Coffee Shop: Starbucks

Location: Muntinlupa, Metro Manila, in Alabang Town Center

a. What type of retail location was used

The retail location used is a planned shopping center. The coffee shop located in this area

is located in a regional shopping center. Alabang Town Center is 520,000 sq ft which

falls within the range of the regional shopping centers’ size. It has at least 100 stores and

provides a wide selection of retail products. The goods and services offered here range

from convenient to unsought/specialty goods or services. The shopping center has one or

more department stores with ample parking. ATC is most often sought for one-stop,

family shopping, and leisure. It is located in the suburbs of Metro Manila, thus it is

surrounded by communities and around a 30 minute drive at most.

b. Using factors in store location, assess whether you have a good or bad location.

The location of Starbucks is appropriate and favorable. The type of store matches the

location it is in. Starbucks is a coffee shop that targets those in the middle and upper

middle class, focusing on offering attractive ambience, experience, and quality products.

People who go to Starbucks in ATC aim for convenience and accessibility. Being in a

regional shopping center in the suburbs, it is close to neighborhoods and schools of those

living in the area. Additionally, ATC is a shopping center with high foot traffic reaching

around 130,000. Being located in a shopping center also offers good condition of the

building, adequate utilities around, and enough space.

c. What types of merchandise is available

The merchandise offered at Starbucks are mostly convenience and shopping goods. The

convenience goods include those near the counter or placed in the queuing area, such as

coffee packets and different types of food. These trigger impulse purchases most of the

time. As for shopping goods, these include the coffee they make and sell as it is more

researched by consumers and what is able to give Starbucks the competitive advantage

against other coffee shops. This is where effective pricing and marketing come in as this

is what attracts and persuades the customers to purchase. Shopping goods also include the

mugs, cups, tumblers, and other Starbucks merchandise. These products are often sought

by customers and compared extensively by price and quality.

d. What merchandise strategies (e.g. excitement generation etc) did you observe

The first merchandise strategy observed in Starbucks ATC is Traffic Building. Strabucks

carries a variety of products aside from their coffee. In most stores, along the queuing

area are strategically placed complimentary products such as pastries and mugs. These

are most likely to draw attention in the queuing process, and allow customers to have the

time to observe surrounding products such as the mugs and tumblers. This is also the area
 in the store that is most visible inside and outside and has the most foot traffic. Another

strategy is Excitement Generating. Starbucks is also known for “creating an aura of

‘exclusivity” with their reward system. They also generate excitement through releasing

seasonal and limited edition products that encourage customers to visit their stores.

e. Assessment of merchandise planning

Starbucks has effective merchandise planning. They possess the appropriate amount and

kind of products. It offers seasonal and staple products, and capitalizes on product

opportunities for fashion and fads. In terms of range, it consists of an adequate assortment

enough for it to not be confusing for customers. They provide variety in their handcrafted

beverages, fresh food, and merchandise. Their price is competitive and strategic for them

to be a go-to brand of many customers and provide products within the low, medium, and

premium range. Product assortments are also placed strategically as what can be inferred

from the Traffic Building strategy they equipped. They have different price levels and

sizes, and those most sought after products are highlighted in their store. The space inside

is also spacious enough for customers to roam around and observe other products. They
 also make good use of fixtures for display such as shelves, baskets, and warm spotlight

lighting.

f. Recommendation/s for location and merchandising

The location of Starbucks inside a regional shopping center is optimal and highly

advantageous. Given the target market of Starbucks, Alabang Town Center effectively

attracts the targeted segment given its proximity and availability of different facilities,

with it being located in a shopping center and near the parking areas. Its only limitations

being the restrictions brought about by being anchored by the shopping center it is

located in, and the possibility of decrease in demand for those types of products. In order

to decrease those risks, they can set up independent kiosks located near the mall as well

as vending machines. Dispersing the products this way can make Starbucks more visible

to those who are not aware of the brand and who would rather purchase in this manner.

Although it limits what Starbucks can offer, it is a good way to highlight core products

and increase visibility and demand.