Case Study : Starbucks 's Marketing Strategy

In the north, Starbucks entered a joint-venture with Beijing Mei Da coffee company. In the east, Starbucks partnered with the Taiwan-based Uni-President. In the south, Starbucks worked with Hong Kong-based Maxim’s Caterers. Each partner brings different strengths and local expertise that helped Starbucks gain insights into the tastes and preferences of local Chinese consumers.

The objective of this case study is to analyze why Starbucks was not meeting expectations in terms of customer satisfaction thereby losing customer loyalty. Whether or not to invest millions of dollars ($ 40 million) in each store to enhance the labor. How will it impact the sales and profitability if invested? Product mix and marketing approach will also be recommended in this paper.

Starbucks has a challenging, great thoroughly considered conveyance process because of the astounding conveyances every day, yet they are still ready to supply every single story with the adequate amount of coffee with about 70,000 outbound deliveries to the Starbucks stores week by week.

Starbucks had a very tight value proposition that matched the needs of the well conceptualized target customer base. Its mantra was ‘Live Coffee’. Their unique value proposition was based on three elements, premium coffee, the right ambience and best service. Starbucks claimed its coffee quality to be the best in the world. A lot of their revenue came from the sale of whole beans. They strived to get a perfect ambience. The labors were trained on honing their soft and hard skills to provide “Customer Intimacy”.

Proper implementation and execution of a strategic marketing plan is essential to the success of any company.

Millions of people enjoy refreshing cups of coffee regularly served from Starbucks outlets worldwide. The company commands a large following and is a preferred brand of choice for myriad individuals globally. The business runs successful regional outlets through engaging exemplary customer relationship models in managing customer relations and brand image. At Starbucks, there is an upbeat enabling environment that incorporates helpful and friendly staff who are well trained in handling customer needs, concerns or problems with their coffee or services. According to Michelli (2007), the current company structure is founded upon various business models that support the continuous management of company principles and enable elaborate organizational structure. Starbucks’ Vision Statement is to become America’s “Third Place” of choice to complement work and home. In addition, its goal is to establish the company as “the most recognized and respected brand in the world.” Moreover, it surges its marketing objective in commodities which significantly include coffee, service and the atmosphere (Meyer and Schwager, 2007).

In assessing Starbucks Social responsibility strategy, one would have to look at certain key elements of the strategy and what makes it a good strategy, a great strategy or even a poor strategy. One would have to ask question such as;

Successful companies are companies that have a plan for where they are going, and where they want to be in the future. To successfully create this plan, companies need to examine themselves, along with their competitors, to see what areas need to be strengthened and what can be utilized to do so. Some of the main components of this analyzation are identifying what the major issues in the companies that are threats or are causing that weakness. They then need to create long term objectives, and quantify how to accomplish them-- whether they be financial or strategic. Starbucks as a company has three key issues: increased competition from new and/or expanding restaurants and coffee shops, they are less popular overseas, and there are many consumers who boycott Starbucks because it is such a mainstream prevalent brand.

Starbucks which from small businesses to todays global cafe, has managed to become one of the best coffee chain and suppliers in the world. As early as in 1971, three friends (Jerry, ZEV and Gordon) sell fresh coffee beans and accessories in Seattle are the idea of passion. Things started to change; Schultz wanted to sit environment friendly coffee service development the business. Schultz provides coffee spread the idea of sitting together in a culture, and since that time, Starbucks is in a fast way to start a unique development way. According to survey that Starbucks has 16706 stores in more than 50 countries around the world also has 8850 companies to operate 7856 licensed stores. (Starbucks material, 2010). People want to drink a cup of coffee at Starbucks and they real want a place to have a rest, relaxed and talk. For the generation Y, they want to talk and drink coffee with Wi-Fi and friends. Additionally, that is what Starbucks is trying to create in the near future: coffee and the newspaper, a hyper local niche sites nationwide Wi-Fi. (Stefanie, 2010) Meanwhile, Stabucks’s Products are not only is the coffee but also is a kind of carrier. In addition, Starbucks want to send customers a unique style by the carrier coffee. Coffee consumption is a largely cultural consumption level, cultural communication need coffee shop to help people feel the culture of Starbucks and infect customers by this unique cultural and let the customer enjoy the

most coffee drinkers because it is where most of the educated professionals are located as

can order and pay for their drinks in a flash while stacking up rewards for each purchase made. This Strategy has significantly drawn people to Starbucks due to its highly anticipated services, products, and marketing strategies that differ from most fast food restaurants. The next service is the Starbucks webpage where the customers can go onto the site and view product and also make purchases. This service is quite excellent for those that want to checkout items online through the site, because it incorporates a similar process as the application on your smartphone. Starbucks also incorporates equipment and drinkware to their massive line of products. First their Drinkware consists of cups and mugs that are affordable to the customers. These cups come in many colors and aesthetic values, which make people interested in purchasing. Starbucks had the right idea when they decided to manufacture these cups out to their customers because not only were they a huge success for the business, but it also made Starbucks distribute more merchandise. Cold cups, which were from stainless steel containers. These containers made a rise once the popularity rose for other merchandise. These containers were sold very often to customers and once again made a surprise since it was from the same line of cups and mugs category. As more popularity grew in their products so did the equipment used to make customers coffee. First Starbucks decided to manufacture coffee makers, presses, and expresso

Starbucks has been very successful in implementing the “Starbucks Experience” both in the United States and in Turkey. Inspired by his visit to Italy, Howard Schultz CEO, was charmed by the social glamour of drinking coffee by the cup. Schultz sough to differentiate Starbucks from the rest of specialty coffee stores and pitched his inspiration to the three original owners, Jerry Baldwin, Zev Siegel and Gordon Bowker. The owners of Starbucks were not fond of expanding the business to what they considered was restaurant business. As such, Schultz ventured on his own to launch his new idea of innovating coffee with success. In 1987, the owners folded their business pursuits with Starbucks and sold all assets and name brand to the visionary Schultz. Starbuck grew rapidly after Schultz purchased it, it went form 11 stores in 1987, to over 900 stores in 1996, and to 6,793 stores by 2007 in North American only. Starbucks Turkey opened in 2003. It was located in one of the busiest and prominent streets in Istanbul where the most affluent citizens roamed. Within five years they were the most rapidly expanding coffeehouse chain in Turkey. By 2008 there were 105 stores in 8 cities serving approximately 30,000 customers per week. Starbucks Turkey was successful due to its consumer, marketing and entry strategies for growth it implemented.

The Indian coffee is said to offer a subtle balance of refinement and stimulation. Just light and not too acidic, these coffees exude a distinct full-bodied taste and a fine bouquet. It has a rich cultural flavour too.

“The marketing mix is the set of tactical marketing tools that the firm blends to produce the response it wants in the target market. It consists of everything the firm can do to influence the demand for its products” (Kotler et al., 2013, p.53). Its main characteristics can be categorised into a 4Ps framework.

Companies are continuously translating their policies according to the rules and regulations of each country that they operate in. For instance, American company Starbucks which is coffee house chain, which is producing goods like; coffee, beverages, tea, smoothies, and baking goods. Jerry Baldwin founded Starbucks. Starbucks revenue is$16.447 billion. Starbucks continues its legacy as a global brand, but prior to launching stores of Starbucks in new countries, the purpose of any organization is to increase its profits and sales through satisfying the needs of its consumers. The escalating change in technology drastically affects the businesses of many organizations. Due to stiff and cutthroat competition, the companies that did not enhance their business functions with the rapid change in technology may be easily wiped-out from the market. Localization is the process of modifying the features of the product according to the language, culture and taste of the desired population. This strategy is also known as adaption strategy. The concept of globalization has originated from the word “Global” in which, people from different social, cultural and economical backgrounds live together. During globalization national boundaries are reduced, which results in a larger customer base for companies and hence, an increased revenue and profits. The marketing strategy of an organization is a comprehensive plan that encompasses overall market goals. A good marketing strategy can be