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Starbucks marketing strategy

  1. Sankaran S Saravanan J
  4. 4 STARBUCKSCoffee In the beginning “ Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow”. Now “ To inspire and nurture the human spirit - One person, One cup, and One Neighborhood at a time”. STARBUCKS - Mission STARBUCKS Coffee
  5.  58 years old  Grew up poor  His father had a hard life  Excelled at sports and won an athletics scholarship  Graduated in Business & Marketing  Joined Starbucks Company in 1982 as Diector of Marketing HOWARD SCHULTZ – CEO OF STARBUCKS
  6.  1983 : he went on a trip in Milan:  Coffee bars existed on every street  2,00,000 in the country  Served as meeting places  His idea: bring the Italian coffee house tradition back to the United States  The pilot coffee concept was successful but  the owners refused to develop the concept HOWARD SCHULTZ – VISION OF A CEO
  7.  1985: Started his own coffeehouse: Il Giornale Coffee  1987: purchased Starbucks Coffee (6 stores)  Renamed Il Giornale Coffee with the Starbucks name  Expended aggressively first across the United States and then around the world HOWARD SCHULTZ – VISION OF A CEO
  8.  2008: regained his status as a CEO of Starbucks  Co-authored: “Pour Your Heart Into It”  “Starbucks may become another soulless big chain” HOWARD SCHULTZ – HIS FEAR
  9.  2009: 616 US Starbucks Coffee closed  1/3 of the headquarters employees were fired  2000 jobs lost TOO MANY STORES…TOO EXPENSIVE
  12. 12 STARBUCKS Coffee Marketing Mix Marketing Strategy SWOT Market segmentation Competitive strategy of Starbucks Globalization strategy of Starbucks Market Targeting Market Postioning STARBUCKS Coffee
  13. MARKET SEGMENTING Demographic segmentation(markets by age, gender, income, ethnic background, and family life cycle) . Geographic segmentation (markets by region of a country or the world, market size, market density, or climate) Psychographic segmentation, targeting customers based on their lifestyle and attitudes about ‘fairtrade' food. Behavioural segmentation , Occassion , loyalty program and rewards , benefit sought with offers [ by using starbucks card ]
  14.  18-45 year olds  Youngsters who want to gather with their friends  Office workers and students who need to catch up with their work  Those who feel that drinking coffee is "cool"  People who are adventurous, willing to try new things TARGET
  15. Market Positioning & Positioning Strategy  Starbucks has positioned themselves as a highly respected brand.  The Starbucks company has positioned itself in a way that it can distinguish their products from competition, which gives them an advantage.  Their positioning strategy is customer based, which allows them to give the best customer service.  Starbucks hold onto their sustainable competitive advantage in terms of their customer satisfaction as well as their employee satisfaction. Brands: Starbucks Coffee Seattle‘s Best Coffee Tonefazione Ital ia Coffee Tazo Tea Evolution Fresh
  16. 17 STARBUCKS Coffee Political Influences : Relationships between coffee producing nations and US State & Local government controls Economic Influences: Constant demand for food and beverages Changes in disposable income could influence purchase levels Social Influences: Consumer preferences could shift from coffee to other beverages Technological Influences: Use of technology can improve operational efficiencies STARBUCKS - PEST Analysis STARBUCKS Coffee
  17. SWOT
  18. Product diversification Established logo, developed brand, copyrights, trademarks, website and patents Company operated retail stores International presence Valued and motivated employees, good working environment STRENGHTS (1/2)
  19. STRENGHTS (2/2) Good relationships with suppliers Industry market leader Customer loyalty Wide spread and consistent Knowledge based Strong Board Trendy brand image Strong financial foundation
  20.  Lack of internal focus (too much focused on expansion)  Cross functional management  Product pricing is high WEAKNESSES
  21. Competition (restaurants, street carts, supermarkets, other coffee shops, other caffeine based products) Market saturation Coffee price volatility in developing countries Negative publicity from poorly treated farmers in supplying countries THREATS (1/2)
  22. Expansion into retail operations Technological advances New distribution channels (delivery) New products Distribution agreements Brand extension Emerging international markets Continued domestic expansion/domination of segment OPPORTUNITIES
  23. THREATS (2/2) Consumer trends toward more healthy ways and away from sweet coffee beverages and cakes Cultural and Political issues in foreign countries
  24. STARBUCKS Coffee price BrandQuality Convenience location Variety Reputation Customization Online user low High
  25. 26 STARBUCKS Coffee  Focused Differentiation  Serve niche buyers than rivals.  Have unique capabilities to serve needs of target buyer segment.  Be profitable and offer good growth potential.  Resources and capabilities to serve an attractive niche. STARBUCKS – Competitive Strategy STARBUCKS Coffee
  26. Marketing mix
  27. 28 STARBUCKS Coffee Marketing Mix Product Price place Promotion Customersolution Customer cost convenience communication 4 P’s 4 C’s To be effective, marketing people have to consider the 4 C’s firstand thenbuildthe 4 p’s based on requirements STARBUCKS Coffee
  28. 4/23/2015 PRODUCTS Coffee: Eilonde Roast Medium Roast Flavored Coffee Seasonal Favorites Handcrafted Beverages: Fresh-brewed coffee Hot and iced espresso beverages Frappuccino coffee and non-coffee blended beverages Tazo teas Fresh Food Items: Baked pastries Sandwiches Salads Oatmeal Yogurt parfaits Fruit cups Starbucks Ice Cream: Super-premium coffee Coffee-free avors
  29. 4/23/2015 PRODUCTS Ready-to-Drink : Starbucks bottled Frappuccino coffee drinks Starbucks Discoveries chilled cup coffees Starbucks Doubleshot espresso drinks Starbucks Doubleshot Energy+Coffee drinks Seattle‘s Best Coffee Iced Lattes Tazo bottled iced and juiced teas Merchandise: Coffee- and tea-brewing euipment Mugs and accessories Packaged goods Music Books Gift items Consumer Products: Coffee and Tea : Whole bean and ground coffee, Starbucks VIA Ready Brew Tazo tea lterbags and tea latte concentrates
  30. 31 STARBUCKS Coffee PRODUCTS Variety Quality Design Features Brewed coffee Attractive ,descent, convenientFresh product cappuccino, Caramel cappuccino, tea packaging services Attractive, easy to handle Just in time ,ready to drink , fair trade policy STARBUCKS Coffee
  31. PRICING STRATEGY PRICE SKIMMING  Premium Price for Premium Product Why the High Prices?  Increase pricing in Fuel/Energy  Fair-trade Movement  Changes in PEST in US & different geographical location PRICE
  32. FAIR TRADE MOVEMENT WHY THE FAIR TRADE MOVEMENT? Help ensure that farmers receive an equitable price for their coffee and strengthen their farms for the future. HOW IT WORKS? Long term contracts Affordable credit for farmers Direct purchasing Investing social projects in coffee communities PRICE
  33. FAIR TRADE MOVEMENT STARBUCKS IN NORTH AMERICA’S LARGEST PURCHASER OF FAIR TRADE CERTIFIED COFFEE. In 2005 Starbucks purchased 11.5 million pounds of Fair Trade Certified coffee. Pay $1.42 per pound PRICE
  34. Fair Trade & the “Starbucks Effect” Paying premium prices stimulates production of high quality coffee. Allows farmers to increase income and reinvest in their farms and plan for the future. Promotes steady and sustainable growth in a market with price fluctuations. Upholds Starbucks commitment to purchase high-quality product in a socially responsible manner PRICE
  35. 36 •Higher income group location place •Airports ,malls,wel known areas •Highly visiting areas •locations of Seattle’s Best or placement of the brand within 30 miles, rebrand some locations as a local shop. PLACE STARBUCKS Coffee
  36. PLACE: A PLACE FOR AMBIENCE & EXPERIENCE  Warmth, Comfort, Diversity  A place of quiet contemplation  Some kind of neighbourhood office  A gathering place for neighbours and friends
  37. 4/23/2015 Promotional Mix Advertising Personal Selling Public Relations Sales Promotion
  38. 4/23/2015 Promotional Mix ADVERTISING Increase from 1.4% to 3% by 2009 Radio TV Billboards PERSONAL SELLING  Baristas must continue to be the very best  Starbucks must create an incentive to retain and reward baristas PUBLIC RELATIONS  Parties Big, Juicy Paintings Trump Tower  Nationwide Coffee Break  Public Performances  Charitable Contributions Green initiatives Philanthropic endeavors Change: Run promotions in conjunction with contributions
  39. 4/23/2015 SALES PROMOTIONS  Return of incentive cards Tie in with public relations Loyalty program  Daily coffee break HOLIDAY AD  Pass the Cheer Holiday web site Viral video’s Sample vans Ads Newspapers, Magazines, Radio, and Billboards  Short Cups Promotional Mix
  43. SNS Social media campaign Starbucks iPhone app QR Code scanner and start connecting the physical world to your mobile device Gift card to start a relationship
  44. SNS
  45. 46 STARBUCKSCoffee With just 20% of the world's coffee consumed in North America, Starbucks has to aggressively sell its offerings in countries that already have dedicated coffee or tea drinkers. Issues : Saturated home market – leading to self cannibalization. Reaching Brand Maturity stage in U.S. International joint ventures Culture Gender issues Marketing channels Cross-cultural management issues  STARBUCKS - Why Globalize ? STARBUCKS Coffee
  46. 47 STARBUCKS Coffee  Retailing formula is same throughout the world whereas product offerings and are modified to suit local tastes.  Starbucks advertising strategies play a crucial role in the success of the business.  The advertising strategies adopted by the firm are more local and differentiated rather than standardized.  Global Market Segments National Product HYBRID II MARKETING STRATEGY STARBUCKS - Global Marketing Mix Strategy
  47. 48 STARBUCKSCoffee Some of the methods Starbucks have used to expand and maintain their dominant market position:  Buying out competitors' leases.  Intentionally operating at a loss.  Clustering several locations in a small geographical area (i.e.,saturating the market). STARBUCKS - GLOBAL Entry Strategies STARBUCKS Coffee
  48. 49 STARBUCKSCoffee “RESPECT FOR LOCAL CULTURE” Chairman Howard Schultz “ We remain highly respectful of the culture and traditions of the countries in which we do business . We recognize that our success is not an entitlement, and we must continue to earn the trust and respect of customers every day .” Starbucks is dedicated to supporting communities around the world – where we live, where we work and in the countries where our coffees are produced. STARBUCKS Coffee STARBUCKS – CULTURAL DIVERSITY
  49. 50 STARBUCKSCoffee Starbucks’s initial foreign forays were launched through joint venture and licensing arrangements with prominent local retailers. The first market developed in 1996 was Japan with the help of SAZABY Inc., a Japanese retailer and restaurateur. STARBUCKS - GLOBAL Expansion STARBUCKS Coffee
  50. 51 STARBUCKSCoffee JAPAN : The Japanese are noted for admiring and adopting American products and trends such as blue jeans and Coca-Cola. Critics warned that the Japanese would never buy take-out coffee in paper cups or accept the interior non-smoking policy. Starbucks proved them wrong. Some 30% of its customers drink take-out coffee in those throwaway cups Globalization – Issues faced and Tackled in different countries STARBUCKS Coffee
  51. 52 STARBUCKSCoffee FRANCE : Starbucks had to deal with an initial lack of acceptance from France's historic cafe culture, with older consumers frowning on a big house chain with standardized disposable cups. Younger coffee drinkers in France joined American tourists in Paris to embrace such favorites as Starbucks caramel coffee. STARBUCKS Coffee Globalization – Issues faced and Tackled in different countries
  52. 53 STARBUCKSCoffee CHINA: The company is aggressively expanding in China where Chinese traditionally prefer tea. [eg: TAZO TEA] Key to success in China are coffee houses that empower China's emerging middle class to publicly display their new lifestyles an status while keeping Starbucks beverages as affordable luxuries. STARBUCKS Coffee Globalization – Issues faced and Tackled in different countries
  53. 54 STARBUCKSCoffee England Second biggest overseas market for Starbucks. Tackling imitators aiming at reducing market share of Starbucks. Italy Lower pricing and popularity of local brands. Culture of serving food with coffee – Starbucks had to address the demand. STARBUCKS Coffee Globalization – Issues faced and Tackled in different countries
  54. STARBUCKS FAILURES 2003: Starbucks closed all six of its locations in Israel due to difficult business environment 2007: closed its store in Beijing's Forbidden City 2008: closed 61 of its 84 stores in Australia: Starbucks failed to truly understand Australia’s cafe culture.
  55. PROMOTION: COMMITMENT TO THE WORLD Fair trade Largest buyer of Certified Fair Trade coffee in North America (10% of the global market) Starbucks has given the FTC label greater visibility, helping to raise consumer awareness in the process. Opens farmer support centers in Africa GLOBAL CONTRIBUTION
  56. PROMOTION: COMMITMENT TO THE WORLD Product (red)  Raise awareness and funds to help eliminate AIDS in Africa.  Starbucks’ Red products and Red card:
  57. PROMOTION: COMMITMENT TO THE WORLD Helping countries after natural disasters
  59. Global company Howard Schultz: Geocentric Orientation Adaptation Strategy Globally Successful Future Oriented IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

Notas do Editor

  1. Aujourd'hui, après 40 ans, Starbucks est bien plus large que le seul café et les produits secs de ses débuts.... Cela reste notre cœur de métier mais nous vendons du thé, de la nourriture, de l'instantané, du frappucino en bouteille, des glaces,  y compris dans les supermarchés aux Etats-Unis. Notre logo devait refléter tout cela : être plus flexible et nous offrir plus de liberté. Nous avons libéré la sirène !
  2. Facebook: more than 20 million fans Twitter My Starbucks Idea: share ideas, comments product ideas experience ideas involvement ideas
  3. nous avons rapidement reçu des milliers de suggestions, comme celle de proposer gratuitement le WiFi dans noscafés ou de lancer une carte de fidélité avec des réductions. 
  4. 600-year-old complex that sits in the heart of Beijing and is one of the most popular tourist sites in the world
  5. Every time you buy a (STARBUCKS)RED product or pay with your (STARBUCKS)REDCard*, we make a contribution to the Global Fund to help people living with HIV/AIDS in Africa. 
  6. A full service, sit down restaurants called Caffé Starbucks , a hip tavern with coffee undertones called Circadia and a magazine (Joe magazine) all failed