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Marketing Plan for StarbucksExecutive summaryStarbucks is one of the fastest growing coffee stores in the world now. It has built its market position with a linkage to customers by providing a place for them beside work and home, where people could relax and enjoy themselves. However, providing excellent customer service is not an easy task. I will briefly summarize problems that Starbucks facing and suggest what action should be taken to keep it in continuing improving customer’s satisfaction and strengthen its market position. Consequently, from the product periodic theory, starbucks are mature.The following is a vote for the reason of customers to choose Starbucks:1.Sorry, I don't like Starbucks at all.………………………………………………4%2.No like or not, I feel indifferent to Starbucks.…………………………………4%3.What is Starbucks?………………………………………………………………1%4.I just like Starbucks, but don’t know why.………………………………………1%5.I like Starbucks because of its tasty coffee.……………………………………12%6.I like the easy atmosphere in Starbucks.………………………………………34%7.I like the culture and the value of Starbucks…………………………………23%8.I like reading and surfing the Internet while drinking the coffee.……………13%9.I go to Starbucks because the most of my friends like there.……………………5%Current marketing situationCompanyStarbucks company is the largest coffee chain store in the United States. In a short span of twenty years, it has created a very valuable brand in the world. The core business of Starbucks is selling high quality and various types of coffee drinks, and it also has tow brands of bottle selling coffee drinks, Frappuccino and Starbucks double shot. A research shows that the revenue of Starbucks is growing by 20% per year and it is opening 3 stores per day over the world approximately. Starbucks has achieved a net increase in revenue of 2.4 billion dollars and it has expanded the business with opening 668 stores located in the different countries. Starbucks is successfully managing its operation through franchising in order to achieve steady market growth in Restaurant chain enterprises. In addition, Starbucks has achieve a competitive advantages by reducing delivery and management costs, shortening customer lines at individual outlets and increasing foot traffic for all the stores in every area.Picture1: Frappuccino picture2：Starbucks double shotMacro environmentIn China, per capital coffee consumption is increasing, but the income is on the decline in recent years. On the global scale, international coffee crisis due to overproduction, rising stocks, declining prices, elimination to coffee farms may result in a threat to Starbucks. As a result, Starbucks has to increase the price of coffee. Target customerStarbucks is able to meet a wide need of customers in different backgrounds and ages. The high quality coffee drinks, harmonious environment with good music, comfortable sofa and chairs, and warm services to attract consumers to pay for a cup of coffee and stay for a while. Starbucks mainly targeted at customers who has developed a strong brand to retain a large group of loyal customers.Competitors analysisMcDonald cafe introduced its espresso beverage products in 2001, and the price is relatively low than Starbucks. It affected Starbucks’ market share through providing various fast food at a low price. Although Starbucks still can maintain its dominant position in Restaurant chain industry, there was a 20% decrease in its value. The cost of Dukin donuts coffee drinks is about 20% lower than Starbucks. By selling donuts coffee drinks as its main products to attract customers. Dukin is national chain to serve fresh coffee, cappuccino, latte and other coffee drinks that similar to Starbucks provided. Other competitors are local small coffeehouse, and other new product line. Current market performance and objectivesPerformanceStarted in 1985, Starbucks with $400000 as seed money. After four private placements, it had financed $29 million and arrived on NASDAQ in June 1992. From now on, its average annual sale’s growth reached 20%, and the average annual profit’s growth reached 30% , stock’s price rose more than 30 times.ObjectivesStarbucks expects to achieve at least 6% growth margin in its store sales and expand its business with opening additional 1700 stores by the end of this year. Overall, the objective of Starbucks is to become a worldwide brand and further strengthen its mission to be the leading specialty coffee retailers in the world. Regarding to the aspect of customer service, Starbucks will continue promise of a perfectly made coffee, and goes far beyond to human connections.SWOT and issue analysisStrengthStarbucks Corporation is a very profitable organization, earning in excess of $600 million in 2004.The company generated revenue of more than $5000 million in the same year. It is a global coffee brand built upon a reputation for fine products and services. It has almost 9000 cafes in almost 40 countries. Starbucks was one of the Fortune Top 100 Companies to Work For in 2005. The company is a respected employer that values its workforce. The organization has strong ethical values and an ethical mission statement as follows：Starbucks is committed to a role of environmental leadership in all facets of our businessWeaknessStarbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time. The organization has a strong presence in the United States of America with more than three quarters of their cafes located in the home market. It is often argued that they need to look for a portfolio of countries, in order to spread business risk. The organization is dependant on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise. OpportunityStarbucks are very good at taking advantage of opportunities. In 2004 the company created a CD-burning service in their Santa Monica (California USA) cafe with Hewlett Packard, where customers create their own music CD. New products and services can be retailed in their cafes, such as Fair Trade products. The company has the opportunity to expand its global operations. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge. Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.ThreatWho knows if the market for coffee will grow and stay in favour with customers, or whether another type of beverage or leisure activity will replace coffee in the future? Starbucks are exposed to rises in the cost of coffee and dairy products. Since its conception in Pike Place Market, Seattle in 1971, Starbucks' success has lead to themarket entry of many competitors and copy cat brands that pose potential threatsMarket strategyTarget marketStarbucks has many categories of loyal customers who can be classified into different segments. As the research shows that women customer tend to drink Starbucks soffee than men about 40%, who will buy a cup of coffee from Starbucks in the morning before work, or meet up with friends to chat over a cup of coffee, and most of them will bring child to get some beverage. A majority of target customers are between 18 to 30 years old. Additionally, Starbucks appealed more to students and younger kids recently. So, under 18 years old group of people can be considered a brand new customer which Starbucks has never targeted before.Marketing positionThe market positioning strategy of Starbucks is aimed at providing high quality of service (high quality coffee store). Thus, Starbucks main chose the area near the offices, in order to attack more officers who have a large need of high quality coffee. In addition, the customers not only care about the quality of the coffee but also the atmosphere of the coffee store. In order to meet this mental need, Starbucks built its market position with a linkage to customers by providing a place for them beside work and home, where people could relax and enjoy themselves.Marketing mix1)ProductStarbucks offers a variety of beverages like coffee, hot chocolate, Frappuccinos, smoothies and bottled beverages like water. The company is best known for its coffee variety. In some areas the company also offers seasonal and holiday beverages like the “Eggnog Latte” in Christmas time.Apart from beverages, the company also offers food like pastries, sandwiches and salads. Starbucks merchandise like mugs, at-home brewing equipment like high quality coffee machines and whole bean coffee with fair-trade guarantee are also available. Within the last years Starbucks developed new products for non-coffee drinkers to attract new customers and therefore a bigger audience. Another way of attracting customers is the introduction of “Starbucks Entertainment”. Under this name the company offers a selection of music, for example the in-store music, books and films, by both, independent and popular artists.2)PriceUsually price and quality determines the value of the product. Starbucks always tried to deliver high value to the consumers by buying quality beans, assuring that their staff got effective and efficient training, and mostly, creating an environment to enjoy coffee. For this, the customer had to pay more.To keep the competitive edge, the company also began to offer $1 bottomless cup of coffee, which can be refilled any number of times and 50 cents less than any other Starbucks products. As the Starbucks news site sates, the company is also trying to implement other value added services like, introducing $3.95 "breakfast pairings," which includes breakfast items along with a coffee . This is to target the price conscious customers.In China, by local standards, Starbucks is a luxury. They never wanted to decrease their prices to China when they started. Coffee is not grown in China at large scales –at least not the Arabica beans. When comparing prices to USA, it varies between products depending from where the materials were obtained (locally or imported). 3)PlaceMostly Starbucks is in to direct supply channel (producer to consumer). With their line of vision such practice is important and it helps to keep a personal relationship with the customer. In US, particularly Starbucks can be found in any neighborhood where there is a potential high traffic for its stores –especially with “Coffee bar” concepts. Outlets can be found in various large chains. Their primary goal is to locate them in highly visible locations and opened them in clusters. It was the ideal place for the individuals who are on the go, who enjoy music or even looking for a break in a busy lifestyle.4)PromotionThe main strategy of Starbucks was not to spend money largely on advertising. They used the extra cash on acquiring the best area. Before opening a new store, they organize big community events highlighting each locations personality. Further such information was imprinted on cups and t-shirts as promotion activities.They also established “smart partnerships” with already known local representatives who would act as local ‘ambassadors’ to promote their brand. They introduced Starbucks Cards; aiming their valued customers to promote its products. While buying a gift card, the customer is not only shows brand loyalty, but it also provides free advertising, attracting new customers. They do deliver their services to offices without size restrictions (Starbucks web). Expanding their product mix, they ensure that they are appealing to a diverse customer base. Starbucks also contributes tonon-profit organizations as a way to improve brand image and awareness in local communities.Action programs✧In 2002, a report showed that including Christine Day, recognized thatCustomer’s service needed to be improved upon, and one idea to conquerthis problem was to invest $40 million annually in 4,500 stores.✧According to a survey of customers, 65% believed fast service was a key toattribute to their needs.✧In the past when we thought of adding more labor hours to our retail stores, wedecided against it due to the struggling economy, especially since labor wasalready our biggest expense.✧Another option instead of increasing labor hours is to increase the efficiency ofthe partners that we currently employ. We removed the nonvalue-added tasks,simplified the production process, and manipulated the store layout to take better advantage of store space.✧Additionally, we installed an automatic espresso machine that was faster, reducedwaste, and improved consistency while still fulfilling our customer’s needs. We want to continually implement the use of these machines in more of our stores Financial ForecastFourth quarter earnings are expected to be positive for Starbucks, according to Minyanville news. The coffee juggernaut has made massive business changes over the past year, trying to settle back into that golden formula that made Starbucks everybody's go-to spot for coffee. Not all shifts have been felt by the consumer, who is more concerned with the quality and the price of a cup of coffee, than antics and gravitational shifts made by the world's biggest coffee chain.The coffee juggernaut is certainly active and innovative enough, with good, bad, and questionable ideas to deserve a plus in earnings, but the company that once was welcomed with an open embrace by the public, for convenience, reliability, and cool quotes on their coffee cups, is now fighting the reputation of over-priced coffee and the perception of being a big, fat chain store cliche.ConclusionTo sum up, Starbucks achieved success in Chinese market in some aspects. The date presents that roughly 60% of the total is coffee beverage. So, the coffee is the dairy product of Starbucks. To be more competitive, the product in each store should be high quality and the staffs are required to be friendly and kind.What’s more, Starbucks should reduce waste making drinks to improve productivity and spend some money on customer loyalty program in order to retain customers and build relationships.。
