Starbucks Uk And Tax Avoidance Marketing Essay

The intent of this assignment is to understand the PR state of affairs about starbucks ; the issues the company faced during the crisis in the UK ; when it went public that starbucks were non paying any corporation revenue enhancement. What they faced and how they can come even stronger out with their advertizements and public dealingss.

Background- Starbucks UK

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Starbucks was foremost opened in 1971 in Seattle ‘s market as a roaster and retail merchant for java beans, tea and spices. Since so they were able to open more than 17.009 stores in over 50 states. Starbucks foremost offered their investors to purchase portions in 1992. ( Starbucks, 2011 ) In September of 1998 Starbucks opened their first UK store in Manchester. ( Starbucks, 2009 )

Harmonizing to the company ‘s profile the name ”partners ” is given to the companies employees who are meant to be the bosom of a starbucks experience offered to their clients, they besides province that they believe in handling their ”partners ” with regard and self-respect. In 2008 Starbucks Announces ; Starbucks Shared Planet and with it they set in their duties as a company that they are committed on making concern responsibly and carry oning themselves in ways that earn the trust and regard of their clients, spouses and neighbors. ( Starbucks, 2011 )

Introducing the crisis

On October there were allegations that starbucks were non paying revenue enhancement in the UK. In early December it was announced that starbucks paid merely ?8.6m in its 14 old ages in the UK. Consumers were taking things to societal media doing an even bigger pandemonium for the company ; with its repute falling much higher than expected in less than a month. Before thinks were taken to the media there was a really little sum of consumers that knew of the state of affairs. The company tried explicating to the populace of the state of affairs and really holding to pay an sum of money over 2013-2014.

Question 1

When seeking to understand what PR is Tench, Yeomans ( 2009:5 ) suggest that PR is about pull offing communicating in order to construct good relationships and common apprehension between an administration and its most of import audiences. PR has to make with the repute of a company or an administration ; it has to make with what the company does, what they say and what others say about the company.

The usage of communicating to act upon the populace is non comparatively new it goes back to the ancient civilizations. Since those ages PR in Britain was a presentation of existent and echt facts that were seeking to convert the populace of different issues and policies. A cardinal characteristic since so when seeking to pattern PR in general but more specific in Britain is the importance of the truth that is an ideal tool, the potency for PR to be used as a agency for advancing freedom, democracy and in peculiar, the British manner of life ( Tench, Yeomans, 2009 ) . The cardinal features of PR in Britain are the usage of truth, the moralss and morality if the profession, the justification for utilizing PR in footings of common benefits instead than one sided advantage and ongoing blurring of boundaries between selling, propaganda and PR ( Tench, Yeomans: 14 ) .

What is written in the imperativeness is non ever the truth there is and was an on-going conflict between news media and PR ; but journalists want to cognize everything so there is in a manner a dependance between the two.

After what was announced in the imperativeness people were really irritated and frustrated with what starbucks had been making for a piece non paying revenue enhancements in the UK. Starbucks lost some of their loyal clients due to the revenue enhancement issue. On their web site, starbucks make clear to the populace that they have been paying what is required by jurisprudence ; but they besides mention that they have non paid a meaningful sum of corporation revenue enhancement due to the net incomes that the company makes stating that in the UK it is really hard for them to do net income and they were non in a place to pay much corporation revenue enhancement ( Starbucks, 2013 ) . They made certain and pointed out that they listen to their client and that they will be moving more responsibly by altering their attack to that issue. Kris Engskov, pull offing manager of Starbucks UK, said the company had begun “ a procedure of heightening trust with clients and the communities that we have been honoured to function for the past 14 old ages ” ( sky intelligence, 2012 ) . There were many people and concerns that did n’t understand how starbucks could non do a net income and non being paying corporation revenue enhancements but they are supposed to. Starbucks gave an account about it stating that some of the shops require high running costs so they make them unprofitable, but that the company is traveling to pay a important sum of money over the following twosome of old ages. These are said by some that is a despairing effort to derive back their clients to reflect public force per unit area from them ( BBC, 2012 ) . A Starbucks MD tells Sky News the java concatenation has non lied about its UK net incomes following a U-turn over paying corporation revenue enhancement ( sky intelligence, 2012 ) . The Prime Minister ‘s used the phrase “ wake up and smell the java ” in a address to the World Economic Forum ; the company ‘s UK pull offing manager Kris Engskov demanded negotiations with the Prime Minister which might hold made people ‘s liquors even more defeated ( sky intelligence, 2012 ) .

Harmonizing to selling hebdomad ( 2012 ) the impact on the trade name ‘s name is non expected to be a long term one ; adding that there is a ground why such trade names do so much and work so had to hold fans is so that when something like this happens are more likely to disregard or forgive it.

Question 2

Harmonizing to the quotation mark in the inquiry Tench & A ; Yeomans ( 2009 ) say that ‘there are cardinal ingredients in managing any crisis and they are: cognition, readying, composure, control and communicating. These will assist an administration secure the best possible result from a crisis ‘ .

Harmonizing to the newsmans from BBC ( 2012 ) starbucks admitted that there were taken by surprise by the degree of ill will and emotions environing the revenue enhancement issue. Starbucks knew good in progress that one twenty-four hours this issue might come out in imperativeness and they had to be more prepared when reacting to the populace. Mr Engskov came out during the first phases of the crisis denoting to the populace that the company had issues being profitable in this state ; and that they are now taking more actions in paying revenue enhancements although the company had been paying what was required by jurisprudence. Through him the company was able to pass on expeditiously with the public denoting the stairss that they will be taking after the incident, hebdomads after the issue was raised.

Although the issue has gone from the headlines starbucks should hold still been pass oning with the public seeking to reconstruct their repute and derive their credibleness back. They are a immense trade name name in the java industry and should hold been more prepared for such state of affairss. Starbucks were non prepared at all for this state of affairs harmonizing to a station in metro newspaper ( 2012 ) adverting once more that starbucks PR was a fail. Reuter ‘s ( 2012 ) remarks that the company accounts in Britain are confounding. They have been stating their ain investors that they are profitable, even though they continue to describe losingss. this was either a miscommunication amongst them or they were clearly concealing the facts in fright of even more issues. In the same article at that place seems to be a 2nd radiuss individual moving on their behalf who said that they seek to be good taxpayers and to pay their just portion of revenue enhancements ; the company does n’t compose this revenue enhancement codification ; they are obligated to follow with it. And that ‘s precisely what they do. Showing that the company did n’t take a certain individual to move responsibly on their behalf ; doing it more hard for them.

Question 3

Friedman and Miles ( 2006:154 ) before placing the stakeholders for starbucks reference that the house has a repute as being a stakeholder-focused house. Harmonizing to them starbucks list their stakeholders as:



Coffee husbandmans


Community members

Environmental groups




Harmonizing to the moralss of starbucks even if the employees have some sort of cognition of any state of affairs sing the company ; and they are asked to notice on any issues they need to name it to their directors ( starbucks, 2013 )


Many intelligence broadcasters say that the company has gone under fire after clients reached their boiling point in footings of choler after Starbucks attempted to compose a web log warranting its revenue enhancement outgo in the UK. Yet, this move as reference from Huffpost Business ( 2012 ) has fallen on deaf ears, as legion people get downing posting under his unfastened missive impeaching him of dishonesty and of lying to their clients.

java husbandmans

Starbucks provinces that after 2002 they have been paying premium monetary values to assist husbandmans be more profitable and have a better life. They even build a husbandman support Centre in Costa Rica to supply preparation and proficient support to guarantee that there is high quality java production while staying sustainable ( Friedman & A ; Miles, 2006 ) . During the crisis this stakeholder group were non involved in the dirt.


For their providers starbucks determined that they must run into minimal criterions and demonstrate best pattern. Those who high-scoring is said to have discriminatory purchasing position, higher monetary values and better contract footings. Even the bakeshop and dairy providers were encouraged in bring forthing more sustainable merchandises ( Friedman & A ; Miles, 2006 ) . This is one of the stakeholder group ‘s non involved in the crisis.

community members – environmental groups – militants

UK untrimmed protestors who protested in more than 40 UK subdivisions told tube ( 2012 ) its ”too small excessively latte ” . Amongst other candidates were the assistance bureaus that said that although the harm in the UK economic system is large in other poorer states is even bigger. The caput research worker at Save The Children agreed by stating that in this state there have been cuts in benefits for some poorer people while cognizing of the unpaid corporate revenue enhancement is merely non making it ( metro, 2012 ) .

T. Bleszynski, pull offing manager of The Alternative, says to marketing hebdomad ( 2012 ) that consumers are less disturbed due to being interested in the service offered by the trade name. If starbucks continues supplying the same outlook, revenue enhancement is non a large issue for consumers. However if they start to travel against nucleus trade name values or promises and interrupt a bond of trust with their consumers so ; it will hold an consequence.

To reason the above Starbucks needs to maintain their promises about their services being offer to consumers. The company is being trusted for their java and that will non alter, that ‘s what people trust.

Question 4

There are many ways to explicate the what advertisement is all about Taflinger ( 1996 ) defines advertisement as a non-personal communicating of information normally paid for and normally persuasive in nature about merchandises, services or thoughts by identified patrons through assorted media. After a assortment of researches seeking to happen out what advertisement is all about Richards and Curran ( 2002 ) came to place advertisement as a paid non-personal communicating from an identified patron, utilizing mass media to carry or act upon an audience.

Ad in world is meant to turn a possible client toward a merchandise or service by supplying information or making a positive feeling something that most of the times goes good beyond merely their attending to it. Advertising is an indirect manner of turning a possible client towards the advertised merchandise or service by supplying information that is designed to consequence favorable feeling, what we will name a positive trade name attitude. This favorable positive trade name attitude so helps put the consumer on the way toward seeking out the merchandise or service advertised. ( Percy, Rossiter, Elliott 2001: 3 )

For advertisement to work efficaciously a person- our possible and future client must hold the chance to see or hear the message, they must pay attending to it, understand what is being presented, and so move upon the message in the coveted mode ( Percy, Rossiter, Elliott 2001: 5 ) .

Starbucks is good cognizant that there is a loss in some of their clients in the UK. The British citizens believes in the usage of truth, the moralss and the morality these are some of the basic values that they have and they strongly believe in them and desire to go forth with such moralities. If there is something that they do non like they will surely do the concern aware of that ; and that ‘s precisely what they did in December and the months that followed. Coffee is now more than of all time a drink that most British drink but they still continue imbibing their favorite tea and that has gone a long manner to alter now. For Starbucks is a java concern in general that provides other drinks as good they need to stand out of the crowd to win the doomed clients back and to make that they can utilize really good advertisement. Their adverts now need to be catchier than they of all time are and need to be adapted to the English criterions.

The followers is an advert that can be used from starbucks to seek and reconstruct their repute. There is a stating that some see the glass half empty and others half full ; some of the clients will take after the incident to take their concern else were, they might wish their new milieus or non so they might return after really carefully believing. Starbucks makes it their purpose that they will seek and animate one client, one cup of drink and one vicinity at a clip. They say that their shops are a welcoming 3rd topographic point where one can run into up with friends or household, bask a quiet minute with their ego ‘s reading books or merely merely happening themselves in a familiar environment in a new metropolis ( Starbucks, 2013 ) . Starbucks can return back to their basic values the clients doing them experience that they are ever their first precedence while making concern jointly. A cup of newly poured java will automatically do some readers to desire java ; – which in this instance they can merely walk in a starbucks store and gustatory sensation the singularity of the drinks available to them.



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