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Starbucks Marketing Plan

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STARBUCKS MARKETING PLAN

Table of Content

I.
II.
III.
IV.
V.
VI.
VII.

VIII.

IX.

X.

XI.
XII.

Company Description
Company History
Company Mission and Vision statement
Company Objectives
Technology used by Starbucks
Situation Analysis
a.
Competitors
b.
Trends
SWOT Analysis
a.
Strength
b.
Weaknesses
c.
Opportunities
d.
Threats
Marketing plan
a.
Product
b.
Pricing
c.
Promotion
d.
Placement
e.
Physical
f.
Process
g.
People
Marketing Strategies
a.
Expansion of Branches
b.
Development of In-Home Brewing Market
c.
To adopt Quality locations
Marketing Tactics
a.
Increase the specialties of Branch
b.
Capitalize on the in-home Brewing Market
c.
Launch of Ad campaign
1.11 Financial Impact of Plan
1.12 Summary

STARBUCKS MARKETING PLAN

Starbucks Marketing Plan


People can take a cup of coffee practically anywhere now-a-days. Nevertheless someway
Starbucks, Dunkin Donuts, and McDonalds have crooked this widespread drink into a market
offering worth pursuing around the whole world. To achieve this task, these companies have
eminent themselves using diverse marketing strategies designed at faintly diverse audiences. And
consequently, the modest cup of coffee has turned out to be incredibly much more than usual.
I.

Company Description

A research has been done on the probable launch of the Starbucks Company in the UK, which
shows how to combine the Starbucks way of doing with the local market. The mission as a
result is to fruitfully commence while paying attention to the peoples needs and expectations.
Starbucks is known for its multiple products like coffee, pastries, and sandwiches. The products
will be quality wise priced, as per the Starbucks strategy. As a result, Starbucks will be wellknown as a best brand around. Even though Starbucks will have to race with numerous other
coffee companies, but research show that Starbucks has a strong fondness with the budding
customers, although the competition scores better in some aspects (Schultz, 2013).

STARBUCKS MARKETING PLAN

II.

Starbucks History

Three friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker, who all had a craze for fresh
coffee, opened a tiny shop and began selling fresh roasted, gourmet coffee beans and brewing
and roasting accessories in 1971 at Pike Place market, Seattle, Washington. Starting as a single
shop specializing in high quality coffee and brewing products, the company grew to be the
largest roaster in Washington with numerous locations until the early 80s. Starbucks at present
holds just about 33% of the U.S. coffee market share with mesh revenues in 2011 of $11.7
billion. In addition to the U.S. market share, Starbucks finishes 2011 with over 17,000 stores in
55 countries globally. Starbucks is also paying attention on mounting its portfolio of products, all
to expand market share (Fitzgerald, 2013).
III.

Company Mission and Vision statement

The mission statement of Starbuck Company is:


The mission of Starbucks is to establish Starbucks as the premier purveyor of the finest
coffee in the world while maintaining our uncompromising principles while we grow
And some more about the mission is
1. Offer a great work atmosphere and delight each other with respect and dignity.
2. Hold variety as an essential component in the way to do business.
3. Apply the highest values of brilliance to the purchasing, roasting and unmarked release of
coffee.
4. Expand passionately customers all of the time.
5. Deliver positively to communities and environment.
6. Know that profitability is essential to potential success.
The Vision of the Starbucks is to provide a high standard beverage that can freshen up the mind
of a person and does not make him to do any other thing while drinking their coffee. (Kim, 2013)
The Vision Statement of Starbucks is:
To inspire and nurture the human spirit-one person, one cup and one neighborhood at a time.

STARBUCKS MARKETING PLAN

IV.

Company Objectives

The main objectives of Starbucks Company are:


1.
2.
3.
4.
5.
V.

To provide quality products that can nurture the mind of someone.


To gain maximum shares and become one of the most dominating force in the market.
Increase their market revenues every year by 5-10 %.
Increase their brand awareness among the peoples around the world.
To become super brand in the market of UK.
Technology used by Starbucks

Starbucks is also the same coffee provider companies as others do but what makes it a better and
unique company is the use of technology. They are now providing their best coffee maker
machine named as Verismo 580 Brewer to make peoples life more comfortable. They are using
Versimo pods, instead of K-cups as pods is more comfortable and safe for us. Now-a-day
wireless charging is emerging as a new technology and Starbucks has announced recently to
install almost about 100,000 wireless chargers in its stores to provide customers the better
facilities than other marketing companies. Numerous Starbucks stores have super hightech Clover coffee machines, which bond to the cloud to commune the performance of the
machines -- and to track customer preferences. Starbucks is a colossal in mobile e-commerce, as
the company's mobile transactions reach almost $1 billion in 2013. The company has exposed
that its mobile payment and loyalty app is used by almost 10 million people for an average of 5
million weekly transactions. (Gawer, 2012)
VI.

Situation Analysis

Competitors
At present, there are multiple of coffees providing companies present in the UK, like Costa,
McDonalds, Nero, Wild Bean Cafe, Muffin break, etc. Costa is the leading coffee providing
company in the UK market right now. So Starbucks will have to face high competition in the

STARBUCKS MARKETING PLAN

coffee market. Competitors such as McDonalds have recently introduced gourmet, coffee
shop style which is highly providing help to their marketable products. Several competitors have
successfully embattled customers looking for lower-priced and onthe-go options, made
available by drive thru services. One factor favoring Starbucks over competitors is its ability to
be flexible when it comes to its store size and layout. This allows Starbucks to modify each
individual store based on location, and to widen into alternate territories such as grocery stores,
rest stops, and so on. (Chua, 2013)
Trends
As the UK economy has improved much in the recent time, peoples are starting to use much of
their salary at different events like hiking, going out with friends on multiple trips etc. People of
all ages are intended to provide themselves the best luxuries moments. So to provide them the
best of tastes in beverages, Starbucks is providing coffee and different products of the best
quality in town.
VII. SWOTs Analysis
Strengths
Starbucks is the major boss in the coffee market whose Products are diverse. It has almost 16,635
stores worldwide. All the retail stores of the company have licensees; the quality of the product is
on equity to its competitors, operating in more than countries worldwide, with approximately
13,000 employees. The working environment of the company is brilliant. Financial conditions of
the company are good, and have convenient locations like libraries, shopping malls, etc.
Customer service is excellent as well as they have loyal customers also. The promotion system is
good and also has good relationships with suppliers. Starbucks focuses on the eminence of their
coffee by using the optimum coffee beans and maintaining newness with their Flavor Lock Bags.
These strengths allow the firm to meet up customers desires because they let the customer to
practice a rich, alien mix together of coffee, and a mode of life. They focus on the class of their

STARBUCKS MARKETING PLAN

merchandise so that the customer can feel the difference between their gourmet cup of coffee and
the conventional. Furthermore, they offer customers with feeling of sophistication, style, and
wisdom of knowledge while they stroll into their coffee bars. They pretend authentic, Italianstyle coffee bars to permit customers to practice a way of life when they stop over at their store.
They are thriving with this for the reason that they appoint employees who are well sophisticated
and keen to express the Starbucks culture.
Above mentioned strengths distinguish the company from its competitors as Starbucks has
urbanized a position in the market as a high-end brand of coffee. Furthermore, the atmosphere
inside a Starbucks coffee bar provides customers a feeling of sophistication, style, and a sense of
knowledge. In addition, Starbucks has gained faithful and enthusiastic employees, which
transitioned into excellent customer service (York, 2013).
Weaknesses
Every company has some flaws in their operating system as Starbucks also. They are using a
high quality machines and providing extra services to the customers which increases their cost.
Starbucks is trying to expand their offices globally, which alternately is causing multiple internal
problems. The prices are little high as compare to other competitors.
The most significant cause that these weaknesses stop the company from fulfilling the
customers requirements is because of the incident that prices should go up at Starbucks, or the
market should practice a recession, natives are expected to spend more conservatively, because
several people think of coffee as an alternate product. If patrons are not devoted coffee drinkers
and they prefer to expend conservatively, they might choose a cheap cup of coffee more than the
premium price that Starbucks charges for its gourmet coffee. Above weaknesses discriminate
Starbucks from its competitors since other competitors are not getting punched as hard through
this economic recession, for the reason that Starbucks major competitors are cheap operators
such as McDonalds (Hawkins, 2009).
Opportunities

STARBUCKS MARKETING PLAN

The Rapid increase in the development of social media has allowed Starbucks to create their
Facebook and twitter accounts. Recent partnerships with different projects like RED, Pandora
and iTunes have allowed themselves to increase their customers. The online Coupon system can
be helpful in creating a cult of online followers. Feasibility of iTunes apps can make locating
Starbucks stores and reading nutritious facts fun for customers. With a loyalty card for their old
customers, Starbucks can offer different offers and rewards to them, which can be a major fact to
get the attention of new customers.
These opportunities are connected to serving customer needs as Starbucks will be able to assure
the desire for their coffee along with the experience in other countries. Moreover,
technological advancements tolerate Starbucks to boost quality and reduce waiting time.
Technology is continuously improving, making things quicker, faster and better. It most certainly
will make its way towards the coffee business. (Talpau, 2011).
Threats
Independent coffee shops are sprouting up widely, wooing customers away from Starbucks by
providing different kinds of flavors. An increase in the competitors causes the Starbucks to earn
less profit. Seeing that the prices of dairy products and coffee beans are increasing day-by-day,
which causes trouble Starbucks to decrease their prices due to which customers move ahead.
Consumer fear of corporate giants putting local coffee shops out of business causes potential
customers move away. Because of political, economic and weather conditions Starbucks may
practice supply disruptions, adding momentous cost to the firm (Thackeray, 2012).
These threats are associated with fulfilling customers needs since they affect the price the
customers give for a cup of coffee. As the economy is going through a recession, customers who
are not devoted coffee drinkers are possible to look for surrogate products, as substitute products,
such as coffee from McDonalds are not as much expensive. Competitors are rising and thriving

STARBUCKS MARKETING PLAN

during the recession of economy as standard coffeehouses like Starbucks are experiencing
difficulty lowering prices, though the cost of coffee beans and dairy products are increasing.
Only time will tell the turnaround of the economy. Multiple signs are showing the stability of the
market in the near future, but till this happens, Starbucks will be in pressure to race with low-cost
operators such as McDonalds. Even though Starbucks has always competed alongside low-cost
operators, the emergence and booming of these competitors throughout economic recession will
continue to proceed as a threat.
VIII. Marketing plan
In order to maximize their brand awareness and establish them as the most recognized and
respected brands in the world and within their target market, Starbucks implemented a wellintegrated marketing program that would utilize a marketing mix (product, price, place,
promotion, People, Physical and Process) that would satisfy the needs and wants of its target
market. The four elements of the marketing plan that Starbucks will utilized is as follows
Product
Although coffee will remain the center merchandise and focal point of Starbucks, but the
inclusion of multiple new products will prolong the Starbucks manufactured good portfolio. As
multiple Also, as part of the marketing campaign, Starbucks is making a push for its store
employees to provide customer with exceptional customer service. For example, part of the
campaign is highlighting Starbucks willingness to remake a drink for a customer if it is not
satisfactory. This will guarantee that Starbucks is constantly putting the best product forward.
Pricing
Starbucks has always presented a variety of products that differ in price. With the financial
system slowing starting to gain momentum, Starbucks main goal must be to keep prices on
parity with competitors. In addition, a market prospect offered itself through the downturn at
home coffee drinkers. In order to take advantage of on this market segment, Starbucks must have

STARBUCKS MARKETING PLAN

to provide home coffee delivery at reasonable prices close to competitors such as Dunkin
Donuts, whereas also matching economic factors such as delivery costs, fair-market expenses,
and more.
Promotion
Starbucks will prolong to take on new promotional outlets in order to reach customers. An active
partaking on Web platforms, television advertisements, and email marketing will all be used to
endorse the goods and initiatives. Initiating contests for clients to chip in will be a main focus.
These can vary from coffee bag design competition to social media competition using platforms
such as Facebook, Instagram and Twitter. One more promotional prospect that will be used is
participation in Daily Deal sites such as Group on and Living Social, in order to connect the
Starbucks brand with reasonably priced deals.
Placement
The conventional methods of circulation will continue to control the placement of Starbucks
foodstuffs to its consumers. One area, which shall be discussed additional, is how to better
pierce every other retail outlets such as grocery stores, in order to attain the attention of the
market of at home coffee drinkers. Also, other potential sites for warehouses shall be scouted and
considered in order to anticipate for potential growth.
Physical
To get the attraction of customers, Starbucks will put well decorated furniture, different sign
boards, and provide a specific uniform to their staff. They will make some area for the kids to

STARBUCKS MARKETING PLAN

play there and put some staggers for them. The Company will provide smoking free area for their
customers for their health safety and put some music to provide some enjoyable environment.
Process
Quick service will be a great plus point for the reputation for company as people will come more
here to save their time instead of going to other providers shop. An extraordinary step will be to
collect feedback from the customers and give respect to their suggestions by improving
themselves according to suggestions.
People
Staff behavior of any company shows how good the company is. So, to gain the attention of
customers, the company has to hire a well maintain, skillful, active and well educated.
IX.

Marketing Strategies

Expansion of Branches
Company will conduct a year of intense market research in a potential location for new coffee
shops. The Starbucks strategy for these specialty shops is to drive away from the communal
Starbucks atmosphere and the current market approach that they are presently in. These specialty
shops will not exhibit the Starbucks logo and many customers will not know the business is
stimulated by Starbucks. The locations of the shops wont be in well-populated metropolitan
cities as these will be in smaller cities to portray the hometown atmosphere specifically for each
location.
Development of In-Home Brewing Market
A research is going on to develop an in-home, single cup coffee brewer that is similar to the new
Keurig machine. It will be the Starbucks brand machine and each single cup coffee cartridges
will also be Starbucks brand. This will be a great success for Starbucks in the home brewing
market. An example of a similar product being a success is the Margaretville brand named
blender. The name of the blender has high brand recognition, which has made it a great success.

STARBUCKS MARKETING PLAN

Starbucks has tremendous brand recognition; that is strictly their competitive advantage over the
Keurig machine, the name says it all. Starbucks plans to eventually phase out their espresso
machine and replace it with the Starbucks in-home brewing system. This strategy will greatly
help Starbucks compete, if not take over the in-home brewing. This will now make them a
competitor of the in-home brewers.
To adopt Quality locations
The continuation of openings of Starbucks on every corner was not in Starbucks best for future
profits, the quantity shouldnt be the focus. The focus of Starbucks is in the quality, not just the
coffee, which has already been established, but also the quality of the businesses. There will be
an undercover Starbucks board that continually conducts to the customers opinions throughout
the current Starbucks locations (Thompson, 2004).
X.

Marketing Tactics

Increase the specialties of Branch


In order to create an effective, customized specialty sub-brand, there will be an expansion in the
coffee and tea locations, but this time, it will be different from the past. There will be a new
R&D department dedicated to developing six different experiences customized to particular
markets. The goal is to do enough market research to design six different customized experiences
that we can then expand with a more personal approach to each location. After the six
experiences are established, potential franchises will have the option of applying to open a new
shop in their town. After an application for a franchise is submitted, the R&D department will
analyze the potential market and decide which experience would be best for that particular
location. This will allow Starbucks to directly compete with small town coffee shops and create a
wider platform for Starbucks to penetrate the smaller markets.

STARBUCKS MARKETING PLAN

Capitalize on the in-home Brewing Market


In order to compete directly with Keurig, strategy is to sell the Starbucks Single Cup Brewers in
all Starbucks retail locations, Wal-Mart, Target, and anywhere that coffee brewers are sold. By
creating own brewers and cartridges, can gain a significant amount of control in the single cup
market because of the consumers desire to brew our coffee, one cup at a time.
Launch of Ad campaign
This ad campaign will focus on sending the message that anyone can take the luxury and status
of Starbucks coffee, wherever they go. Starbucks hopes to create the belief that having a
Starbucks brewer in home gives a status and luxury that other brewers do not. The mission is to
portray a luxury that no other brewer can provide because Starbucks believe that no other
company offers coffee better than ours.
XI.

Financial Impact of Plan

For one brick and mortar, at approximately 10,000 square feet, the startup cost will range from
$150,000 to $300,000 depending on the price of land. After a significant amount of market
research and a review, the new shop location in the UK will bring in $500,000 to $800,000 in
profit per year. An estimated start-up cost of the entire in the home brewing division is 90
million. But in the next ten years, company market share will increase enough to position as one
of the top providers of coffee brewers in the United Kingdom. This division has the potential to
bring in an estimated 150 million dollars a year. The launch of an ad campaign will almost cost
15 million dollars. This includes, hiring a marketing firm, market research, TV advertising,
magazine ads, online ads, and billboard ads.
XII.

Summary

STARBUCKS MARKETING PLAN

In general, Starbucks has always kept a competitive advantage since its first shop in Seattle. But
now there are a big number of competitors present in the market that are providing a good
quality coffee. So in order to stay in the market and to compete with them, a focus on core
competencies and to avoid spreading themselves too thin is required. To beat competitors such as
McDonald and Costa, the company will need to create new marketing strategies, make
innovations, improve the quality of products and provide reasonable prices. To increase the
quality of products, suggestions from the customers will be a great option rather than creating
new products by their own as strength lies in the brand, not in the quantity company provide. By
implementing this media plan, it will most effectively reach the target audience and accomplish
the companys goal of creating more brand recognition and awareness of the new frozen and iced
drinks that Starbucks offers.

Reference Page
Schultz, M. (2013). Starbucks Global Responsibility Report: Goals and Progress.
Fitzgerald, M. (2013). How Starbucks has gone digital. In MITSloan Management Review.
Kim, E. (2013). The role of social media in crisis communication-A case study of Starbucks
(Doctoral dissertation, Texas State University-San Marcos).

STARBUCKS MARKETING PLAN

Gawer, A., Cusumano, M. A., & Strategy, D. S. (2012). How companies become platform
leaders. MIT/Sloan Management Review, 49.
Chua, A. Y., & Banerjee, S. (2013). Customer knowledge management via social media: the case
of Starbucks. Journal of Knowledge Management, 17(2), 237-249.
York, E. B. (2010). Starbucks gets its business brewing again with social media. Advertising
Age, 81(8), 34.
Hawkins, D., & Mothersbaugh, D. (2009). Consumer behavior building marketing strategy.
McGraw-Hill.
Talpau, A., & Boscor, D. (2011). Customer-oriented marketing-a strategy that guarantees
success: starbucks and Mcdonald's. Bulletin of the Transilvania University of Brasov,
Series V-Economic Sciences, 4(1), 51-58.
Thackeray, R., Neiger, B. L., & Keller, H. (2012). Integrating Social Media and Social Marketing
A Four-Step Process. Health promotion practice, 13(2), 165-168.