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Company Information and Background
Starbucks is known as the world’s #1 specialty coffee shop and has around 10,000 stores in more than 30 countries.
Starbucks is known as one of “The Best 100 Companies to Work For,” and was ranked fourth as one of the “Worlds Most Influential Brands”
The Starbucks company website explains that “Starbucks is named after the first mate in Herman Melville’s Moby Dick”
Mission, Goals, and Objectives
Starbucks states that its mission is “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow.”
Starbucks’ goals are to remain profitable and to produce social, environmental, and economic benefits worldwide.
The company’s objective is “to establish Starbucks as the most recognized and respected brand in the world.”
Business Structure
Starbucks is a corporation.
Howard Shultz is the company chairman and Jim Donald is the president and CEO of Starbucks.
Starbucks owns around 6,000 stores and offers licensees and franchises to run additional stores worldwide.
Competition
Starbucks’ top competitors are Caribou Coffee, Diedrich Coffee, and Dunkin Donuts.
Starbucks also competes with popular coffee manufacturers including Kraft General Foods, Procter & Gamble, and Nestle. Kraft owns Maxwell House, and Procter & Gamble owns Folger’s.
External Influences
Target MarketStarbuck’s is a business that is applicable to a
diverse group of people. Starbucks considers itself the “third place – a
place between work and home.” 1
• Suburban young adult• Professional on the go• Age:18-35• Single I
Internal InfluencesNeed Set
For the busy professional, Starbucks products are delicious, affordable and easily transportable goods that may be used for the need of hunger, craving, or caffeine.
For the young contemporary individual may see Starbucks as a trendy location to converse and gather with friends.
Emotional InfluencesEnergy BoostStress RelieverCelebration
Situational InfluencesPhysical Surroundings
DecorWireless internetLighting
Temporal PerspectivesDrive ThroughHours
Decision Making Influences
Brand Loyalty Starbucks is the leading brand and coffee shop out of all
chains and independent coffee vendors, making brand loyalty of customers, a major advantage
Starbucks has a reputation for being a delicious product, making the coffee drinking experience more of an indulgence than a routine
Starbucks offers a wide product line
Hot and cold coffee beveragesTazo teaNon-caffeine drinks: Hot chocolate, apple ciderIce cream, Frappachino’sFood- breakfast foods, sandwiches, dessertsBooks, Cd’s, board games, equipment Gift Cards, mugs
Product Positioning
Strong value propositionHigh-quality productsGreat service
Consumers perceive Starbucks as being the “best” coffee around
Consumers are willing to pay premium prices because of this perception
Great quality and customer service leads to:
Starbucks exceeding customer expectations
High satisfaction levelsLoyal and repeat customers
Pricing
External Starbucks focuses on
conspicuous consumption Designer coffee brand
due to them pricing above the market rate for a cup of coffee
Consumers want to consume a luxury brand
Pricing
Internal Status indicator → “I am
drinking Starbucks; I have money to enjoy a luxury beverage”.
Target market purchases the brand name
Situational Consumers like spoiling
themselves with the Starbucks brand (they feel that $3 for a cup of coffee/coffee beverage is money well spent)
Pricing
Decision Process Factors Each different Starbucks
location is priced differently (because people are willing to spend more for example in New York City, than Towson, MD)
Towson University Starbucks on York Road Pricing Guide
Distribution Strategy Luxury coffee with an
environmentally safe mindset
Convenience (with many Starbucks locations) is what the population segment wants
Starbucks used for business meetings (wireless Internet available at all U.S. locations), a social venue and place to just sit and relax
Distribution Strategy
Consumers are able to enjoy Starbucks wherever they are (multiple locations)
Retail gravitation model (consumer will pick store based on store size and distance from customer)
Brand first, then the outlet second
Promotion Mechanisms
No direct promotionsCommercials
Movie promotions“Akeelah and the Bee”
Walking AdvertisementsCustomers carrying cups
Television Promotions Unnecessary
Several locations
Double Shot Espresso “Bring on the Day” Last aired Spring 2005
Caters to target market
http://video.google.com/videoplay?docid=1264727438510422007&q=starbucks+commercial&pl=true
Customer Service and Feedback
Highly trained employeesEnvironmentally-friendly and conscious to
consumersGreat relaxed atmosphere/ambianceFriendly communications between
customer and employees
Regulations
Coffee temperature-timing of deliveryWarning labels- Notifications of hot
beverage, “Contents: Hot Beverage Inside”
Protective sleeve providedAdditional mission statement for
environmentally sound products
Recommendations
Increase the number of drive-thrusCorporate cateringKeep stores open later at key locations
i.e. high area/city stores
Enhance the retail aspect of the businessAdd more food options in stores