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Unit 4 Marketing principle Starbucks case
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Introduction
The paper is trying to
evaluate the marketing strategiesof Starbucks and their international
expansion. The paper would look into different elements of marketing process,
focusing on STP strategy, deploying marketing mix elements and using marketing
mix elements in different situations for the organization. Present paper would
deploy these marketing principles in order to help Starbucks to evolve with
exclusive marketing planning process.
Start your report by
explaining the various elements of marketing process based on the Starbucks
Marketing is nothing but a
managerial and social process where in Organizations attempts to develop a strong
relationship with customers by offering valuable services to customers in order
to earn value from them. It is very imperative to understand what existing and
potential customers want to know their needs so that appropriate services can
be offered to them and in return value can be generated from customers. And
customer relationship management activities (Best,
2004) are a very important tool in this. The process of
analysing marketing opportunities, selecting target
markets, developing the marketing mix and managing the marketing effort is
known as marketing process.Four
elements of marketing process for Starbucksinclude:
1. Analyzing the situation faced by Starbucks at
present: Situation analysis can be viewed in terms of analysis of the external
environment and an internal analysis by the firm. SWOT (Strengths,
weaknesses, opportunities and threats) analysis framework can be used to
conduct internal analysis of the organizationfor Starbucks while external
analysis depends upon the external environment such as political,
environmental, technological, social, economic and legal.
2. Developing unique marketing strategy for the
organization: unique marketing strategy is derived by the organizational
objectives of Starbucks. Market Segmentation, target market selection and
positioning the product within the target market would be defined for Starbucks
and uniquemarketing strategy would be developed.
3. Develop elements of marketing mix for
Starbucks: Based on marketing strategy for Starbucks following actions will be
taken on marketing mix elements
a. Product development
b. Pricing decision
c. Distribution contracts
d. Promotional campaign development
4. Implementation and control of marketing
strategy: Result of the marketing efforts would be monitored closely. With
changes in market conditions, marketing mix elements will be adjusted
accordingly.
1.1 Prepare a SWOT analysis
of Starbucks and explain the importance of using SWOT analysis marketing tool
Starbucks Corporation is an
international coffee and coffeehouse chain based in Seattle, Washington,
United States. Starbucks is the largest coffeehouse company in the world. SWOT analysis of Starbucks can be given as
under:
|
Strength
|
Weakness
|
|
1. Global coffee brand built upon a reputation
for fine products and services
2. Image of quality products
3. Starbucks has a significant geographical
presence across the globe (10000 café and 17000 coffee shops in 40
countries)
4. High profitability ($8.0 m in FY 2013)
5. Starbucks is known for its highly knowledge
base employees.
|
1. Price of the products of Starbucks is very
high as compared to the products offered by its competitors such as Costa
Coffee and McDonalds
2. Competition between two stores of the
company is another area of concern
3. Additional food products such as Salad and
Sandwiches are creating low profit.
4. By aggressive expansion and high saturation
due to overcrowding in the market leads to self-cannibalization and
diminishes long term growth targets of Starbucks
|
|
Opportunities
|
Threat
|
|
1. With increase saturation and
self-cannibalization of the US market, Starbucks international strategy
becomes very important. Starbucks has made good inroad into many countries by
making joint ventures.
2. Starbucks has leveraged the use of mobile
applications and has an investment partnership with Square, a mobile payments
app that is integrated with its Starbucks app. This creates an ease of use
process for customers, aligns customer loyalty through reward programs.
3. Adding new products into its offerings to
increase revenue.
4. New distribution channel.
|
1. Biggest threat that Starbucks faces with
the market being at a mature stage, there is increased pressure on Starbucks
from its competitors like Dunkin Brands, McDonalds, Costa Coffee, CCD, mom
and pop specialty coffee stores.
2. High price of Starbucks’s products is a
threat to lose customers to its competitors.
3. Huge investment in large number of stores
can leads to financial threat
4. Rising dairy costs.
5. Market saturation and economic slowdown.
6. The shift of consumers toward more healthy
products and the risk of coffee culture being just a fad represent a threat
for Starbucks going into the future.
|
SWOT analysis is
animportant framework for generating strategic alternatives from a situation
analysis. Identification of SWOTs is important because they can
inform later steps in planning to achieve the objective for Starbucks. SWOT is the foundation for
evaluating the internal potential and limitations and the probable/likely
opportunities and threats from the external environment.
1.2 Next present and
evaluate the marketing objectives of Starbucks and explain how defining
marketing objectives can help a business to develop marketing strategies. How
does this contribute to the benefits of costs such as market orientation as
customer satisfaction, desired quality, service or consumer care, relationship
marketing etc.
The marketing objectives of
Starbucks can be given as under:
§ To reposition their brand:To retain existing consumers and build new
consumers base brand repositioning is required to differentiate Starbuck’s
brand from its competitors.
§ Promotional Strategies:Starbucks will continue to adopt new
promotional outlets in order to reach consumers.An active participation on Web
2.0 platforms, televisions advertisements, and email marketing will all be
utilized to promote products and initiatives.
§ Development of new business: Adding new food categories, adding new stores
with new national and international locations is imperative toincrease
Starbucks business.
§ To develop global marketing mix: Global marketing mix with local
marketing strategies according to specific market is very important to become a
global brand.
Marketing strategy of the
organization is dependent upon the objectives of the organization. Therefore it
becomes important that Organizational objectives should be defined properly. By
defining marketing objectives for Starbucks their target audience and overall
goals would be clear and these would form the marketing mix for the
organization.
Market orientation helps
Starbucks to collect the information pertaining to customers and fulfilling
these needs by making them a part of the overall marketing objectives for the
organization (Baines et al, 2011).
In the next task you will
focus on the concepts of segmentation, targeting and positioning (STP strategy)
2.1 Start this task by
analyzing three micro and three macro environmental factors influencing
marketing decisions in Starbucks
Three macro environmental
forces affecting decision making in Starbucks can be given as under:
1. Political and legal factors:Starbucks needs to import coffee beans from
different parts of the world. Starbucks must worry about increases taxes and
tariffs from many parts of the world like South America and Africa. Because of
the nature of politics, it may be very hard to predict how reliable their
sources of beans are, so Starbucks must continually has alternatives for
importing coffee to supply its demands.ers looking for taste of good coffee and
premium brand
In task 3 you will start
analyzing marketing mix elements which are in the heart of all marketing
strategies. As before, think about Starbucks while addressing all the elements
of this task.
One of the major concepts
in the modern marketing is once the company has decided its overall marketing
strategy than it should plan the details of the marketing mix. "Marketing
mix is the set of controllable, tactical marketing tools (product, price,
place, and promotion) that the firm blends to produce the response it wants in
the target market" (Kotler and Armstrong, 2006). Starbucks has a made good
decisions on marketing mix tool.
Figure 1: Showing the
marketing mix elements
3.1 Start by explaining how
products in Starbucks are developed in order to make sure that competitive
advantage is sustained. You should focus here on differences in products
between Starbucks and different coffee shop. Provide at least two examples.
"Product means the
goods and services combination the company offers to the target market".
Starbucks has used Brand name, Quality, Variety and Services as their Product
tool which can be concluded by this statement, Starbucks with a good Brand name
provides best Quality and with the Variety of Products. Initially
Starbucks started with the coffee than it has included non-fat milk, cold blended
beverages. But and services (Reid
&Bojanic, 2010).
unit 8 research project
3.5 Finally at the end of
this task you were asked to provide short analysis of additional elements of
the extended marketing mix based on the examples of Starbucks.
There are basically three
added components of Starbucks which are important in order to extend their
marketing mix and these elements are processes, physical evidences and People.
Starbucks is a very process oriented organization. It invests money and time in
framing processes and making sure that all these process are implemented
properly in the organization. Starbucks makes use of the blue printing
technologies like flow charts and presentations through diagram in order to
improve the planning and processes deployed in the organization (Britten,
2012). Starbucks have several processes such as Artificial intelligence,
stimulation and forecasting in place so as to improve the overall forecasting
and data analysis processes deployed in the organization. Human resources are
the vital component of the overall strategy for organization. Starbucks invest
lot of cost in hiring right people; make special training arrangements to train
the hire people so that they can polish as per the objectives of the
organization. Only train staff can offer best services and products to its
customers. For that Starbucks has deployed exclusive training program and
recruitment program. Some of the additional privileges offers by Starbucks
include free Wi-Fi, music, trained employees, art work, comfortable chair and
right combination of lighting. All these stuff helps Starbucks in providing a
pleasant ambiance to its customers. The store environment in Starbucks is
comfortable for students, researchers and readers etc.
Last task is to present
your ability to use the marketing mix in different contexts.
4.1 To begin with you are
asked to plan and prepare marketing mix for two different segments of market in
Starbucks. Use here an example of one existing segment and propose the second,
new one. Design for both segment marketing mix plan (4P).
The two segments selected
in the present context are Segment A and Segment B wherein segment A is
existing consumer segment of Starbucks. Segment A consist of young age
consumers in age range from 19 to 29 years having educational qualification as
graduate or post-graduate and income range in moderate to high range. Segment B
for Starbucks would include people in age from 20 years to 45 years, married,
graduateall coffee demand while Starbucks needs to make aggressive expansion in
world market for promoting their products. There are number of factors which
differentiate international market and local/domestic markets. Some of these
factors are international joint ventures, gender issues, cultural differences,
marketing channels and consumer preferences etc. It was in 1996 when Starbucks
made an attempt and enter into joint venture with one of the local player of
Japan named SAZABY Inc prevailing in market (Nagle
and Holden, 2012). Starbucks adopted strategies such as buying out
competitor’s lease, intentional operations at loss andclustering of services
within a small area. Starbucks make their international foray in UK with buying
out Seattle coffee company and impacted consumers through capital and influence
of this company. Using local taste, deploying global human resource and mergers
& acquisition in international markets are some of the major global
strategies deployed by Starbucks in international markets.
This paper has focused on
laying down marketing strategies for Starbucks. This paper is highlighting the
analysis of internal and external environment, deployment of STP strategy;
building marketing mix and analysis of marketing mix in different situations
overall marketing planning for Starbucks have been deployed. This would help
Starbucks in order to maintain competitive advantage in highly competitive
marketplace.
Unit 4 Marketing principle Starbucks case
Get assignment help for this assignment at
$200 in just 48 hours
Introduction
The paper is trying to
evaluate the marketing strategiesof Starbucks and their international
expansion. The paper would look into different elements of marketing process,
focusing on STP strategy, deploying marketing mix elements and using marketing
mix elements in different situations for the organization. Present paper would
deploy these marketing principles in order to help Starbucks to evolve with
exclusive marketing planning process.
Start your report by
explaining the various elements of marketing process based on the Starbucks
