Marketing Analysis : Starbucks Coffee

As the world’s number one specialty coffee retailer, Starbucks sells coffee drinks, food items, coffee beans, and coffee-related accessories and equipment. In addition, Starbucks sells whole-bean coffees through a specialty sales group and grocery stores. Starbucks has grown beyond coffee into related businesses such as coffee-flavoured ice cream and ready-to-drink coffee beverages. The purpose of this paper is to analyze Starbucks business strategy, customer value proposition, company’s operations and the risks to financial results and reporting in the short term.

Starbucks Corporation, generally known, as Starbucks Coffee is the leading retailer and a brand of world’s forte coffee in the world, with more than 15,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim, wherever in this world where premium quality coffee is in demand. Starbucks is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with 20737 stores in 63 countries and territories, including 11910 in the United States, 1496 in China, 1442 in Canada, 1052 in Japan and 772 in the United Kingdom. The first Starbucks was open in 1970. The name was inspired from Herman Melville’s Moby Dick, a definitive American novel regarding the 19th century whaling industry. The nautical name matches seamlessly for a store that imports the world’s finest coffees to the cold thirsty people of Seattle. In May 1998, Starbucks have finally successfully entered the European market through its acquirement of 65 Coffee Company stores initially originated from Seattle in the UK. Both companies shared a common culture, focusing on a great commitment to customized coffee, similar company values and a mutual respect.

Starbucks is no doubt a phenomenon in the United States, but the brand wants to expand globally. Opening chains in various global locations such as Japan, Vienna, England; Starbucks wants to reach out to the coffee loving fans everywhere. Nevertheless opening chains globally is not that simple. There are many uncontrollable factors Starbucks need to focus on to make sure they are making profit as well has abiding by the country’s laws and regulations. Going global takes a lot of market research to make sure that the brand will be successful even with uncontrollable factors. Controllable factors can be tailored to fit the needs of each country. Starbucks has to find the happy medium so they don’t lose their identity overseas.

Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?

In addition, due to the higher price, it completely cut off the low consumer groups, which improve its environment level. Moreover, owing to the brand personality of “the third life space”, Starbucks focus more on its service instead of the product. And the article says that the Starbucks require its operators to identify with the idea and the brand of the corporation, and also emphasizes the consistency of the operation, discipline and quality (Guang, 2011). Lastly, Starbucks has a unique promotion idea according to the article, which says that it thinks in service industry, the most important marketing channel is the branch store itself, not the advertisement (Guang, 2011). Therefore, Starbucks does not spend lots of money on advertising, instead, it persist in training its employees to be knowledgeable and enthusiastic, which has become a unique feature of Starbucks’ promotion.

Coffee has been a subject of research in recent times given the evolving number of alternative beverages that are there in the market today. As history suggest, coffee was first discovered in Africa as a hot beverage in the 11th century and since then it has become the preferred beverage of choice for many. As such, it has become a global industry that provides massive employment to millions of people worldwide. In fact, if the recent statistics of more than 400 billion cups being consumed globally are anything to go by, then coffee can be rated among the most popular beverages globally (Simon 2009). It is because of this demand that saw the formation of a major corporation in the coffee industry. Such corporations are inclusive of

High pricing from the competitors create a pricing war by driving down the profit margins when increasing the market share.

Starbucks has arranged abilities which can be acknowledged as far as the accompanying i.e. position, many stores, advertise headship and inventory network operations. It might be taken into consideration that, Starbucks has been acknowledging a most elevated piece of the overall industry in a condition of the espresso advertise. Starbucks has been setting inclinations by serving its clients with various varieties of espresso, for example, Frappuccino line for Starbucks, and so forth. The spots at which Starbucks are found convey them viable cheap cheap advantage as likened to the immediate players

It present that, Starbucks target customer are the people around 18 – 40 years old, young and adults, no matter male and female. Include the college students, persons in managerial, executive, and professional positions. To the simple, those person are live in the middle and higher income earners. Also, they are lifestyle are pursue brand, high quality life and enjoy the life.(Source: Colombo Page News Desk, Sri Lanka.)

In the coffee industry, the three retailers, Dunkin’ Donuts, Intelligentsia, and Starbucks, all have their own unique style to attract consumers. To better understand and observe the elements of coffee retailers, we selected two locations from each retailer to perform our research. First, we collected menus to determine the products, depth of assortment, and product

In making the decision to close a number of outlets in the United States, there were several factors that played into Starbucks' decision. These included the performance of the stores in question, and the company's expectations for the state of the US economy going forward. The long term plan for the company also played a significant role in the downsizing that the company went through.

Under today’s ever-changing market, strategic marketing planning has become more and more significant whether of the functional or the fundamental. Especially, although financial crisis leaded economy growth slowdown, it did not cause a serious influence for chain coffee shop. As Howard Schultz said, CEO of Starbucks, “I don't think we had a business plan for the severity of what has taken place. History demonstrated to us that a downturn in the economy would not affect us, and in fact, we would be recession-proof.” (Katie Couric, 2008) Based on Financial Times, Starbucks revealed that strong earnings of $242m of 2008, a jump from the $64m it recorded during the comparable period last year and total revenues for the quarter

Starbucks is a Coffee Company that is successfully renowned throughout the corners of the world. It has successfully won a great amount of loyal customers regardless of its high priced, coffee. Many investors are also interested in this business as they see Starbucks as a moneymaking investment. Starbucks is popular for its high priced and high quality coffee with an ambient of comfortable sofas and delightful music. It has advertised and promoted itself as the “Third Place” that means a place where people can visit beside their homes and jobs (Starbucks: A Strategic Change and Management Perspective, 2014).

Starbucks is the best example to show any business marketing strategies have done successfully because it is one of the biggest companies over the world. Becoming the biggest business happened quickly with exceeding expectation. The case of Starbucks informs how Howard Schultz, CEO of Starbucks, can make his business from domestic to overseas and presents several key strategies which are external, such as location, customers, and reputation and are internal, such are product mix and employees. First of all, Starbucks has to concern places that when and where customers want coffee because it involves all the business activities with storing and transporting its products, so it can serve customers efficiently. For example, the original Starbucks store is still located in Pike Place, Seattle because it is a tourist attraction, so he tested opening in Chicago because it is the main location of Midwest culture and considered floating population near retail store, so it can have a potential growth broadening out the national brand as his dream. Later, he could expand his company to Los Angeles; fortunately because the Los Angeles Times introduced Starbucks as the best coffee shop. Therefore, Starbucks became the symbol of the best coffee shops in America. Next, it values customers’ experiences and connection, so Schultz does target to two generations, which are old and young, in order to connect and satisfy both of

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