iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iii Assignment i

Submitted to: i

iiiiiiiiiiiiiiiiiiiiii Marium Shabbir i

Submitted by: i

iiiiiiiiiiiiiiiiiiiiiii Ayesha Farooq i

Roll no: i

iiiiiiiiiiiiiiiiiiiiiii 19010920-104
Section: i

iiiiiiiiiiiiiiiiiiiiiiii BBA 3rd (B)i i

Course Title: i i

iiiiiiiiiiiiiiiiiiiiiiii Principals of Marketing i i i

Course Code: i

iiiiiiiiiiiiiiiiiiiiiii MGT-206
TITLE: MARKETING ENVIRONMENT
i i i

iiiiiiiiiiiiiiiiiiiiii iiii
Q1. Indicate macro and micro environmental factors of Starbucks.
i i i i i i i i

Starbucks iis ithe iworld`s ilargest icoffee ibar ichain istarted iin i1971 iin iUS. iTheir ifirst istore iwas istarted
iin iLondon iin i1998. iStarbucks iacquired isettle icompany`s i67 icoffee i shops iin i1998. iTill i2015 iit ihas

i791 istores iin iUK. iThough ithe icompany ihas imade ino iprofit iin ithe ifirst i14 iyears.

There iare itwo itypes iof ienvironmental ianalysis

• Macro ienvironmental ianalysis i
• Micro ienvironmental ianalysis i
Macro ienvironmental ianalysis
▪ Political iIssues
This iaspect iof imacro ienvironmental ianalysis iindicates ithe iimpacts iof igovernment ion ibusiness.
iFollowing ifactors iare iexperienced iin imacro ienvironment iof iStarbucks:

Taxation ipolicy: iStarbucks ihas ito ipay ihigh iprices ifor icoffee, iif igovernment iimpose ihigh itax ito ithe
ifarmers iin icountries, iwho iare iproducing icoffee ibeans ifor iStarbucks. iSimilarly, icustomers ihave ito

ipay ihigher iprices.

Government istability: ipolitical istability iof iany icountry ishould ibe icarefully iinvestigated ibefore
ithey iplan ifor iexpand ito. iChanging iof igovernment ican iaffect itaxation iand ilegislation.

Employment ilaw: iA idecrease iin ilicensing iand ipermit icosts iin ithose icountries iproducing icoffee
ibeans ifor iStarbucks iwill ilower ithe iproduction icost ifor ifarmers.

International istability: iThe iglobal ieconomy imust ibe icarried iinto iattention ias iit ican iaffect
iStarbucks` isales iand imarket.

▪ Economic iIssues i
This icomponent irefers ito ieconomic iconditions iand ichanges isignificant ito ibusiness. iStarbucks iface
ifollowing ieconomic ifactors iin imacro ienvironment:

Interest irates: iAn iincrease iin iinterest irates imeans iinvestment iand iexpansion. iAnd ialso, imortgage
irepayments irate iwill irise iso icustomers ihave iless imoney ito ispend ion iluxury iproducts isuch ias icoffee.

iLow iinterest irates ihave ithe ireverse ieffect.

Economic igrowth: iIf ieconomic igrowth iis ilow iin ithe icountry iof ilocation iof iStarbucks ithen isales
iwill ifall idown. iCustomer iincomes itend ito igo idown iin iperiods iof inegative igrowth ileaving iless

imoney ito ispend.

Inflation irate: iInflation iis ia iterm ifor iincreasing iprices. iIt iis imeasure iby iusing iRetail iPrice iIndex
i(RPI) iin ithe iUK.

Competitors ipricing: iAggressive ipricing iand isales ifrom icompetitors icreates ia iprice iwar ifor
iStarbucks, iwhich ican idrive idown.
 ▪ Social iIssues
This iaspect ishows ithe isocial iconditions iand itrends iinfluencing iconsumers iand ibusiness. iStarbucks
i

must iaddress ifollowing ifactors iin imacro ienvironment.

Population idemographics: iThey ineed ito iidentify iand itarget itheir icustomers ito iaim itheir iproducts
ion ithem.

Attitude ito iwork: iThey ihave ito ifind iarea iwhere ilocal ipopulation ihave ihigh iattitude ito iwork. iSo,
itheir irecruitment iwill ibe ieasy, itraining iwill ibe ieffective iand istaff iturnover iwill ibe ilow.

Standard iof ieducation: iCreating inew ipremises iStarbucks ineeds ito ilook ifor istandards iof ieducation
iand iskills ilocally. iThey imust ibe iup ito idate iin iorder ito imake iany ibusiness ioperation isuccessful.

Working iconditions: iThey imust iaccomplish ihigh istandard iof ifriendly ienvironment iand ifollows
ihealth iand isafety.

Location: iThis iis ia imajor ifactor iit ishould ibe iin ian ieasy iaccess ifor iboth icustomers iand istaffs.
▪ Technological iIssues
Technologies iand irelated itrends iare iidentified iin ithis iaspect.
IT idevelopment: iStarbucks iis iwell iaware ito iextend iand iimprove iits iInternet ifacilities iand ialso itools
ito itarget icustomers, ianalyze idata, iand ideliver inew ifeatures ito ithe imarket iin ithe ishortest itime.

New iequipment’s iand iprocesses: iThe itechnology ilike ias icoffee imaking imachines iand ithe
icomputers isystem idevelopment ithat iStarbucks iuse ito ioperate itheir itill iregisters iwill ienable itheir

istaff ito iwork imore iquickly iand iefficiently.

Research iand iDevelopment iactivity: iStarbucks ihas ihuge ibudget iand ihave iallocated ithe iresources
ito ihave iaccurate iResearch iand iDevelopment idata.

▪ Legal i
Trade iand iproduct irestrictions: iStarbucks ihave ito iensure ithey idon’t iviolate ilaws ie.g., ireligious
ilaws. iAlso, ithey ihave ito ibe iattentive ion ithe itariffs ihave ito ipaid ifor iimport i/ iexport igoods.

Employment ilaw: iEach icountry ihas isome irestrictions ion iemployment ilaws. iLike istudent iwork ilaw
iin iUK, ithe ipublic iholidays ietc. iStarbucks ihave ito iaccount ithese ifactors.

▪ Environmental iIssues
Pollution iproblems: iCustomers iincrease ia ilot iof irubbish ithat ithey ileave ithe ishop iwith itheir icup iof
icoffee iand ithen ialso ileave iit iin ithe istreet. iSo, ithe ipackaging ifor ithe icup ishould ibe icarefully

iaccounted ito imake iit ienvironmentally ifriendly.

Work idisposal: iStarbucks ihave ito icarefully iconsider ithe iprocess ito idispose irubbish ias ithere iare
istrict ilaws iin imost icountries.
Micro ienvironmental ianalysis
▪ Suppliers i
The isuppliers iof iArabica ibeans iwere imostly iowned iby imedium-size ifarm iand itypically isold itheir
iproduction ito iprocess iby ilocal imarkets. iParticularly, ithese ifarms ihad ibeen iplaced iin ithe iPacific

iRim, iLatin iAmerica iand iEast iAfrica.

It iis ilegal ito isay ithat ithe iSuppliers ineed iStarbucks, ijust ias imuch, iif inot imore iso ithan iStarbucks ineed
itheir isupplies.

▪ Distributors/Intermediaries i
Distribution iis idone iby iKraft. iIt iis isold iin iMarriott, iairlines, iwebsites(starbucks.com) iand ieven iin
ibookshops ilike iwaterstones.

▪ Competitors i
o Caribou icoffee i
o Costa icoffee i
o Coffee irepublic i
o Nestle
▪ Customers/Buyers
Starbucks` itarget imarket iis iany iperson iand iany iage. iStarbucks iCoffee iCompany iexperiences ithe
istrong iforce ior ibargaining ipower iof ibuyers ior icustomers.

▪ Substitute i
Starbucks iCorporation iexperiences ithe istrong iforce ior ithreat iof isubstitution. iThe ihigh iavailability
iof isubstitutes imakes iit ieasy ifor iconsumers ito ibuy ithese isubstitutes iinstead iof iStarbucks iproducts. i

For iexample, isubstitutes ilike iready-to-drink ibeverages, iinstant ibeverage ipowders iand ipurees, iand
ifood iand iother ibeverages iare ireadily iavailable ifrom ivarious ioutlets, isuch ias ifast ifood iand ifine-

dining irestaurants, ivending imachines, isupermarkets iand igrocery istores, iand ismall iconvenience
istores