Starbucks Analysis

Sales objective: to increase sales by 12% in the next 2 years by opening 150 new Starbucks retail locations within Canada. Profit objective: to increase profit by 8% in the next 2 years by not competing on price. Starbucks should differentiate themselves in other ways, whether giving superior value or reducing prices will only waste effort, time and emotional costs. Market share: to increase market share from 24% to 30% by 2015 by introducing an extension of a product line. Unique Selling Point Starbucks stands out because of their high-quality coffee beverages and they’ve been known for the same.

Starbucks is also known for their experience they deliver to the customers with perfectly blended coffee, good music, friendly staff and warm environment, which gives an incomparable customer service. Name, Logo & Positioning Name: Starbucks is named after the first mate in Herman Melville’s Moby Dick. Our logo is also inspired by the sea – featuring a twin? tailed siren from Greek mythology (Starbucks. com). Logo: The original Starbucks logo, conceived in 1971, was fashioned after a 15th century Norse woodcut, the image of a mythical two-tailed mermaid siren.

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The siren, as you may recall from Greek mythology, was an alluring and irresistible female figure, typically half-fish/half-woman (Ask. com). Positioning: Starbucks will be positioned as the leading coffee house that will appeal primarily to premium coffee for men and women between ages of 25-40, young adults and serious coffee drinkers who enjoy the experience beyond a quality cup of coffee. Target Market Segmentation Demographic: Starbucks focuses mainly on men and women between the ages of 25-40 who have high income and professional careers, which accounts for almost half of its total business.

Young adults aged18-24, are the next large group that Starbucks targets. It is marketed to the people who actually need caffeine in their daily routine. Geographic: The geographic market segment for Starbucks located primarily in suburban downtown and college campus. The coffee house locates its retail stores in central spots of a neighbourhood such as train stations because these spots are easy to reach for everybody in a community. Psychographic: Starbucks’ psychographic segmentation aims for the consumers who like to socialize and share a neighbourhood.

Behavioral response (Usage Rate): Starbucks chooses this type of behavioral responses because not everyone could afford the money to buy a cup of coffee daily. Thus, it would be difficult for Starbucks to try getting other customers’ attention rather than satisfying their heavy consumers. Marketing Strategies Product: Tangible: Specialized coffee machines and equipment. Large numbers of stores. Operations in 40 countries with over 9000 coffee shops. Intangible: Techniques to roast and brew coffee. Specialized beverages Large satisfied customer base.

Reputation for having the finest products and services in the world. The feeling holding a premium cup of coffee. Price: Starbucks maintains the highest price for their beverages against other competitors. We want to keep this pricing strategy because Starbucks wants to give the customers the sense of higher quality and stronger taste coffee. Placement: Starbucks has strategically located its retail locations. Starbucks’ stores are in downtown location and colleges’ campus which help Starbucks to get maximum daily visits.

Starbucks positions itself as “a place where college students can hang out, study, write papers and meet people. ” Marketing Communication Mix Media advertising (Internet): to help create awareness by 15% towards the target market. With consumers increasingly spending more time on the internet and they actually find social media platforms and blogs more effective to grab their attention. By taking the advantage of the internet, Starbucks will be able to get the customers’ attention and limited-time specialized drinks. Sales Promotion: to increase sales by 20% by giving customers better offers and deals.

Due to the busy Christmas season coming up, Starbucks is offering BOGO on “Holiday Drinks” from 2-5pm. This is a type of promotions, by doing this will help Starbucks to increase sales and make more profit. Offering BOGO deals would encourage customers to return. Social Responsibility Recently “typhoon Yolanda caused catastrophic destruction in the central Philippines, particularly on Samar Island and Leyte. According to UN officials, about 11 million people have been affected and many have been left homeless” (Wikipedia. org). Starbucks is determined to raise $500,000. 00 donation to rebuild the Philippines, provide clean water and food. S. W. O. T Analysis Strengths: Product diversification. Established logo, developed brand, copyrights, trademarks, website and patents. International stores (no franchise). High visibility locations to attract customers. Valued and motivated employees, good work environment. Good relationships with suppliers. Industry market leader. Strong financial foundation. Weaknesses: Lack of internal focus (too much focus on expansion). Increasing number of competitors in a growing market.

Cross functional management. Failure to understand and ask what customers wanted. On-the-go consumers don’t have time to wait in long lines in the morning. Opportunities: Expansion into retail operations. New products. Emerging international markets. Continued domestic expansion/domination of segment. Threats: Tim Hortons owns Eastern Canada and they keep on opening more locations. Increased competition from local coffee shops. Consumer trends toward more healthy ways and away from caffeine. Rising prices of coffee beans and dairy products.



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