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By Syed Izhar
So after deciding on target market companies need to design strategies as to how they want their product or service to be perceived by the consumers. With more than 16000 retail stores in 49 countries. a place between home and work for people to gather. (Kotler & Armstrong).Starbucks 2 Introduction: Starbucks Corporation is an international coffeehouse chain based in Washington. Target Market: Target market consists of set of buyers who share common needs or characteristics which a company decides to serve (Kotler & Armstrong). quality. making the grand total to be 16. U. Starbucks is by far the largest coffeehouse chain in the world. read. Schultz’s vision of Starbucks was that of ‘Third Place’ i.832 while licensed stores are 7.e. promotion.S. but to enjoy the unique atmosphere. Secondly it needs to focus more on outlook and environment of it stores and need to upgrade them from time to time. Zev Seigl (history teacher) and Gordon Bowker (writer). Like any other company Starbucks aims to increase its profits. helping to create a unique atmosphere. surprisingly is the brain child of two teachers and a writer. . a well trained. distribution and pricing approach which hopes to achieve a firm’s marketing objectives with in specified frame of time. etc. According to Starbucks annual report 2009.635. with a desire to buy premium products.803. they visit to enjoy the atmosphere. People not just visit Starbucks for coffee. it’s a complete experience. to achieve this goal Starbucks use variety of strategies which has made it the market leader. product class. introducing new and innovative products and focusing on higher standards of customer services. Starbucks strategically positions each store with hopes of matching the specific location. number of company operated stores are 8. Positioning: Positioning is how consumers perceive a product or service and this perception is based upon attributes such as price. application.A. Jerry Baldwin (English teacher). Customers are able to socialize. Starbuck’s target market is middle and high income workers. study or enjoy music while drinking coffee. However at more specific level we can say that. Starbucks at launch adopted undifferentiated marketing strategy (when firms ignore market segmentation and targets whole market with one strategy). Firstly to provide this experience Starbucks needs. So Starbucks is more than a coffee shop. interact and relax and all this not for just a cup of coffee. Starbucks positioned it self as a premium product in coffee industry by setting high standards. Marketing Strategy: Marketing strategy is a plan which consists of product development. However it gained great grounds when Howard Schultz took it over in 1987. Starbuck. a well groomed human resource. To provide this unique experience consistently they need to keep two things in mind.
Price: In simplest words price is the monetary value of products and services. Starbucks has the advantage of having best quality stores throughout the countries they are in. ‘If you keep your promise. etc. Price is psychological tool used by marketers because customers generally have the perception of ‘high quality high price’.. Starbucks has well trained human resource which helps them achieve TQM (total quality management).Starbucks 3 Marketing Mix: Marketing mix is the combination of product. Starbucks has direct interaction with customers which helps in building good customer relationship. using nonfat milk. SWOT Analysis of marketing strategy of Starbucks: Strengths: • • • • Starbucks ensures high quality. buying premium quality coffee from Ethiopia. . customer will keep you!’ (Kotler & Armstrong) Place: Company’s products or services are delivered to customer through distribution channels. To keep the promise of premium quality they need to have good relations with the suppliers. Starbucks use event marketing as a promotional tool. personal relationship with customer is vital for them. Promotion: Promotion is the communication link through which seller manipulate buyer’s purchase decisions. They also need to have well trained staff to provide excellent customer services along with the premium quality products. They focus on word-of-mouth and letting its high quality products speak for it self. Product: Starbucks positioned its products as premium. place and promotion. price. Kenya. Starbucks is never found on billboards and TV adds. to provide highest quality of coffee and other raw materials needed. Starbucks had taken quiet a few steps in this regard such as. Starbucks charge high price and their position is justified because in return they keep their promise of high quality product and value added customer services. Marketers have to decide on the place of these channels. and developing new products through joint ventures. Starbucks is growing world over. All these show importance of ‘quality’ at Starbucks. Famously known as 4 Ps of marketing.
Take advantage of the presence in different countries of the world by recognizing more markets in which they are not currently present. they have begun by introducing an extension of a product line targeted to this segment.S.g. This is promotional tool used by most of the companies in the world to create brand awareness and support brand loyalty. which first of all determines. More than 85% revenues come from U. whether conditions. Competitive coffee shops. Conclusion: The main objective of ‘Marketing’ is to build profitable customer relationship. People are becoming more health conscious these days. Fluctuating coffee prices and availability of coffee due to rising trends of export quota and protectionism. Starbucks strategic goal is to increase market share of the non-coffee drinker. good relationship with customers which help companies to be profitable.Starbucks 4 Weaknesses: • • • More than 75% stores are in US. fast food chains and restaurants. Starbucks is developing new products to ensure further market growth. Increase the Starbucks merchandizing line. Starbucks strategy to attract customers is not only by providing quality products and excellent services but also varieties of flavors customers’ desire. so Starbucks can target that niche. This calls for more brand awareness and promotional activities outside U. i. They need to have more and more of TV adds so as to reach every corner of the globe. Opportunities: • • Healthy food. political conditions in the countries producing best quality coffee.S. Starbucks .e. what are the needs and wants of customer? Are these needs or wants explicit or implicit? Has any one else identified these needs or wants before us? How can we cater these needs or wants in a better way (more profitably) than competitors? All these questions seem simple but answer to every one of them has lots of dimensions to cover. To ensure market growth. for this reason it is developing products for non-coffee drinkers. To achieve these marketing goals a strategy is laid down. Volatile nature of coffee market e. Like for example they are present in a country A and country B is neighboring country of country A then they can use the cultural similarities of country A to decide on the investment in the market of country B. More Co branding and joint ventures (as it is already doing with big names like Pepsi). They need to exploit the opportunities in other countries by using strong brand name they have developed with time. • • Threats: • • • • Quality is not a sustainable competitive advantage.
A ‘good word of mouth’ helps in promoting a brand. Both of the competitors use pricing strategies to compete with Starbucks. which is a good technique in B2B marketing but Starbucks being in category of B2C should use other marketing channels to promote its brand. and Strawberries & Crème. Starbucks is the market leader by providing a series of variety of products. Starbucks rely more on ‘word of mouth’ promotional technique. serving people. which demands them to be at their best all the time. In nut shell Starbucks should use other marketing channels to promote its brand so that it can retain market leadership and grow further. Vanilla Bean Crème. Starbucks use events to promote its products. Their other competitors (for extended product line) include fast food chains like ‘McDonalds’ and ‘Burger King’. Advertisements are part and parcel of brand development. so that’s not a very good idea to promote the brand through one technique only. brand value through customer relationship. in same way a bad word of mouth can damage brand image severely. Although marketing expenses seem big but the results they generate are even bigger. . While entering a new competitive market Starbucks must compete to retain brand recognition of its core (competitive) products and increase awareness of its new product line. “We aren’t in coffee business. at its well decorated stores. Coke (by using promotional campaigns and advertisements) has the brand value of $67. We are in people business serving coffee” – Howard Schultz. Local coffee shops and coffee brands are also their competitors in that segment. For Starbucks main competitors are ‘Dunkin Donuts’ and ‘Krispy Kreme’. Recommendations: Starbucks should concentrate more on its advertisements.5 billion. without compromising on quality at any cost. Starbucks has created a value for people’s money and had built. this goes to show how important brand development and brand awareness is. through well trained employees and workers. and is building. Double Chocolate Chip Crème.Starbucks 5 Frappuccino line has been extended to include 3 new flavors.
G. . 3. New York: John Wiley & Sons..Starbucks 6 References: 1. Marketing Management: Strategy and Cases (4th ed. Starbucks website. and Supplemental Aspects of Integrated Marketing Communications (4th ed. T. O. (1990). Shimp. L. 5. Principles of Marketing (10th ed. Fort Worth: The Dryden Press. (2004). Dalrymple.http://www. & Walker..). D. Advertising.).starbucks. Boston: Irwin. H.). Promotion. New Jersey: Prentice Hall. (1986). 2. & Armstrong. Kotler. & Parsons. Boyd. P.com 6. (1997).. Starbucks Case Study 4. Marketing Management: A Strategic Approach.
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