1. managing a high growth brand
STARBUCKS
managing a high growth brand
MKT 6330
dana turet • william campos • zach johnson • belle marco • leah torres • xue 'snow' cao

2. WHAT WE'LL DISCUSS • Building the starbucks brand
• Starbuck's growth strategy
• Creating a global brand
• Plans for product expansion
• Plans for geographical expansion
• Competitors and threats
• The "starbucks experience" – why it works

3. STARBUCKS COMMERCIAL "We're Starbucks. Nice to meet you."

5. BUILDING THE STARBUCKS BRAND
Inviting environment and pleasurable experience offers more than just coffee
Efficient and innovative processes lead to high quality and consistent service
Customer and employee-focus builds brand loyalty
Strategic expansion plans through partnerships drives rapid growth

6. STARBUCKS BRAND EVOLUTION

7. SOURCES OF BRAND EQUITY
Brand identity
Loyalty to the brand name
Trademark green and custom logo
Brand values
Local community-focused mindset
Customer service is key
Commitment to quality
Brand personality
Relaxing but sophisticated (European feel)
Giving back

9. STARBUCKS GROWTH STRATEGY
Market expansion
Local > National > Global
Strategic partnerships spur rapid expansion
Market penetration
Focus on building brand loyalty
Leads to word-of-mouth publicity
Convenient locations maximize awareness
Diversification
Product variation (i.e. PepsiCo partnership)
Expanding into music, coffee-related supplies, etc.

10. CREATING A GLOBAL BRAND
Internal efforts
Strong leadership with expertise
High investment in employees and training
Efficient, scalable processes that can be replicated
External efforts
Highest quality products and service
Appeal to ‘non-coffee drinkers’ through variety to broaden awareness
Focus on the customer experience
Strategic partnerships are low cost and low risk and allow for rapid expansion

11. CREATING A GLOBAL BRAND, CONT.
Challenges
Rapid expansion makes consistency difficult
Increasing costs of coffee > higher prices
Growing competition in quality, prices, locations and convenience
Strategic partnerships require losing a degree of control over the brand, with low profit margins

12. PLANS FOR PRODUCT EXPANSION
Initial success in expansion into new products
Music kiosks, CDs and iTunes downloads
Canned drinks, instant coffee, foods and gum
Credit cards and film production
Branded liqueur
Appeal to wider audience and opportunity to broaden brand awareness – be known for more than just coffee
Analyst suggest to evaluate short-run profits versus long-run benefit for the brand
Don't stray too far from core strengths
Purchased Hear Music retailer in 1999

14. GEOGRAPHICAL EXPANSION
Successful international expansion to date leading to increasing revenue/growth
Should focus on areas with political and economical stability and low market saturation
Success in Asian markets
Europe has potential but high saturation
India, Russia, Brazil have opportunity with young consumers and low saturation
Avoid areas with instability and poor economic state such as Middle East and Africa

19. STARBUCKS' COMPETITORS
"Third place" competitors with similar offering but lower penetration and brand loyalty
Panera bread
Caribou Coffee: a dangerous rival
Similar value proposition
Starbucks has more penetration (8000 stores v. 400 stores)
Commercial: "Get Real."

20. STARBUCKS' COMPETITORS
Value competitors offering quality and convenience but unmatched atmosphere
McDonalds
High market penetration (12,000+ locations)
High quality and low cost
Cannot compete on the ‘experience’
Dunkin Donuts
Strong anti-Starbucks marketing and loyal audience

22. RECENT DEVELOPMENTS
Starbucks has continued to dominate as a leading global brand through
High engagement of social media
Mobile apps and rewards programs

23. SO, WHY DOES STARBUCKS WORK?
People buy into the brand, not just the product
Customers are willing to pay higher prices in return for a consistent, reliable, quality experience
Coffee products can be replicated and some may even taste better, but customers aren’t just paying for coffee
Brand trust and loyalty serves as foundation to continue selling high cost products (like $400 espresso machines) to loyal brand customers

25. QUESTIONS?
let's talk.