Starbucks Coffee Company Marketing Plan

  1. Executive Summary

Starbucks is the largest international coffee House Company that deals

with the purchase of coffee beans; process them and sale to its

customers. The company has become the choice of many coffee lovers

across the world because of its quality coffee it sales. Since its

establishment in 1971, Starbucks is the leading in retailing, roasting

and branding of exceptional coffee in the world. The company now

operates in more than 62 countries, and it has 20891 coffee stores

across the world. We offer brewed coffee, snacks, mugs, coffee beans

and expresso-based hot drinks to our customers across the world.

Starbucks Coffee Company entirely relies on its customers for it to

have enough incentives that will enable it realize its set goals. We

also ensure that our employees all over the world are satisfied with

the company’s terms and conditions and also we make sure as the company

that they work in a favorable environment free from any infection or

negative distractions. This marketing plan is a way to shape up our

performance and do some analysis on various sectors to foster excellent

services to our customers. It will also help a big deal to improve and

allow the company running and keep in touch with our customers.

The

analysis of the strength weaknesses opportunities and threats of the

company helped us a great deal in coming up with this strategic

analysis, sales promotional strategies and the marketing plan. The

company is focusing on plans to expand its premises to meet the

customer’s demands, building royalty with our customers and increased

investment on research and technology for the company to come up with

new products and services targeting specific customers.

Starbucks

Coffee Company has also many challenges it has faced for quit sometime

in different countries. Many countries have different economic

challenge that confronts it such as political and socio-economic

factors. Inflation is very common in many countries as a result of

global economic problems that are brought about by persistent increase

in commodity prices and political instabilities in advanced economies.

Competition has been another challenge that needs a proactive approach

as discussed in this plan.

 

Starbucks Coffee

Company also has plans to come up with new and better marketing

promotional tools to enable us do exemplary business in the coffee

market. Our programs have also focused on investing in research and

development in some countries currently not operating.

Mission

Statement

Starbucks currently it has two mission statements, the first

is that when the company started and later they come up with another

one. Initially the mission statement states that: “To establish

Starbucks as a purveyor of the finest coffee in the world while

maintaining our un-accomplishing principles as we grow” Later Starbuck

aIDed to the mission statement which states: to inspire and nature the

human spirit- One person, One cup, and One neighborhood at a time.

Starbuck Core Competences

The core competence of Starbucks is to

effectively use their main product and ensure differentiation

strategies are put in place for high-quality snacks and beverages.

Starbucks also believes in giving the finest quality coffee to its

customers and have the Starbucks experience through high quality

services from its competent and highly experienced staff employees,

clean and highly maintained storerooms that enhances culture friendly

environment where each and every person can enjoy. Starbucks also has a

strong human resource management that cultivates internal and external

good relationship with their suppliers. The employees of Starbucks have

a good and professional horizontal integration aimed at working

together with the focus of achieving the same objective of branding the

number one coffee product in the world.

Situation Analysis

Production Analysis

Starbucks usually purchases coffee beans from the

customer to come and process them as per the market demand or according

to the quality the company is planning to focus on. Although it is

known that the Company deals only with the coffee it also uses other

ingredients to spice up and aID quality to their coffee.

After

processing the products, the company designs the brand that can beat

the customer’s sight. The products after production are kept in their

stores waiting distribution to the final consumers or the miIDle-level

distributors.

 

  1. Competitor Analysis

Starbuck has faced stiff

competition both from domestic and international markets. Local market

is the American market where the company started from the back in 1971

in the Washington DC. Competition is from those companies that produce

substitutes of the products that Starbucks produces. The major

competitors of Starbuck are the Dunkin’ donuts, McDonald’s and Caribou

coffee. These companies don’t make public advertisements about their

products in the market but instead they look for customers privately

through their network of sales persons.

Those who work closer to our

stores always face stiff competition from us because we believe that

the quality can make us move from one step to the other. Starbucks

doesn’t conduct its advertisings more than just like any other company.

The company has a great number of its customers who are loyal to it,

and they help a great deal in attracting other customers because we

assure them that a quality is what we believe in

Our competitors

usually take their brand names to advertise in a specialty area at the

aim of attracting the prestigious class of the customers who are

sometimes our customers. They have another very important weakness of

weak management structure that has partners who are inexperienced in

the selling and advertising industry. We compete with them as experts

and guarantee sales employees with their experience they can bring more

customers to the company as the quality is guaranteed.

Starbucks has

different channels through which it sells its products to reach the

final consumers. Now a customer with the Starbuck app can make online

order and the products he or she has ordered with will be delivered to

their households through our well-networked delivering services. Most

of the customers more especially the old or busy officials use these

services to reasons such as time, flexibility and convenience.

We want

to start outsourcing some of the marketing activities such as where we

want to open a new store room. These places usually are unfamiliar to

us and therefore require those who are familiar and bring them to our

company. This strategy has worked in several countries that we are

working in, and now it is used in our new market in India.

 

Distribution Analysis

Starbucks wishes to maintain its quality of

coffee and further maintain its supply from the actual farmers. The

company wants to attain highest levels of expertise and relation with

the growers themselves. To keep its actual farmers the company wishes

to ensure that it doesn’t pass through the miIDle markets who hike the

prices resulting to high production costs.

Starbucks utilizes multiple

channels to distribute its products across the markets. It means,

therefore that it has several ways of distribution: first is to

distribute them directly to their customers in the company storerooms.

They import the coffee beans and sell them to through their brand

names; Starbucks also sells the coffee to the supermarkets and shopping

centers because they process more than they require. This distribution

enables them to expand too many markets in order to promote their

sales.

The country also considers their customers who are not within

the area of their operation and come up with exporting their products

that will be found in shopping malls and shopping centers. It is meant

to ensure the customer relationship and loyalty is articulately

maintained.

  1. Environmental Analysis

With the new technology

innovation and invention are common in many industries that have a

better future sells. The ever changing internet has brought many

prospects in different industries not necessarily the Information and

Communication Technology. It possesses a lot of challenges to our

markets because our competitors have hired research experts whose

mission is to ensure the taste buds of their customers have something

sweeter than that of yesterday.

Distributors and marketers are busy

looking for ways of selling and distribute their goods and services

through the internet. We have already ventured into such a business,

but challenge remains as new products are brought to the internet

market in a more precise and promising way than expected. Therefore,

this asserts us to make more investments in the online marketing so as

to reach many customers who are away from us.

Starbucks has intensified

its storerooms in the United States and some countries all over the

world. In some countries, you find it difficult to operate a business

due to their strict macroeconomic issues. Some governments in some

economies regulate businesses within their boundaries and in most cases

they usually overtax the foreign company owing to their policies. It

became difficult, therefore for Starbucks to favorably compete with

such companies because already the company incurs a lot of expenses in

the market, unlike domestic companies. Some countries have adopted

protectionism policies to ensure that their companies continue

operating as normal despite economic challenges that flush some

economies or the world economy.

  1. Technological Factors

The present

businesses have been digitalized. As a result, customers and seller

usually make sales and [purchases online. The other competing companies

such as McDonald have adopted a system through which customers do

orders and pay online after which they pick goods from a designated

place, or the products are delivered to the customer to his doorstep

whenever the demand for and pay to such services.

With increased

technological pressure from other companies competing with star bucks,

the company has decided to come up with Starbuck launched the mobile

service portal to enable its customer to do shopping using their mobile

phones. The company allied with the Square company to offer that

communication services to help issues with the Starbuck cards and

easier customer purchase or booking whenever they are away.

Economic Factors

Economically, Starbucks is always depended on the

economic strengths and weakness of the investment countries. It also

depends on the global economy since the company is international. Like

in the 2008 recession the company recorded a poorest economic

development it has never recorded in the previous five years. The

company in some cases triggered by politically such as the United

States bombing that happened in 2001. There was a contraction in the US

economy because the government allocated a lot of resources to fund the

fight against terror in the Asian countries. It was also noted that the

some American citizens with the Asian origin even feared to do business

or walk around since there were intense racial attacks. Starbuck also

recorded serious losses as a result of a decline in sales.

iii.

Social, cultural Factors

Starbucks currently is not faced with any

cultural believes with the consumption of their products. A customer

buys the type of goods that suits his or her needs and buys or ignore.

Some cultures restrict people to drink and eat traditional meals for

preservation of their customs, but they haven’t caused any trouble yet,

we haven’t incurred that situation yet.

  1. Political factors

Starbucks is an international company that established many coffee

stores all over. Therefore, the company is bound to face different

political setups that sometimes make the company flexible to adjust to

such political environments. Sometimes, like in Asian countries a

political conflict may occur thus paralyzing the businesses of the

company. That situation is mostly found in our store situated in

developing economies.

  1. Financial Analysis

This financial analysis

is going to focus on six-year period ratio and growth from 2008 to

  1. The company has recorded revenue growth decline to -5.9% during

the 2008/09 recession but from then Starbucks recorded a growth of from

the financial year 2010 to financial year 2013. In 2012 the company

posted an increase in the sales to 13.7% and in financial year 2013

Starbucks also posted revenue of $24.9 billion. It is a translation of

a substantial increase in sales from 4.9% to 15% in financial year

20098 and financial year 2012. In financial year 2013, Starbucks

recorded a decline in profits as a result of litigation charge of $2.8

billion translating to -2.2% for that year main reason is termination

of Kraft Foods agreements. Looking at Starbucks operational efficiency,

it has recorded a remarkable asset inventory turnover ratio of 1.51 to

5.4 respectively for the financial year 2013. Interestingly the

company’s cash conversion cycle have an increase of 54.7 in the

financial year 2013. The company boasts a good financial health of debt

to equity ratio of 0.29% settles on the current quick financial

ratios.

The impressive financial performance of Starbucks is due to

increase in growth and sales in emerging markets such as South Africa,

Mexico, China and Brazil. The Company has some inroads towards the

Chinese market to explore some aIDitional untapped opportunities in

that economy. Starbucks is currently tailoring its formats to identify

the available markets and know its preferences and tastes to enable the

company identifies the right product mix that will suit their needs.

In

plans towards realizing a better financial outcomes, the company is in

plans to transfer its competent and capabilities all over the world as

profit drivers for global expansion way.

Starbucks has a great

opportunity growth in tea and fresh juice product mix; these products

are building up with coffee to increase the taste of their products

away from other countries. It is in a bid to capture and reach the

customer‘s shift to like snacks and beverages as a change in

lifestyle.

Coffee beans form the most important input to the Starbucks

Company. Over the years the prices if coffee beans have been escalating

thus creating price volatility risk. This creates a risk of investing

in implanting the effective hedging strategy.

Starbucks has been

concentrated in the United States markets and now it is looking for

opportunities to invest in rural areas where opportunities seem to

present it. They are a lot of opportunities in rural areas, and this

had been discovered when Starbucks started using its mobile app to do

business where many customers requested for delivery of the company

products to the interior parts of the rural areas.

Other financial

options are being explored to ensure that the company continues to

record more financial returns favorable for its future expansionary

plans. Starbucks is also in plans of exploring the Asian and Africans

markets to explore seemly fertile opportunities. Current according to

statistics, there is a growing demand in snacks and that has been

characterized majorly in tourists and those who are traveling.

Starbucks cannot hesitate in investing in such places where

opportunities seem to present themselves.

  1. Opportunities and

Issues Analysis

The company has made tremendous successes moving closer

to set objectives. According to many market analyses that have been

conducted our products are better placed in the market than any other

companies that are competing with us. Therefore, we have laid down

programmes for enhancement of our production and embrace a continued

value aIDition for our products to gain more customers in the market.

So far, we haven’t encountered any serious weaknesses apart from the

last financial year’s historical sharp decline in sales which

translated to decrease in sales

The company explored many opportunities

both locally and globally to ensure that we cut on the cost of

production that has become today’s threat towards making real returns.

In a few days to come the company has organized to start accruing raw

materials from our neighborhood sources. This decision was made in

order to cut on transportation costs remember the cost to transport raw

materials has gone up due to increasing in fuel prices. Internationally

the company is likely to hire sales experts to explore the market for

our product in the internal market the country is partnered with in

business.

Issues Analysis

The most critical issue that the Starbuck

Company is facing is the repeat of business. Our businesses don’t

change or shift to start another business. Therefore, we must have to

make sure that our customers get their regular satisfaction and more

importantly come up with new products to better the tastes with the

focus of increasing the sales.

Our competitors usually exhibit an

unfair competition by merging to form mergers so that they can have

influential in our sector. Sometimes they give false information

concerning our businesses citing that we merged, but many of them are

aware of such business tricks in the market. We have foreign customers

who sometimes visit the countries where we have store rooms and find it

difficult to reach us because of the misleading information that is in

the market regarding the mergers. Many believe that we joined a long

time ago with other companies but in actual sense we have not merged

with any company.

 

 

  1. Starbucks SWOT Analysis

Strength

Starbucks

gives highest importance on the quality of goods and services they

produce to give maximum satisfaction to its customers. No matter the

production cost we meet the quality must be assured to maintain

customer loyalty to the company. Their product portfolio caters for all

age groups and needs of varied demographic factors.

Starbucks has a

well-established and competent human resource department that ensure

its employees give the quality and excellence services to its

customers. Employees of the company are the best asset of the company.

Offers training and workshops to equip their employees with the

necessary skill required in the industry. Educate workers in this ever

changing market mechanism enhances a boost and greater customer

services opportunities.

Starbucks promotes goodwill and social

responsibilities to its neighbors where they operate any business. In

areas where their stores are situated they focus on recycling and

reducing the wastes. This is not only done for the neighbors of the

Starbucks community but also to adhere to the call of UNEP to keep the

environment clean.

To maintain the customer loyalty Starbucks has a

reward program and Starbuck card to keep the customers coming to

increase their chances of regular visits by its customers. The

customers can access their services in mobile outlet; this is to ensure

that all customers are reached and do business with the company.

Weaknesses

Starbucks has a problem with overdependence on the United

States market. The origin of the Starbucks is in America, most of the

company’s outlets are in America hence the company relies a lot on the

economy of the US. If the United States economy records a decline

economically it translates to a decline in the overall sales of

Starbucks.

Starbucks has a culture of making American/European coffee

flavor meaning it meets a lot of market problems when it comes to doing

business in other countries. It takes a lot of time for the customer to

adapt with the new product in the market that translates to small

sales.

Due to the nature of Starbucks to maintain quality products,

Starbucks choose to buy very expensive goods to meet such status.

Therefore, they become expensive in selling their products and

sometimes the customers find their way to other retailers who are

selling same products at cheap prices.

Starbucks has a great

corporation image which renders it to thorough scrutiny those forces to

engage itself in social responsibilities that enhance tight control

over labor practices.

Opportunities

Starbucks has an international

experience of entering into a new market with its extensive strategies.

It has made many markets in many parts of the world where India joined

the list recently.it has a large financial base which enables it to

expand and explore the market and make investments.

The product mix the

company is offering to its customers focuses to satisfy the demands of

certain demographic factors. Product mix expansion enhances increased

in sales as different customers will meet the products they need in

their stores.

Technologically Starbucks has a mobile program that

encourages the customer make payments through from their mobile phones.

The reward program is simplified; the company partnered with Square

communications and introduced the Starbucks app for that matter.

Starbuck does brand extension, and it has branded its image beyond its

horizons lines, and it has also ventured into product diversification

while keeping the brand dilution risk at check.

Threats

There are a

lot of competitions from other companies that are producing the same

products such as that of Starbucks. These companies price their

products lowly as a trick for customer to trade with them. Some of its

senior most competitors include the Dunkin Brands, McDonalds, Costa

Coffee, and Donut Products, pop, mom and Pete’s Coffee.

The global

coffee market also is another threat because its prices keep on

fluctuating thus posing a threat of predicting the future coffee

market. It also brings about the problems of pricing the products

produced at the present and in the future.

With the changing in the

lifestyle of the people, Starbucks also must invest more on research

and technology to meet market demands. Competition in the market

usually focuses on coming up with new brands with enhanced sales.

During the world economic crisis Starbucks faces many challenges

because the advanced and less developed countries were forcing it to be

tied on the budget due to economic hardships.

  1. Product Choices

Starbuck produces a wide variety of goods produced from coffee beans

and other raw materials such as tea and strawberry. They produce a

variety of products ranging from breakfast snacks, teas and children

drinks, coffee drinks and lunch items. The brands under each category

are many and therefore the list is very long.

  1. Marketing

Strategy

Starbucks since its beginning in 1971 adopted competitive

market mechanisms to enhance it can lead the market for the goods it’s

doing business. The company strives to induce quality in all sectors

starting from production, marketing and sales. The marketing sector has

been doing exemplarily better in the coffee market. It is the number

one coffee finest company in the world. Their investments and market

expansion it has created manifests the dominant market strategies it

has put across for enhancement of its lead in the market.

Starbucks

have ensured that customer satisfaction is their number one strategy.It

is through giving customer the quality product they need and give them

the best services they require. The managements also focus on the

employees who are working there, and they tackle them to training and

workshops to aID more skills and expertise to improve on customer

services. They also ensure remunerations of that worker’s sell and

accordingly. It will improve the quality of their services thus

increase the overall sale of the company.

Starbucks as also used a lot

of resources in marketing its brands across the world using different

media currently the company has so many websites on the internet that

are used to advertise the company products across the globe. It also

advertises using local publicity channels such as radios, TVs, and

billboards to make the customers aware of the products they offer.

Advertisement by a significant margin promotes sales and expands the

market for goods and services.

Starbucks has invested a lot in research

and extension services, these results to innovation and invention of

products in the market. Change creates an expansion in the sales of

their products. The customer tastes and preferences taken care of to

maintain them all the time. Design of new products also ensures that

new products have entered the market, and the customers can access them

and if found viable, sales can be made. Starbucks is also aiming at

creating an the interconnection between and among its customers and if

possible for customers to look for others and introduce them to the

market.

 

  1. Market Implementation, Evaluation, Ethics, social

responsibility and Control

Starbucks has an excellent leadership team

that will be able to implement the above recommendations as outlined by

company managing board. The company should cater for diversified

cultural ties that their people are accustomed to. Starbucks employees

are critical to our organization because they provide the company with

real sales hence enhanced profits. The company also regards the

customers as our family because they are purpose and reason as to why

we are doing business. Customer satisfaction should be our core

objective to our company. Every member of the Starbucks company our

customer tops the priority list.

Starbucks should maintain its ethical

and social responsibility in order to foster and exhibit high-level

expertise in the industry is doing business. They should at all times

concentrate at their core values of ethics and continue with their

exemplary lead in the market of snacks and beverages.

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