Answered: Who is winning the coffee war Starbucks…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Who is winning the coffee war Starbucks or Dunkin’ Donuts and why? Explain which growth strategies have been pursued by Starbucks and Dunkin’ Donuts in the past? Which strategies do you believe will be most successful for two firms in the future? Why? What new marketing concept will “you” implement towards market penetration if given the opportunity?

Transcribed Image Text:THE COFFEE WARS In the coffee and breakfast market, Starbucks vigorously competes with the likes of Dunkin' A Donuts and, more recently, McDonald's. Independent coffeehouses and smaller regional a chains, seen by many as more hip and less commercial, also continually nip at Starbucks' heels. However, the "coffee war" between Starbucks and Dunkin' Donuts is particularly Tenso fierce in the areas in which they compete head to head, even though each chain has its geo- graphic strongholds-Dunkin' in the East and Starbucks in the West.4 Part of the reason for this infamous battle might be the dominance of these two brands: Together, Starbucks and Dunkin' Donuts control well over half of the coffee market in the United States.65 Moreover, Starbucks can claim some victories over Dunkin' Donuts, considering that its net revenues and stock prices have risen continuously since 2009.66 By 2014, its global revenues had reached a record-setting $16.4 billion, and in 2015, its stock surged by more than 50 percent for the year.67 Starbucks' ubiquitous stores-from long-standing locations in U.S. cities and towns to international expansion into a vast range of new nations-are easy to locate and visit. A re- cent count showed that the chain maintains more than 22,000 stores, spanning 67 coun- tries.68 By making sure its stores, with their familiar siren logo, are easy to find, Starbucks Tango amplio enorme guarantees that most people can readily find a place to get their coffee fix. For the vast ma- jority of buyers, an addictive Salted Caramel Mocha, or just a great cup of black coffee, is convenient to find and very familiar. There are plenty of jokes about how Starbucks manages to charge upwards of $5 for a jce jolt of caffeine, but a quick glance at its marketing methods and strategies helps explain why it can do so. The products it sells are appealing to customers and fulfill their needs: They taste good, are available readily and conveniently, and offer the benefit of helping them wake up to start th 100K day (or stay awake for a long night of studying). Thus the exchange of money for coffee-or tea or juice or yogurt or a nice pastry-is a good value for consumers, despite the relatively high cost. Starbucks also connects with fans through social marketing channels, including its pop- ular My Starbucks Idea site. The site is an innovative approach to developing new products. Customers share ideas about everything "Starbucks," from store designs to new drink reci- pes. They can also join one of the many discussions in the customer forums. The site con- nects customers to its Twitter and Facebook sites too, and it also links users to its mobile

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Step 1

1.) It can clearly be comprehended that Starbucks is winning the coffee war as its net revenue and stock prices are continuously rising over the years. Its global revenue reached 16.4 billion in 2014 and stock surged more than 50 percent in 2015. They have an effective and efficient operation, for an instance, they are operating in 67 countries with 20000 outlets. Being the first mover in the market it created a loyal customer base in comparison to competitors like Dunkin donot. Another reason can the creative and innovative implementation of marketing strategies as a whole.

2.) Starbucks marketing strategies:

Easily recognizable, readable, easy to pronounce brand with an attractive logo to increase the brand recall.
Convenient and easy to grab coffee due to its availability of stores all around the cities.
It creates value for the product in the mind of customers through marketing its product as being a refreshing agent before going to work even being relatively costly.
Connecting to customers through social media and taking suggestions, ideas, products, and feedback from the customers. Basically, they are indulging customers in the decision making of the company management indirectly.
Application for pre-ordering the product or drinks so that customers can pop in the store and grab it when it on the way, without standing in the queue.

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