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CompanyStarbucksMarketingReport

Producedby

Names

StudentNumber:9Name:Grace

StudentNumber:1Name:Ann

StudentNumber:2Name:Tom

StudentNumber:8Name:Serena

Reportdate:2014/12/10

StudentNumber:16Name:Anna

Group:GraceDate:December10,2014

Executivesummary

ThepurposeofthisreportwastoidentifyasuitableforStartbuckstointrodoatargetmarket.Aspartofthisprocessastrategicanalysiswasconductedtotheenvironment.Strategiesthatmitigatedthreatsandweaknessandonesthattookofthesestrategiesasuitablenewproduct

wasthendeveloped.

TheboomingofChineseeconomynourishesabroadcoffeeconsumptionmarket.Againstthismacroeconomicbackground,StarbucksputstheChinesemarketintothefirstplaceofitsoverseasmarketexceptAmericanmarket.StarbuckshasmadegreatbusinessachievementinChinesemarket,whileitisalsochallengedbythedevaluationofStartbucks’brandandthedowngradeofitscorecompetitiveness。basedonthebackground,productandenvironmentanalysisandstrategymaking,analysesonmanyrelatedliteratures,thispaperresearchedontheStartbucks’marketingstrategies,analysesStartbucks’operatingenvironmentbothinternallyandexternallyandsummarizesthemarketingstrategiesofStarbucksinchina。

Thereportwasbasedoninformationfromarangeofdatasources,includingStarbucks’websitesandthemagazinesaboutthiscompany

Group:GraceDate:December10,2014

TableofContents

Introduction……………………5

CompanyBackground…………6

Aboutthecompany………..6

History…………………。6

Mission…………………..7

Values……………………7

2。2Products………。8

TargetMarkets/MarketSegments……。.。8

Marketshare……………。.8Majorcompetitors………。9

Table1:directcompetitortoStarbucks…。.10

3.EnvironmentalAnalysis………。..11

External.…………………11

PEST/PESTL……….。.11

CompetitiveForces…………………。12

ExternalOpportunitiesandThreats…14

InternalAnalysis………。..15

IdentificationofSWOTelements…。。.15

EvaluationofSWOTelements………17

AnalyzeandRank………。..…………18

Strategies……………….。19

Strategiesdevelopment……………。.19

Identifystrategicfit…………………20

Table2:SWOT/StrategiesMatrix….。21

ProductDevelopment…………。21

StrategySelection……….21

ProductSelection……..…23

Ideageneration………23

MarketingStrategy……………。...。..。。.25

4.2。2.1Demographic…………….。.…。26

Conclusion……………。。………26

Reference……………….。.……。27

Appendix………28

Ideageneration…………。28

TeamReport…………….28

7.2。1IndividualMemberActivityReport…。……………。28

1Introduction

‘Wearenotinthecoffeebusiness,servingpeople。weareinthepeoplebusiness,servingcoffee’’.ThatisthephilosophyofHowardSchultz,chairmanandchiefglobalstrategiesofStarbucks.Itisaphilosophythathasshaped—andcontinuestoshape—thecompany。Withover11000outletsinmorethan36countries,Starbucksistheworld’snumberonespecialtycoffeeretailer.Inordertounderstandthecompanycomprehensively,wearegoingtotakeanin—depthlookatStarbucksthroughthistopics。

ThisreportwilldiscussthemarketingstrategybeingimplementedbyStarbucks,andwillevaluatethecompany’scurrentmarketingplan,includingtheproducts,externalandinternalenvironmental,productdevelopment,strategiesandvariousotherfactorsthataffectitsstrategy.

2CompanyBackground

2。1.Aboutthecompany

2.1。1History

Foundedin1971withtheopeningofthe1stlocationinSeattle'sPikePlaceMarketsellingcoffeebeansonly

HowardSchultzjoinedStarbucksin1982asdirectorofretailoperationsandmarketing

Schultzpurchasedthecompanyin1987andStarbucksCoffeeCompanyopenedthefirststoretosellbrewcoffeeandespressobeverages

CompletedIPOonNASDAQin1992underthetradingsymbol“SBUX”,thusopeninganewchapterofgrowthforthecompany

Currentlyoperatingin39countriesaroundtheworldwithmorethan13,000storesandover145,000partners(employees)

AsofNovember2014,Starbucksispresentin67countriesandterritories

2.1.2Mission

Starbuckshasamissionstatementofstructuringapleasantworkenvironmentinwhichemployeesaretreatedwithrespectanddignity,incorporatingdiversityinallitsbusinessaspectstodeliverfreshcoffee,satisfyingcustomers,anddevelopingprofitabilityforthecompany’ssuccess

Values

Starbucks’snetearningsin2011were$417。80million,whichisasignificantincreasefrom124.570million,Furthermore,itsrevenuesgrowfrom$10。383billionin2008to$11.7billionin2011.Theincreasei

nrevenueandsaleswasdirectresultofthenumerousnewstoresthatwereopened.DuringthisperiodStarbucksstoresgrow508percentfrom8400storestoover12000across39countries。Now,Starbuckshavemorethan13000storesand145000employees。Anduntil2013,saleshadincreaseto$14。982billion

Product

2.2.1TargetMarket

ThetargetmarketofStarbuckinchinaislocatedinsuper-largecitylevel,andeconomicallydevelopedcoastalareasandrelativelydevelopedcityofsecondarycitieswithhighecation,theuppermiddleclasswithhigherincomeorrandomconsumerandcoffeelovers,thispartofthepopulationbelongstothepursuitofqualitysocialupperclassandthepursuitofsocialfashionofsocialmiddleclass。Starbuckstargetmarketisamiddleclassasthemainstreamofsocialclass.Starbucksistheimplementationofdifferentiatedmarketingstrategy;provideagreatdiversityofproductsandservicesforthedifferentcubmarket.Starbucksimplementedthestrategyofthesedifferencesoftargetmarketfordifferentmarketsegmentstocustomizedifferentproductsandservices,andtodevelopdifferentmarketingstrategies,tomeetdifferentconsumerneeds,bettertoexpandsales。

2。2.2MarketShare

Starbuckisthefifthlargestconsumerfoodservicebrandintheworld。Starbuckopensthreenewstoreseverysingleday。Now15,269outletsofStarbuckoperated,AsofNovember2014,Starbucksispresentin67countriesandterritories.However,61ofits84locationswereclosedinAustralia2008.Besides,thetrafficvolumeandsalesiscontinuallydecreasingrecently.Therefore,itisvitaltoexaminethereasonsfordecliningmarketshare,andtoofferapproachtoimprovethemarketperformanceandincreaseitsmarketshare.

2.2。3MajorCompetitors

Starbucksbelongstomarketfollower,facingthecompetitioncanbedividedintofourcategories.

Coffeecompetition:suchas,Dietrich’scoffee,Pete’scoffee,andCaribouCoffeecompany。Thepany'sproductissimilartoStarbuckandthepriceandqualitiesarealsosame。

Conveniencestorecompetition:thesetypeofcoffeestorearemoreattractivethanStarbucksforthecustomerswhoareincollegeandofficeworker。DuetothesestoreyoucanfindineverycornerofstreetandthecostforthesestorestoopenislowerthanStarbuck.

Fastfoodrestaurantssellcoffee:suchasMcDonalds,KFC,PizzaHutandDunkinDonuts.Thesefastfoodcompanyaremorecommonineverycity。Inaddition,thesestores’coffeearemorecheaperthanStarbuckandtheycanprovidemanykindsoffoodanddrinks.

Fixedcoffeemachine:thiswaytoshellcoffeecansavecostofemployeesandstorerent.Forthecustomer,itismoreconvenientandquick,alsothepriceischeaperthanthecoffeearesoldincoffeeshop。

2。2.4Table1:directcompetitortoStarbucks

Firm

Productline

Breadth

Revenues(2010)

inMillions

%ofTotalGroup

Revenues

Starbucks

High

10,707

27%

DunkinDonuts

Moderate

5,500

14%

McDonald’s

Moderate

2,400

6%

GreenMountainCoffeeRoasters

Low

803

2%

KraftFoods,Inc.

Low

3,100

8%

NestleS.A.

Low

17,700

44%

3EnvironmentalAnalysis

3.1.1PEST

3。1.1.1Polity:TherelationshipbetweenChinaandAmericanhasimproved,thustheprospectofdevelopmentbetweentwocountriesisvisible.TheChinesepolicyalsoprovideawidemarketforStarbucks.

3.1。1。2Economic:theresidencesconsumptionlevelisincreasinginChinawhichprovideawidemarketforStarbucks。Alsowiththeimproveofcitizenssalary,Chinesepurchasingpowergraduallyincreased,acupof$3coffeeisnotaluxuryanymore。

3.1。1。3Social:ChinesecultureaffectsChineseactionandthought.Moreover,theStarbuckscorevalueisalsoemphasizekindnessbringpeoplealot。So,italsoadvocateenvironmentisthesameimportantascoffee

3.1.1。4Technology:StarbucksholdadvancedcoffeebakeskillwhichappealedChineseattractionmodeastabletechnologyfoundation。Besides,viatheinternetadvertiseitscanspreadtheircoffeeculture.

3.1。2CompetitiveForces

3。1。2.1Customs:

Starbucksinitiallytargetedyoungstudent,socialclassesandneighborhoodsthatwouldbemostreparativetotheideaofbuying$3acupofcoffeeandspendingtimewithfriendsattheirstores。Withrapidgrowthandexpansion,Starbuckstargetmarketexpandedrapidlytoincludeeveryindividualofeveryage.Starbuckscanprovidecustomers'acomfortablereleaseplacewhichtheycanreading,thinking,writing,orevenadaze。Thecoffeegiantachievedtheseusingcreaturecomforts,suchascomfortablefurniture,wirelessinternetrelaxingmusicandcommonareaforcollaboration。WhileStarbucksstoresarepositionedaslocationswherecustomerscanspendtimeinacomfortablesetting,theirproductlinesarepositionedatthehigherinregardstopricesandquality

3。1.2。2Supplies

ThemajorsupplierstotheindustryarecountriesfromAfrica,SouthAmerica,andAsia。Thisisduetothefactthattealeavesandcoffeebeansmustbegrowinacertainclimate。Assuch,manyofthesesupplyingregionsarelowereconomiccountries.Coffeebeansareacommodityproductandcoffeepricesaredictatedbysupplyanddemand。Thepowerofsuppliesisalsodeemedtobemoderate

3.1.2。3NewEntrants

As

for

the

threat

of

new

entrants,

it

will

be

discussed

from

three

aspects。

Firstly,

differentiation

and

innovation

are

the

important

elements

in

the

specialty

coffee

industry。

In

this

saturated

industry,

it

is

hard

for

new

entrants

todifferentiatefromexistingcompetitorsbyjustprovidingbetterquality,customerservicesanddifferentstylesoftheretailstores.Itlowersthethreatofnewentreant.Additionally,

brand

loyalty

is

also

significant

barrier

to

new

entrants.

Many

companies

like

Starbucks

has

gained

many

loyal

customersby

providing

excellent

experience

and

services

through

these

years。

All

these

points

have

made

it

difficult

for

new

entrants

to

enter

into

this

industry。

Therefore,

the

threat

of

new

entrants

is

moderate.

3.1.2.4Substitution

ThemajorsubstitutionofStarbucksmustbemilkytea,juiceetc,

However,Starbuckshasits’uniquecompetitiveadvantages.Firstly,thecomfortableenvironmentthatStarbuckssuppliestocustomerisdifficultforthosejuiceormilkyteastoretooffer.Theseshopareusuallynarrowandcapacityissmall.Secondly,thosejuicekyteashophavealowawarenessofproductbrand,anddon’thaveacompletebrandsystem.WhileStarbucksarewell—knownallovertheworldandhasaprofoundbrandmarketing.Innutshellthethreatofsubstitutesisconsiderbeingveryweakinthisindustry.

3。1.2。5Rivalry

InChina,themajorcompetitorsareTaiwanShangDaocoffee,Japanreallypotofcoffee,PacificCoffeeandothercoffeelaterintoChina,Starbuckscoffeeamongallasitsbiggestcompetitor,“coffeewars”royaltieshavebecomeinevitable.

Starbucksmissionstatementis“EstablishStarbucksasthepremierpurveyorofthefinestcoffeeintheworld。”Thethreatofsubstitutesisconsidertobeveryweakinthisindustry。Facingwiththecompetitionfromthecoffeeindustry,theconveniencestore,fastfoodrestaurantsandcoffeemachine,Starbuckshavealongwaytogointhefuture.

3。1。3ExternalOpportunitiesandThreats

Opportunities:

StarbuckshaspreviouslyoccupytheChinesecoffeemarkets,itiscanassistcompanytoextendtheirmarketeasier,andStarbuckshassetitssightsontheonebillionplusChineseteadrinkers,andlookstochangepreferencestogourmetcoffeebeverages.

Thecompanyhastheopportunitytoexpanditsglobaloperation.NewmarketsforcoffeesuchasIndiaandthePacificRimnationsarebeinginngtoemerge

C0-brandingwithothermanufacturesoffoodanddrink,andbrandfranchisingtomanufacturesofothergoodsandservicesbothhavepotential.

Threats

1Starbucks’successhasleadtothemarketentrymanpetitorsandcopycatbrandsthatcouldposepotentialthreats.Howtheycombatthesethreatswilldeterminetheirfuture.

2Starbuckisexposedtoriseinthecostofcoffeeanddairyproducts

3.2InternalAnalysis

3。2.1IdentificationofSWOTelements

(1)Strength:1:Itisfamousforhighqualitycoffeebeansandgoodtaste

2:Itcooperateswiththeteacultureandcoffeeculture

3:Itprovidesaelegantenvironment,goodservice,andfavorableprice。

(2)Weakness:1theorganizationstructure’sefficiencyisnotenough。

2thepressuresonsupplychain

3experienceandservicelevelisdecrease

4pricesishigh

(3)Opportunity:1thevacancyofmarketingentrance

2thechancesofthistimebackground

3thepotentialofcoffeemarketinChinaisvisional

(4)Threat:1toomanycompetitions

2substitutegoodsareabundantandpromoteincreasingly

3theriseofmaterialcost

4regionaldevelopmentsimbalanced

5thefinancialstormimpact

(5)SO:1theexpansionstrategyofmarketoccupancy

2brandextension

(6)ST:1differentiationstrategy

2publicrelationsstrategy

3raisetheprice

4flexiblepricesystems

(7)WO:1directsalesstrategy

2brandcrisesreversestrategy

3differentiationstrategy

(8)WT:1productlineshrinksstrategy

2turndowntheunprofitableordeflectstone

3lookingformuchlowerpricessupplier

3.2.2EvaluationofSWOTelement

TheSWOTanalysisthatStarbucksisapanywithacompetitiveadvantagethatisshrinkingbecauseofhugesuccess.ThisisbecauseStarbucksmodelhasbeencopiedsuccessfullybyitscompetitorsandthisposesseriousthreattocompany。

WithmajorityofstoresconcentratedinUSA,Starbucksisalsolimitingitsgrowthandexposingitselftorisk。IfStarbuckscanretainitsstrengthandbuildonopportunities,whilesuppressingweaknessandextinguishthreats,itwillbeabletogrowthroughouttheworldmarket。

TheSWOTanalysisalsogivesastartingpointfordiscussiononwhatStarbuckscandotoreduceitsweakness.Duetoitslargesize,Starbuckssetstrendsfortheindustrythatcanbebackedupbythevolumeoftheirdelivery。

Thecompanyhasmanagedtomaintainthpetitiveadvantagesbecauseithasofferedconveniencesanatmospherecustomerscanenjoy。AslongasStarbucksfulfilsitscustomer'swantsandneeds,Starbuckswillcontinuetocreatemorevalueatitsstores.

3。2.3AnalyzeandRank

ThroughanalyzetheSWOTofStarbucks,wecanfindthatthestrengthofStarbucksarethespecialcomfortableenvironment,theuniquecoffee,andthebrandadvantages。Also,withthedevelopmentofeconomy,theopportunitiesforStarbucksareincreased,duetoithasalreadybeknownbythewholeworld,itmaybeeasierforStarbuckstoopenanewmarketinallofworld

IntermsofthreatandweaknessforStarbucks,thefirstthingneedtobeconsideredisthehowtoattractmorecustomers。Starbucks’targetcustomersinChinaaretheup-middle-classes,whoareaffluentandattachgreatimportanttoqualityoflife.HowtoattractotherclasspeoplemaybecomeaproblemforStarbucks’development。

Inaddition,expectcoffeetherearemanyotductwhicharesellinStarbucks,theseproductarenotfamiliarwithpeople,shouldStarbucksonlyfuscousoncoffee?Ordevelopmentallproductstheyhave.

Thirdly,moreandmorecoffeeshophaveemergedincurrentmarket,someofthemhaveasimilarbusinesspatternwithStarbucks,theircoffee,environment,desertareallsimilartoStarbucks.HowcanStarbucksremainitsstatusincoffeemarketmustbeahugeproblemforit。

3。3Strategies

3.3。1Strategiesdevelopment

Chinaisthemostimportant,andpotentiallythelargestmarketforStarbucksoutsideNorthAmerica。Takingalong-termvisioninChina,StarbucksremainsconfidentinitssuccessintheChinesemarket,asitviewsinChinaexactlyatthetimewhentheChinesepeoplearelookingformoreleisurelifestyleandwhenthecompanyidealsmeshperfectlywithChina’saspirationtodevelopa“harmonioussociety.”Thefactthatcorporatesocialresponsibilityisattheheartofourcompany‘svalueisgreatlyappreciatedbyChinesepeopleandsociety。

InChina,Starbucksmaintainstheuniquecharacterofservingthefinestcoffeeintheworldandhighqualitygloballyappreciatedfood.Whilecontinuingtoofferthebestcoffee,itisalsoleadinginChinainspreadingcoffeeknowledgeandexpertise,andcreatingacoffeecultureinatraditionaltea—drinkingsociety。TheStarbucksstoreatmosphereisonewhichissimilartotheoldteahouseofChina-agatheringplaceandagatheringplaceandacommunitylivingroom.

StarbuckspartnersinChinaareaswelcoming,genuine,considerate,knowledgeable,compassionateandinvolvedaspartnersfromaroundtheworld。

3。3.2Identifystrategicfit

SomeofthemethodsStarbuckshasusedtoexpandandmaintaintheirdominantmarketposition,includingbuyingoutcompetitors’leases,intentionallyoperatingataloss,andclusteringseverallocationsinasmallgeographicalarea,havebeenlabeledanti—competitivebycritics.

HYPERLINK”http://en.wikipedia。org/wiki/Starbucks"\l”cite_note—Klein2009—187"

[187]

Forexample,StarbucksfueleditsinitialexpansionintotheUKmarketwithabuyoutofSeattleCoffeeCompany,butthenuseditscapitalandinfluencetoobtainprimelocations,someofwhichoperatedatafinancialloss。Criticsclaimedthiswasanunfairattempttodriveoutsmall,independentcompetitors,whocouldnotaffordtopayinflatedpricesforpremiumrealestate。

HYPERLINK"http://en.wikipedia.org/wiki/Starbucks”\l"cite_note—188”

[188]

Whilerelationswithindependent

HYPERLINK”http://en.wikipedia。org/wiki/List_of_coffeehouse_chains"\o"Listofcoffeehousechains"

coffeehousechains

havebeenstrained,someownershavecreditedStarbuckswitheducatingcustomersoncoffee.

HYPERLINK”http://en。wik/wiki/Starbucks”\l”cite_note—189”

[189]

3。3.3Table2:SWOT/StrategiesMatrix

Internal

external

strengths

weakness

opportunities

SOstrategies

1。)goodqualityandtasteofcoffee

2。)comfortableenvironment

3。)cooperatewiththeteacultureandcoffeeculture

4.)profitableorganization

WOstrategies

1.)directsalesstrategy

2.)brandcrisesreversestrategy

3。)differentiationstrategy

threat

STstrategies

1。)goodreputation

2.)theorganizationhasstrongethicalvalues

WTstrategies

1.)productlineshrinksstrategy

2。)turndowntheunprofitableordeflectstone

4ProductDevelopment

4。1StrategySelection

1。Differentiationstrategy

ThedifferencewasStarbuckscompetitionweapon.ThroughtheCoffeedrinksindustrytoprovidedifferentiatedproductsandservices,thecompanyreceivedafarhighe1QArthanotherCoffeeshopprofitrate,However,differentiationstrategyhasrisks。Itincludes:Customerstobuynotonlydependsonthedegreductdifferentiation,therelativepurchasingpowerlevelalsodependsonthecustomer。Andtheimpactoftheeconomicenvironment。Whenthelatterforceislargeenoughtomakethecustomersnolongerwillingtoexperiencemoreofthebill,theenterprisewillfacetherisk.Nodoubt,theimpactoffinancialcrisisonStarbucksisdirectandobvious.

2Diversificationstrategies

Inordertomeetthechallenge,whichbrokethestory。.Starbucksbegantodiversificationstrategyasapowerfulweapon.InUSAnativeCoffeeshopTheinstallationcanproducetheirownCDpersonalmusicappreciationandTaiwan,thefilmindustryetcInsuchawayforcrossindustrydevelopmentInChineseStarbucksalsohavefoundanotherwaytoexpandthebusiness。suchassellgift。VarietyofgiftsfrombrewingdevicesofvariousCoffee,toallkindsofCoffeecupNotepadetc。ThisStarbucksprintedinkmarkgreengoodshavebeenputontheshelf.

3.Competitivestrategy

Thecampaccordingtoaffinity

Holdyouwithmusic

SellsomethingmorethanCoffee

4Brandalliances

Starbuckspromoteastrategicbrandbybrandallianceistherapidexpansionofthebrandadvantage。,Lookforstrategicpartnerstoprovidetheirownbrandequityintheprocessofdevelopment,Toexpandsaleschannels,Analliancewithastrongpartner,Theexpansionofmarketingnetwork。

5.Overseasmarketexpansion

StarbucksselectsthefirststationinAsiaasamarketexpansion,isbecause:

AsiahasalotofhelptoStarbucksexpandmarketshare

AsiacanbecomeasourceofStarbucksqualityArabiaCoffeebeans

StarbucksinAsiaiseasywiththeadvantagesofpublicrelations

4。2ProductSelection

4.2.1Ideageneration

Starbuckscanquicklycomeupwithnewideas,theintroductionofducts;itisalsotheveryfavorablecompetitiveadvantage。StrictSysteminnovationletStarbuckseachbranchcanalwaysmaintainhighsales.Starbuckstryingtolaunchducts,atthesametimeensureitscoreproducttomaintainthestabilityofthecompetitiveadvantage。Theinternalsourcesmainlycomefromtheemployeesandcustomers。Anyadvice,nomatterhownotworthmentioning,therearegoingtobegreatorsmalleffectonthecompany.StarbuckCorpoftenpollswithinthecompany.Employeesurveysystembyphoneorwritecommentcardsontheissueofspeakone’smindfreely。Relevantmanagementpersonnelintwoweekswillrespondtotheirattention.StarbuckCorpstillsetupinternalforum。Starbucksthroughemployeeincentivesystem,tostrengthentheircultureandvalues.Andbecameoneofthedonotrelyonadvertisingtobuildbrandenterprises.

Wheneverandwhereverstrucktendtoprovidethemostsatisfactoryserviceforthecustomer.Starbuckstriedtodonotletanyonecustomerhadanunpleasantexperience。Therefore,manycompanies-strategyfromconcentratedsetupshop,togetofffromtheserviceinsomeareasaredesignedtoprocessletcustomerswaitinginlinemorequickly,soastoavoidthecustomerwaitingimpatiently。Theyalsogetadvicesfromthedistributors,competitors,andsuppliers。Undertheconsiderationofexternalfactors,Starbuckstryingtoladucts,atthesametimeensureitscoreproducttomaintainthestabilityofthecompetitiveadvantage

TpanyplanstolaunchnewkindsoffoodsuchashotbreakfastsandwichandthenewbeveragesuchasCoffeeliqueur,evenCoffeepumpkinflavor。

4.2.2MarketingStrategy

1targetmarket:haveacertainsocialstatus,highincome,haveacertainlifestyleofpeople.

2theplannedvalueproposition:Starbuckscoffeenotimplementlow-coststrategy,butnotthesaleprice,inordertoprotectStarbucksuniquefeelingcoffeebringcustomer.Starbucksdoarticleonaddedvalue,letthecustomerfeelvalueformoney.First,increasethevalueculture,whencoffeebeansasordinarycoffeesales,adollarapound;theprocessingforthesalesinstantcoffeepackaging,acupof5to2.5cents;coffee

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