Marketing Plan Project Final

docx

School

University of Hawaii, West Oahu *

*We aren’t endorsed by this school

Course

BUSA 300

Subject

Marketing

Date

Feb 20, 2024

Type

docx

Pages

Uploaded by BarristerMoonLeopard43

Running head: STARBUCKS CORPORATION 1 Starbucks Corporation Marketing Plan Project (Final) UH West Oahu

STARBUCKS CORPORATION 2 Table of Contents 1.0 Executive Summary ................................................................................................................... 3 2.0 Company Description ................................................................................................................ 4 3.0 Situation Analysis ...................................................................................................................... 4 3.1 Environmental Scanning ........................................................................................................ 4 3.2 SWOT Analysis ..................................................................................................................... 6 3.2.1 Starbucks ......................................................................................................................... 6 3.2.2 Dunkin Donuts SWOT Analysis ..................................................................................... 7 3.2.3 McDonalds SWOT Analysis ........................................................................................... 8 4.0 Consumer Behavior Research .................................................................................................... 8 4.1 Purchase Decision Process ..................................................................................................... 9 5.0 Critical Issues ............................................................................................................................. 9 5.1 Changing Trends .................................................................................................................... 9 5.2 Recession and Increasing Production Costs ......................................................................... 10 5.3 Increased Competition ......................................................................................................... 10 6.0 Marketing Objectives ............................................................................................................... 10 6.1 Financial Objectives ............................................................................................................. 11 7.0 Target Market .......................................................................................................................... 11 8.0 Positioning strategy ................................................................................................................. 12 9. 0 Marketing Mix ........................................................................................................................ 12 10. 0 References ............................................................................................................................. 14

STARBUCKS CORPORATION 3 Starbucks Corporation Marketing Plan Project (Final) 1.0 Executive Summary Starbucks has been the largest coffeehouse globally for decades. The corporation's mission statement indicates that it values both customers and stakeholders by creating a welcoming and warm culture. Thus, the corporation plans to seize the opportunity presented by shifting consumer behavior to enhance its growth. Through innovation, new technologies, new products, and new markets, Starbucks plans to increase its revenue and shareholder value while ensuring high customer satisfaction levels and practicing corporate social responsibility.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

STARBUCKS CORPORATION 4 2.0 Company Description Starbucks corporation was founded in November 1985 by Howard Schultz and Jerry Baldwin, and its headquarters are in Seattle, WA. The company’s target markets are coffee and snacks lovers in the United States, Asia and the Pacific region, Africa, and the Middle East. The corporation’s core competencies include its strong human resource, as its employees are not only qualified but are also knowledgeable and accomplished (Geereddy, n.d.). Additionally, it is the first company in the U.S. to give full health coverage to its employees. Starbucks’ competitive advantage lies in its product differentiation, continuous innovation, quality products, and technology integration as it seeks to reach customers. This set of features has ensured it stands out from its competitors through enhanced consumer experiences. Starbucks’ mission is to inspire and nurture the human spirit through its “one person, one cup, and one neighborhood at a time” slogan. Markedly, at the heart of the company’s operations are its partners, its coffee, and its customers (Starbucks, 2022). The firm seeks to create a culture of warmth and belonging where everyone is welcome, act with courage in challenging the status quo to grow both company and other stakeholders, be present through dignified, transparent, and respectful connections, and achieve heights of industrial performance. 3.0 Situation Analysis 3.1 Environmental Scanning Social forces. Over the years, both developing and developed countries have seen a rise in coffee drinking culture. Unlike Russia, Japan, Germany, and other 35 Western countries, Africa, Asia, India, and China are expected to have an increase in population by 2050 (Dimitrakaki, 2021). In response, Starbucks has started expansion plans in these countries and adopted a multicultural marketing program to react to the increase in ethnic and racial diversity.

STARBUCKS CORPORATION 5 Lastly, Starbucks supports the development of urban cities as consumers are increasingly identifying with brands linked to social actions. Economic forces. Having positioned itself as a high-end coffee shop, Starbucks charges high prices for its products. As a result, it witnessed decreased sales in 2020 as households’ disposable income reduced as they were impacted by the economic effects of the COVID-19 pandemic. The cost of production also increased due to the rise in cost of labor. These economic forces have reduced sales at Starbucks. Technological forces. With increasing innovation and technology, companies and products face the threat of being replaced. Thus, Starbuck has incorporated technology and artificial intelligence to collect purchase data and use it to recommend orders to its customers. Starbucks has also responded to e-commerce by introducing a smartphone order and paying later strategy for its customers. These measures have enabled the company to remain relevant in the modern market. Competitive forces. Starbucks faces stiff pure competition from McDonald’s, Dunkin’s Donut, and Costa Coffee. The competitors are becoming more innovative, with lower price positioning to gain access to Starbucks’ market share. Thus, the company needs to formulate new strategies to keep its wide pool of customers. Regulatory forces. The business world and consumer market are becoming more complicated with the introduction of new laws. Some of these laws are consumer protection laws, company protection laws, and promotion, distribution, and pricing laws. Hence, Starbucks needs to ensure it adheres to the laws of every country it operates in since they vary from one region to another.

STARBUCKS CORPORATION 6 3.2 SWOT Analysis 3.2.1 Starbucks Strengths. Starbucks has a strong market position and is a globally recognized brand. Notably, in 2013 it had a market share of 36.7 % in the U.S. alone, and a global presence in over 60 countries (Dimitrakaki, 2021). Secondly, it has a strong brand, having been ranked 91st internationally in 2013. Moreover, according to the 2019 inter-brand index, Starbucks’ brand was worth $11.7 billion at the time, and it has strong financial performance, is highly diversified, has consistent and standardized flavors, and good employee relations; furthermore, the introduction of anti-discriminatory programs such as gender-neutral washrooms, enhanced its reputation among customers. These strengths ensure Starbucks can satisfy the needs of different consumers globally. Weaknesses. Starbucks charges relatively higher prices on its products compared to the competition. Due to its aggressive expansion, Starbucks’ markets have also become overcrowded and saturated (Goh et al., 2020). This outcome has resulted in self-cannibalization, which is threatening its long-term growth and profitability. The company also heavily depends on coffee for its income. As a result, an increase in coffee bean prices affects its coffee prices and sales prospects. Finally, its global presence causes a clash in coffee culture across countries. Opportunities . Market saturation in the U.S. has presented an opportunity to invest in new markets, such as India and Brazil (Chuang, 2019). The recent acquisitions by Starbucks present an opportunity to expand its product offerings and introduce small retail outlets. Lastly, technological advancement and partnership with Square have seen Starbucks introduce smartphone apps, which have eased access to its products by customers and increased their loyalty. Lastly, Mobile Pour, its new delivery system, presents an opportunity for expanding

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

STARBUCKS CORPORATION 7 distribution channels and brand extension. By capitalizing on these opportunities, Starbucks will guarantee its dominance in the market. Threats. The coffee industry is in its maturity stage. Therefore, Starbucks faces increased competition from Dunkin’s Donut, McDonalds, and Costa Coffee. In addition, the company derives most of its revenue from developed countries whose markets have become saturated (Geereddy, n.d.). Other threats facing Starbucks are changes in consumer taste and lifestyle, with consumers becoming warier of their health. Lastly, the global market for coffee is characterized by volatile price fluctuations over which it has no control. Therefore, eliminating these threats or adapting to them would help Starbucks ensure its long-term survival. 3.2.2 Dunkin Donuts SWOT Analysis Beneficial Harmful Internal Strengths (S)  Strategic Branding  Perfect Positioning  Global operations  Eco-friendly policies Weaknesses (W)  Poor targeting strategies  Slow and limited expansion  Lack of Finances  Over-reliance on the U.S market External Threats (T)  Rising production costs  Franchising  Recession  Healthy lifestyle trends Opportunities (O)  Diversify products  Invest in emerging markets  Invest in healthier products

STARBUCKS CORPORATION 8 3.2.3 McDonald’s SWOT Analysis Beneficial Harmful Internal Strengths  Strong brand image  Diversified market  Standardized production process  Technology Weaknesses  Overreliance on the Western market  Low product diversification  Franchise business model External Threats  Healthy lifestyle trends  Stiff competition  Different cultures across markets Opportunities  Innovative products  Expansion to the Middle East  Product and service diversification 4.0 Consumer Behavior Research Starbucks’ consumers are characterized by a sense of belonging since they are more concerned with the brand image and quality of coffee than the price. Additionally, they prefer to share coffee with friends in the afternoons in a quiet, private, and relaxing environment. Finally, they are influenced by social classes as they tend to associate with people who have high education qualifications, high-income levels, well-paying occupations, and those who are shifting towards a healthy lifestyle.

STARBUCKS CORPORATION 9 4.1 Purchase Decision Process Problem recognition. The process begins when a consumer perceives a need. Starbucks consumers’ perceived needs are triggered by advertisements and salespeople. Information search. After recognizing a problem, consumers search for information on products and services that will satisfy their needs. Starbucks’ consumers use both internal and external sources. Being value-oriented and frequently purchasing products, the customers mostly use their relatives and family for references and their past product experience with a product. Alternative evaluation. The consumer assesses the value of the available options. For Starbucks, consumers perceive value in terms of price, quality, and brand. Therefore, they select products with a strong brand image that they relate with high quality. Purchase decision. The consumer determines from whom to buy and when to buy. Starbucks’ customers use smartphone apps to compare offerings from different sellers of the same product. The decision is influenced by the sellers’ sale terms, brand, purchase experience, and the consumer’s disposable income. Post-purchase behavior . Markedly, this is the value realized by a consumer based on the actual experience with a product and their expectations. Given their repeat purchase behavior, Starbucks’ customers are satisfied in most cases. 5.0 Critical Issues 5.1 Changing Trends First, modern consumers are increasingly becoming wary of their health. In response, they consume more healthy products. Hence, Starbucks needs to offer healthy product offerings in its product mix and promote snacks and fresh juice to core products, such as its coffee (Chuang, 2019). Secondly, more consumers are shifting to e-commerce; thirdly, corporate social

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

STARBUCKS CORPORATION 10 responsibility is on the rise. Thus, to remain relevant, Starbucks needs to be more socially responsible to the community in which it operates. 5.2 Recession and Increasing Production Costs Starbucks needs to respond to the recession created by COVID-19 and the increasing saving culture in the U.S. As the price of coffee beans becomes volatile and fluctuates frequently, Starbucks should enter future contracts with suppliers as a hedging strategy. 5.3 Increased Competition Starbucks faces stiff competition and pressure, especially on price positioning from MacDonalds, Costa Coffee, and Dunkin’s Donuts. Therefore, to prevent product imitation and competition, it should invest more in innovation and technology (Goh et al., 2020). The corporation should also expand to developing countries and rural areas that are underserved by the competitors and ensure it offers products for all income classes. 6.0 Marketing Objectives  To create an interactive customer experience: Starbucks aims at offering interactive and individual marketing to its customer through digital marketing. Since it is two-way communication, the buyer has a say on the information they receive regarding the desired products and services. Starbucks uses choice boards and collaborative filtering to zone its customers regarding their needs, preferences, behavior and buying intentions.  To grow its market share: The marketing strategy adopted by Starbucks intends to increase its market to suburban areas and developing countries in Asia and Africa. According to Yin (2022), the estimated number of Starbucks stores in China by 2021 is 5,000.

STARBUCKS CORPORATION 11  To increase brand awareness: To increase brand awareness, the corporation adopted strategies, such as social media marketing, giveaways, incidents such as wrong spelling on cups to capture customers’ attention, and standardized stores, products, and services to enhance customer experience. 6.1 Financial Objectives  To increase sales: Starbucks seeks to increase its sales volumes by, at least, 20% through its digital platforms, product differentiation, and expansion into emerging markets, (Yin, 2022). The new Shanghai Disneyland in Asia, for example, is estimated to be the highest- selling Starbucks store in the future.  To increase revenue: Starbucks seeks to increase its profits via augmented sales and market share through expansion strategies, advertisements, and reducing the cost of production. By introducing more products and gaining geographic coverage, Starbucks will increase its customer base and revenue.  To increase earnings per share: Through marketing, Starbucks intends to increase its return on investment. A higher return on investment means more profits are generated; thus, more value is created for shareholders. 7.0 Target Market Starbucks has adopted more than one target market. Given the high quality of coffee beans used in brewing the corporation’s coffee, it targets middle- and upper-class-income households, whose need for self-actualization makes them associate Starbucks’ high price with quality and acquire a sense of belonging to a higher social class. Additionally, Starbucks targets the working class, especially those in the technology field, law, and medicine, who often have a busy schedule. This population is educated; therefore, they are conscious of their health and what

STARBUCKS CORPORATION 12 they consume. Starbucks satisfies this need because it is a strong brand that is trusted to offer safe and quality products. 8.0 Positioning Strategy Product positioning is the place a company’s product occupies in the mind of its consumers. An effective positioning strategy gives a corporation’s product more importance in relation to that of the competitor. Starbucks has positioned itself as a high-end and high-quality coffeehouse. Starbuck wants consumers to perceive its products as high-end and of high quality. It also has highly trained employees who ensure personalized in-store experiences, such as coffee cups with customers’ names written on them. These measures have ensured the company maintains a strong brand name and competitive edge. Through differentiation, Starbucks products and services have become more competitive. The corporation also offers a warm environment to customers with WIFI and friendly services. This positioning strategy helps the company stay ahead of the competition. 9. 0 Marketing Mix The marketing mix is the set of strategies that Starbucks uses to achieve its marketing objectives. They include product, price, place, promotion, and people for service products. Product Starbucks has three major product lines. Beverages, such as Evolution Fresh, Teavana, Tazo tea, and Seattle’s Best, coffee for home, and coffee mugs (Starbucks, 2022). Despite the beverages generating substantial profits, coffee mugs have helped popularize the corporation’s brand worldwide. Starbucks has also introduced packaged coffee for customers who prefer to enjoy their coffee at home. Price

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

STARBUCKS CORPORATION 13 Starbucks’ espresso, tea, and coffee prices range from $1.85 and $5.25, whereas Frappuccino, refreshers, and iced coffee prices range from $1.75, and evolution fresh is sold at $5.95. Lastly, it offers snacks from $1.75 to $6.45 (Haskova, 2015). Starbucks uses a premium pricing strategy, captive pricing, and products, such as re-usable mugs, to increase customers’ spending. Place Starbucks has invested heavily in expansion. By 2022, it will have over 30,000 stores globally. Each and every store offers almost all the product mix in the corporation’s product line. Furthermore, it avails its products and services through coffeehouses, mobile applications, retailers, and partnerships with other brand retailers, such as Zomato and Swiggy in India. Promotion Promotion in the marketing mix includes sales promotion, public relations, advertising, and eCommerce in a bid to promote a company’s products and services. Promotion serves the important role of persuasion, informing, and reminding a firm’s target market of its products (V. Lombardi, T. Chidiac, & C. Record, 2021). Starbucks’ promotion mix includes offline and online advertising on Google and Facebook ads, sales promotion, marketing by word-of-mouth, social media, banners, and flyers. Existing and satisfied customers often refer others, which helps create a chain of new customers and word-of-mouth marketing.

STARBUCKS CORPORATION 14 10. 0 References Chuang, H. J. (2019). Starbucks in the world . HOLISTICA – Journal of Business and Public Administration, 10 (3), 99-110. https://sciendo.com/pdf/10.2478/hjbpa-2019-0031 Dimitrakaki, I. (2021). Strategic growth case study: Starbucks. Retrieved 11 April 2022, from https://www.scitcentral.com/documents/e2360bfdcf5ba728d481c0ee7783464f.pdf Haskova, K. (2015). Starbucks marketing analysis. CRIS - Bulletin of the Centre for Research and Interdisciplinary Study , 2015 (1), 11-29. doi: 10.1515/cris-2015-0002 Geereddy, N. Strategic analysis of Starbucks Corporation. Retrieved 11 April 2022, from https://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf Goh, S., Kee, D., Ooi, Q., Boo, J., Chen, P., Alosaimi, A., & Ghansal, M. (2020). Organizational culture at Starbucks. Journal of the Community Development in Asia , 3 (2), 28-34. doi:10.32535/jcda.v3i2.808 Starbucks. (2022). Starbucks mission and values - Starbucks stories. Retrieved 11 April 2022, from https://stories.starbucks.com/press/2015/starbucks-mission-and-values/ V. Lombardi, C., T. Chidiac, N., & C. Record, B. (2021). Starbucks coffee corporation’s marketing response to the COVID-19 pandemic. Innovative Marketing , 17 (2), 177-188. doi: 10.21511/im.17(2).2021.16 Yin, J. (2022). Starbucks marketing objective - Case study. Retrieved 12 April 2022, from https://www.essays24.com/essay/Starbucks-Marketing-Objective/73158.html

Marketing Plan Project Final

Related Documents