STARBUCKS

Starbucks



Starbucks

Introduction

The purpose of this report is to conduct market analysis and recommend appropriate marketing strategies for Starbucks Coffee.

In the report, we will first look into Starbucks's goal, its product and markets. Then we will look into the key actions and decisions that lead to the success of the company. After that, we will discuss the issues that Starbucks is facing in this competitive global market. For each strategic issue, appropriate marketing recommendations for the company are made respectively. (Peter 2009:65-78)

Background And Situation Analysis

Starbucks Coffee starts in 1971 with a single store in Seattle's Pike Place Market. Today, they are privileged to welcome nearly 35 million customers on a weekly basis, in more than 12,000 stores around the world.

“Starbucks Experience” is a third place after home and work with superior customer service, clean and well maintained retail stores which reflect the personalities of the communities in which they operate. Starbucks strategy for expanding its retail business is to increase its market share mainly by opening additional stores in existing markets and to open stores in new markets. In support of this strategy, Starbucks opened 1,040 new company operated stores in fiscal 2006. (Sandhusen 2007:36-58)

During fiscal 2006, Starbucks Coffee Company operated retail stores accounted for 85% of total net revenues. In addition to company operated stores, Starbucks works with certain carefully chosen business to operate licensed stores in various places. Its strategy is to reach customers where they work, travel, shop and dine by establishing relationship with people that share the Company's values and commitment to quality. (Starbucks 2006:15-20)

Starbucks also recently has strategically sold coffee and tea products through other channels such as supermarkets, or non-traditional retail channels such as United Airlines, Marriott International, Holland-American Cruise Line, and Department Stores.

Analysis Of Environment

Target Market

Customers in New Orleans prefer their bagels toasted and those in Atlanta require more seating for a “social” coffee break. This implies that the most important target market for Starbucks are people within this age group. The two largest ethnic groups in the U.S. are white 81.7%, black 12.9% and Asian 4.2%.

Starbucks's goal is to become the leading retailer and brand of coffee in each of its target markets by selling the finest quality coffee and related products and by providing each customer a unique “Starbucks Experience”.

Adults with incomes, college students, etc.

Savvy and avid coffee drinkers

Customers who enjoy the “Starbucks Experience”

Market analysis

To achieving growth and making profits, Starbucks started to go international since 1996. International connections can build a strong foreign presence which helps to increase brand recognition and also increase the domestic business. The more stores Starbucks has around the world, the more loyalty and familiarity can be built among its existing and potential customers. (Sandhusen 2007:36-58)

The following are the macro environmental variables which are likely to impact Starbucks when going international:

Geographical Factors

Starbucks has carefully analyzed various strategies for the placement of its stores. They have developed cost-saving options for these stores to meet the need to adapt to each geographic ...