Starbucks Marketing Plan Shanna Cui, Nakyung Kim, Stephanie Kubota, Jade Tsan

Company Description Starbucks Corporation is an international coffeehouse chain based in Seattle, Washington, United States of America.

Company Description Mission Vision To inspire and nurture the human spirit - one person, one cup and one neighborhood at a time Vision “Together we will elevate our partners, customers, suppliers and neighbors to create positive change. To be innovators, leaders and contributors to an inclusive society and a healthy environment so that Starbucks and everyone we touch can endure and thrive.”

Company Description (Cont.) Goals Learn, aspire, partner and innovate Ethical sourcing, Environmental Impact and Community Improvement

Company Description (Cont.) Core Competencies High quality coffee and products at accessible locations and affordable prices, provided a community to share in the coffee drinking experience, and variety of choices Sustainable Competitive Advantages The differentiation strategy of being a premium and unique coffee- drinking provider

Industry Analysis Starbucks primarily operates and competes in the retail coffee and snacks store industry.

Industry Analysis Had a had a decade of growth Experienced a major slowdown in 2009 due to the economic crisis and changing consumer tastes Grew at a low annualized average growth rate from 2008 till 2013 Be forecasted to grow because of an improving economy, increase in consumer confidence and expanding menu offerings within the industry Dominates the industry with the largest market share

Competitor Analysis While Starbucks has become the biggest coffee chain, its primary competitors are fast service corporations.

Competitor Analysis- Dunkin Donuts Rivalry was born when Dunkin Donuts added lattes to their menu. Dunkin provides low cost coffee that attracts price sensitive consumers. The east coast is filled with Dunkin Donuts lovers. Neither Starbucks or Dunkin Donuts dominate consumers preference.

Competitor Analysis- McDonalds In response to the coffee war, McDonalds brought in 2008 McCafe. McDonalds location outweigh Starbucks shop, giving McCafe to spread through vast locations without incurring major expenses. McCafe menu resembles the Starbucks menu. Yet McCafe provides similar products at a fraction of the price. The company focuses on a wide range of products which makes it challenging to compete with specialized companies.

Company Analysis Strengths: Weaknesses: Leading coffee chain with 20,519 stores worldwide. Starbucks owns 32.6% of the market share. Shops are found at every corner. Weaknesses: High quality coffee and customer service is tied to its high prices. Not all Starbuck stores have been accepted internationally. Limited liquidity.

Company Analysis Opportunities: Expanding products: K-cup, teas, juices and bottle drinks. Technological Advances: Starbucks App that have reward programs to increase customer loyalty. Starbucks products are available in supermarkets.

Company Analysis Threats: Lossing price conscious customers. Price of the supply of coffee beans fluctuate. Saturated coffee market in developed countries.

Starbucks (BCG) Matrix Company Analysis Starbucks-Star: Net revenue increased between 2003 until 2005. Industry sales growth rate between years 2004 and 2005 is 56.3% Starbucks (BCG) Matrix

Consumer Analysis Purchase Decision Starbucks!! Problem Recognition Coffee lovers People who need caffeine (i.g. College students, workers) People who wants tea or bread Information Search Reputation Accessibility Quality of products Promotion, coupons Price Need coffee Alternative Evaluation Dunkin Donuts McDonalds Post-purchase behavior High consumer satisfaction (American customer satisfaction index, 2014) Purchase Decision Starbucks!!

Market-Product Focus Marketing and product objectives Target Markets “To say Starbucks purchases and roasts high-quality whole bean coffees is very true. That’s the essence of what we do – but it hardly tells the whole story. Our coffeehouses have become a beacon for coffee lovers everywhere. Why do they insist on Starbucks? Because they know they can count on genuine service, an inviting atmosphere and a superb cup of expertly roasted and richly brewed coffee every time (Starbucks Corporation).” Target Markets College students & Working professionals

Market-Product Focus (Cont.) Points of Differences “Starbucks’ unique selling point is the “rich experience” that goes beyond a cup of good coffee. Differentiated Products Espresso beans: They throw away ground espresso beans if they last longer than 30 minutes. Coffee machine: Most stores of Starbucks have upgraded their coffee machine to the Swiss-made Mastrena, which is high quality- espresso machine.

Market-Product Focus (Cont.) Points of differences Differentiated Service Smartphone application: Payment, coupons, membership level (green, gold), find locations Training employees: 30 hours training (Barista), ordering process in 3 minutes Hidden menu: over 180 of secret menus

Market-Product Focus (Cont.) Points of differences Starbucks’ hidden menu : Secret lattes, Frappuccinos, macchiatos, and drinks

Market-Product Focus (Cont.) High Positioning High quality & high price : high quality of products with excellent service and atmosphere. Low High Price Quality Low (Perceptual map)

Product Strategy In the maturity phase, Starbucks has to defend its market shares while maximizing profit.

Product Strategy (Cont.) Products range from coffee, handcrafted beverages, merchandise, to fresh food such as baked pastries and sandwiches Offers exceptional customization of its beverages for its customers Uses product expansion by introducing seasonal drinks Depends on word of mouth and social media for its promotions Utilizes branding strategy of having different brands such as Teavana, Tazo, Evolution Fresh, to reach out to other markets and sell more products

Pricing Strategy Does not emphasize price as a competitive advantage, sells service to their customers instead Due to strong the strong identity of the brand, Starbucks is able to maintain its pricing Previously raised the prices of the tall sized coffee beverages exclusively Uses price skimming by offering premium price for premium products Psychological pricing: customers that want higher quality coffee buy products that are higher priced

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