Starbucks Marketing Macro Environment Essay

* Interest rates – An increase in interest rates in the USA would result in plans for investment and expansion being deterred by the Starbucks resulting in decreased productivity of the company. Furthermore, increased expenses for the consumers such as rising mortgage repayments would result in decreased availability of income to spend on luxurious products such as coffee. Low interest rates should have the

The survey questions mostly consisted of multiple choice questions, two open-ended questions, allowing written responses, and one qualitative response question. These questions were chosen to establish consumers differences and comparative perspective of Starbuck’s competitors, their daily usage of the social media platforms, the coffee shops visited frequently, and their opinions on consumers who frequent Starbucks. The survey contains one matrix/rating scale question ( Appendix I, Question 5) based on how important qualities are when choosing a coffee shop. Lastly, there were two demographic questions. The demographic questions are for a general understanding on consumers behavior based on age group and gender. For an overview of the survey, see appendix I.

Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world with over 16,000 stores in 50 countries. This report evaluates major internal and external factors affecting Starbucks using various analytical techniques. Based on the Starbucks brand in UK, it identifies suitable marketing strategies for Starbucks to expand its business in the UK market within the next two years. In line with the chosen marketing strategies, recommendations for the marketing mix are discussed.

Starbucks operates in 65 countries offering specialty coffee, tea, and food items to patrons through company-operated stores (Starbucks Corporation, 2014). Moreover, Starbucks sells trademarked items such as coffee grounds and pre-packaged drinks through grocery stores and similar channels (2014). In 2014, there were 21,366 stores globally (14,191 in America) (2014).

The determinants of Starbucks profitability over time are variable costs and fixed costs. “A variable cost is a cost that change in direct proportion to a change in the level of activity (dict). Variable costs for Starbucks would include labor, coffee beans, dairy, and plastic products. A fixed cost is indirect costs of business expenses that remain unchanged (dict). Fixed costs for Starbucks include rent, taxes, and insurance as well as advertising. In the figure below (fig 1) we have Starbucks financial data in millions for the year of 2015. This includes their operating expenses, net revenues, such as company-operated stores, licensed stores, CPG, food service. It also includes their total net revenues and their balance sheet. As we can see “Operating costs dropped in the fiscal year

starbucks Corp., an international coffee and coffeehouse chain based in Seattle, Washington, has expanded rapidly since its opening in 1971. These outrageous success was due to its well-developed strategy vision which lay out the company's strategic course in developing and strengthening its business. Starbucks is a global corporation that sells authentic coffee in 30 countries, reporting revenues of nearly $5.1 billion in 2006. The main goal of Starbucks is to embrace diversity by applying the highest standards of excellence. Starbucks strives to perfect the relationship with the working class by making the service as fast as possible because they believe that every customer has their own personal rate. One

Starbucks will be the first come in your mind when you want to have a cup of coffee. Don’t you feel curious about why is Starbucks so successful? This report explains how Starbucks take advantage in consumer purchase decision making process, how does Starbucks attract customer, how does Starbucks segment its market and new trends in society affect purchasing process.

The baby boomer generation is retiring. This means spending by older consumers will decrease. Now, Starbucks will have to tap the Gen X and the Millennials as customers.

Starbucks is known for their Frappuccino’s; unfortunately they are on a downward spiral in sales due to competitors such as McDonalds. In 2008 Starbucks admits to its losses due to their competitors. “Company executives now freely admit that such thinking is largely to blame for the woes that led to Tuesday’s announcement that Starbucks will close 600 U.S. stores and eliminate thousands of jobs. The coffee giant’s missteps have come at a spectacularly bad time, hitting as the economic slump deepens and consumers are seeing their discretionary spending eaten up by rising gas prices and grocery bills (Linn).”

I think Starbucks certainly is a force for globalization, and already is, with presence not just in North America but Canada, Japan, Britain, Thailand, etc and not just because it offers a product (coffee) that is known and sold around the world very well, so it is easier to reach customers because people are familiar with drinking coffee, as a part of the daily basis, and plus the idea of a coffeehouse, a place to go and spend some time with friends, or studying, or even for business meetings is also a hit in a lot of cultures, these are regular activities for a good amount of people, so the market is there, the coffee culture is already there too, Starbucks will have to analyze other type of situations like competitors, or purchasing power of the specific country to determine if

McDonald’s, in addition to several other fast food vendors like Burger King, Dunkin’ Donuts, Panera Bread and independent coffee houses remain Starbuck’s toughest competition (Adamy). McDonald’s began introducing its espresso beverage products in 2001, and offers its product at a price between two and three dollars to compete with Starbucks between three and four dollars a cup coffee (Adamy). Similarly, Dunkin’ Donuts has recently implemented a plan to expand nationally (Adamy). On average, Dunkin’ Donuts coffee products cost approximately 20 percent less than Starbucks’ (Ball and Leung). In response, Starbucks has announced recent

A review of the estimated growth in retail sales of coffee over the next four years indicates that while sales of non-specialty coffee products are expected to decline, sales of ground specialty coffee products and whole bean coffee should rise. Further, sales of ready-to-drink products are projected to rise almost 50%.

Starbuck’s strategy focused on three components; high-quality coffee, intimate service, and ambient atmosphere. Starbucks worked closely with growers in Africa, South and Central America, and Asia-Pacific regions to insure the quality of its product. Starbucks called all employees' "partners" and worked hard to train them with the skills necessary to best serve the customer. The atmosphere at Starbucks was crafted after the European-style espresso bar. The company goal was to create ambience through the Starbucks "experience" and by making the area comfortable, yet upscale.

In terms of competition and the forces, which could limit the success of Starbucks it is important they stay ahead or even with other companies concerning innovative products. Many more micro companies are coming up with new products with a similar quality and a lower price/cost. It is important that Starbucks continues to search for innovative products to continually satisfy their customers. At the same time “rivalry” amongst Starbucks and smaller providers of coffee will continue to increase as the demand for coffee continues. The buyers bargaining power is significant as they can determine the cost, type of product, quantity and ultimately

The greatest threat of them all at this particular moment for Starbucks, or any other company for that matter, is the global economy crisis. In particular the source of the crisis, this lays in its home country the U.S. So if more than ¾ of the companies growth is depended on the U.S. then the