1. STARBUCKS COFFEE Presented by: ChinmayaVashishth Debendra Rout DewalJindal KapilDaga KapilSingla Karan Sood PranjalMehrotra

2. STARBUCKS COFFEE We’re not in the coffee business serving people… We’re in the people business serving coffee. -Howard Behar, Director of Retail Operations

3. Agenda History and Business growth strategy Problem Identification Starbucks and Market research SWOT analysis Recommendation Future prospect and conclusion

4. STARBUCKS: THE HISTORY The original Starbucks store was started by ZeivSiegl, Jerry Baldwin and Gordon Bowker in 1971 It was opened as a store that sold whole beans and premium-priced coffee beverages Howard Schultz’s joined with Starbucks in 1982 and his idea was to create a chain of coffee houses with a product differentiation of specialty “live coffee”, service or customer intimacy with an “experience”, and an atmosphere of a “third place” to add to their work and home alternatives. The stores targeted selling their coffee primarily to affluent, well educated, white-collar patrons between the ages of 25 and 44. In 1992 Howard Schultz , after opening Starbucks 140 stores, took the company public and by the end of 2002 Starbucks had opened more than 5000 stores across the globe.

5. MARKET SHARE ACROSS USA

6. PRODUCT MIX The company spent minimal dollars on advertising to promote a brand concept , still achieving phenomenal sales figures The majority of sales came from coffee based and other beverages and the rest from food items and whole bean coffee sales. Other- 15% Revenue Source Product Mix with % sales

7. SALES FIGURES

8. STARBUCKS: THE SUCCESS ‘Live Coffee’ Mantra Highest quality coffee offered Control the supply chain- Work with the growers, oversee the roasting and control the distribution Continuous product innovation

10. Changing Perception

11. Unsatisfied Customers

14. Category Group

17. Facing Competition not from newcomers but from older coffee chains that have increasing customer loyalty.

20. Importance of Findings  Action  Impact

21. Customer Values

22. What as an organization we are doing for customers?

23. Customer Satisfaction/Loyalty

25. Demographically

28. By product line? 16

29. STARBUCKS and Market Research Strong Proactive culture @ STARBUCKS

30. Strengths The Brand Starbucks Strong Financial Base Large number of locations 3rd Party Tie-Ups Growth through Innovation Respected employer

31. Weaknesses Undisciplined Marketing Inflexible Pricing Does not tailor its branches according to location

32. Opportunities Tie-ups with other established businesses Developing international business Diversification into other drinks

33. Threats New Entrants Competitive rivalry Substitution Bargaining power of Customers

34. Recommendations Strategies to Renew Starbucks Brand Name (a) Advertising and Promotion: Market there brand more aggressively in order to convince people that Starbucks serves coffee that is superior to other coffee and beverages. (b) Product Differentiation: Starbucks should work on differentiating its coffee. They should invest in extensive research and development efforts to develop new flavors, blends or even roast fusions. (c) Coffee Variety and Quality Control: In catering to different consumer preferences, Starbucks needs to increase its variety of coffee offered. Starbucks needs to ensure that the coffee offered is of the highest quality.

37. Development Growth Maturity Decline Europe USA Asia Life-cycle model of coffee consumption Latin America Latin America

39. Focus on Health Drinks

41. Questions