malls, and in select
rural and off-highway
locations.
 OBJECTIVE TASK COST
 Establishing
To reach customers relationships During fiscal 2008,
where they work, including licensingspecialty revenues
travel, shop and dine arrangements, foodaccounted for 16% of
service accounts andtotal net revenues.
other initiatives
related to the
company core
business.
 OBJECTIVE TASK COST
 Employees working in
licensed retailAt the fiscal year end
locations are2008, Starbucks total
Shares Starbucks
required to followlicensed retail in stores
operating and store
Starbucks detail storethat operated similar
development
operating procedureslike the Company-
experience.
and attend trainingoperated stores in
classes similar toMalaysia was 113.
those given to
employees in
company-operated
stores.
 OBJECTIVE TASK COST
 Sells the product to
Focus more on the food the institutionalThe company’s total
service. The company foodservice services operations had
sells whole bean and companies thatover 19,000 accounts.
ground coffees, service business and
industry, education,
healthcare, office
coffee distributors,
hotels, restaurants,
airlines and other
retailers.
 OBJECTIVE TASK COST
Total advertising expenses,
Direct response Consists primarily ofrecorded in “store operating
advertising customer acquisitionexpenses”, “other operating
expenses includingexpenses” and “general and
applications foradministrative expenses” on
customers to applythe consolidated statements of
for the Starbucksearning, totaled $129.0 million,
Card Duetto Visa. $103.5 million and $107.5 million
in fiscal 2008, 2007 and 2006,
respectively, as of September 28,
2008 and September 30, 2007 ,
$8.8 million and $12.0 million,
CONCLUSION
 CONCLUSION
 From a single privately-owned coffee shop to becoming a
publicly-owned corporation with over 10,000 stores in 37
countries worldwide, Starbucks has been through some
growing pains to where the Company stands now, all
because of the vision of its founder Howard Schultz.

 The Company has been very successful in achieving its goal

to become the world's leading coffee brand.

 As the Company's full efforts has been focused on store

expansion and new market discovery, Starbucks may have
neglected some consumers' concern that Starbucks brand
is too pricy.
 CONCLUSION (cont’d)
 It appears that Starbucks' main marketing segment is the
young adults with its coffee shop setting and music service
additions. There does not seem to be any special services
being offered to older adult retirees.

 Since the Company has been concentrating on developing

more blends of coffee drinks, Starbucks may have over
looked the potential market of different healthy tea drinks.

 Although Starbucks maintains a top-notch management

team, the Company does not seem to have a well-
organized consumer relations department.
RECOMMENDATION
 RECOMMENDATION
 Starbucks should consider the general demand and
work a price reduction strategy into the Company's
overall pricing strategies.

 Price reduction strategies may include a rebate or

coupon promotion program as the increase in sales
will offset the costs of these price reduction programs.

 Starbucks should consider tailoring some of its coffee

shops to accommodate these older adults, perhaps
another line of special drink products and services.
 RECOMMENDATION (cont’d)
 Starbucks should also consider researching into the
tea specialty drinks market. Tea drinks will increase
popularity because their perceived value of healthy
benefits.

 Starbucks may need to review its company policies to

see if updates are needed to address different
consumer relation situations.

 Starbucks may consider locality pay to compensate

employees who are working in Starbucks store where
the local living cost is much higher compared to other
towns.
 THANK YOU
- Question and answer
session -