Introduction
Some brands are synonymous with quality and success and their name becomes connected with the product, Starbucks is one such organization with such attribute and when coffee is discussed it becomes synonymous with Starbucks.
The success story of Starbucks was started in 1987 and ever since its launch it has become the world’s foremost retailer and roaster of coffee. Based in Seattle, USA, it is an international chain of coffee of great repute.
Starbucks has no parallel in the domestic market and is a strong player in the international market in view of its outstanding operational capability, innovative coffee products, impeccable team culture and the most significant feature in the food and drink service industry i.e. customer service.
Successful companies have the ability to diversify their business in order to cater to new market segments and solidify their brand equity in the eyes and minds of the consumer. Starbucks has also diversified with time and the product line has been boosted with the addition of Tazo Tea, soda and juices in their beverage line.
Besides, Starbucks also diversified into pastries, with the roasted coffee as a business already there since the launch.
As stated in the introduction of the case study, after having coffee at the Universities popular café and noticing the difference in presentation and taste the two primary questions in lieu of growth in best way and also an overextension which may not be the best way forward.
Marketing Strategies
Primary and Secondary Target Market: The target market of any business defines the success and failure of a business in view of the fact that it is of vital importance that a business identify their target customers and then tailor their marketing communication accordingly.
Starbucks as an organization as mentioned in the case study has their primary and secondary target charted out in terms of the coffee consumption patterns in the US.
The recent surge of coffee as stated in the case study with regards to the year 1996 and onwards was attributed to healthy lifestyle fad which is still one of the reasons for coffee consumption and networking which Starbucks envisioned perfectly and replacement for alcohol.
The primary profile of Starbucks coffee as reported in the case study is the age group of individuals 30-59 and the secondary profile age is form 20-29. It is important to note that in the case study the reason consumers prefer Starbucks is that once they get a taste of a better coffee they don’t usually go back to their previous choice of average coffee.
The primary target market accounts for Starbucks is in essence to their need for networking and having rendezvous of their choice.
The secondary target market is of young adults in view of the products features in terms of fatigue due to studies and also a cool image of the brand and also a place to network.
The Marketing Program:
Starbucks marketing program has been one of the major factors in its success and the communication is in essence geared towards the potential opportunities in meeting the needs of the customer wants of the target market through a sense of affiliation and a strong sense of emotive connect.
Starbucks marketing programs shows what the company is all about in terms of the company’s core values and equity as on the top most organization, brand persona in terms of product innovation all through the year’s in an effective manner.
As in the words of the dynamic CEO of Howard Schultz, Starbucks has no patent on anything done by the company and it can be copied by any other business, in view of the fact that the culture, operational capability and heart and soul cannot be replicated by any other business which is the key to Starbucks amazing success.
As stated in the case study the above mentioned was the need of the hour in terms of brad equity and creating an experience which was done with success, by creating an immersive experience in the retail stores as elaborated by Scott Bedbury the Senior Marketing VP.
With strong competition from Caribou, Best Coffee and Second Cup the primary marketing strategy that was taken into account by the dynamic CEO Howard Schultz according to the case study by increasing the presence in different markets of Starbucks and also by creating a brand imagery in the minds of the consumers for Starbucks as the coffee brand.
The specialty sales is also a strategic aspect which has helped Starbucks develop in an manner as per the strategic intent of the hierarchy vision,
The marketing program requires the identification of the target market which has been done already and then develops a successful marketing mix for the target market. The 4 P’s of Starbucks has been developed in such a way that to create a successful marketing mix.
The Product starting with roasted coffee was sold to consumers, however with the introduction of Howard Schultz led the company to scale great heights by fostering a great product line product line of coffee was expanded to include espresso drinks such as lattes and cappuccinos; and as the company grew, the drink choices also grew to meet the consumer’s needs.
The Place aspect of the marketing mix is one the major success factor for Starbucks as the main focus was how to elevate the customer experience at Starbucks and hence, the big idea of Howard Schultz was networking of consumers over a cup of coffee and the vision was to create a space flanked by home and work in a peaceful yet exhilarating store setting which has been done successfully.
The Promotion of Starbucks was done with regards to defining Starbucks brand image and that was done through grand scale national advertising and other brand leveraging activities which were essential to promote Starbucks in lieu with the plans of expanding according to Liz Sickler, Starbucks Director of Special Projects.
Starbucks is a poignant image of an organization based on a great culture, which separates them from the rest of the pack and has made them an icon in the industry. The customer service has been a major reason in the success as mentioned in the case study.
The Price of the Starbucks is based on one aspect which cannot be replicated but it is fostered with consistent customer service and therefore ‘experience’ is one thing which has been incorporated in the price of a regular Starbucks coffee cup, since the launch.
The product quality, the store ambience and the excellent customer service compel the consumers to buy a $1 product into an $8 experience and therefore as stated by Howard Shultz Starbucks establish the value of buying a product at Starbucks by our uncompromising quality and by building a personal relationship with each customer.
The strategies that will be implemented by the author will a ‘TV Communication Campaign’ for Starbucks.
Branding and Positioning Strategy
The primary aspect of any business is the brand and it is the statement of the organization’s personality which creates an impression in the minds of the consumers and allows the consumers to engage with an organization products and services in a more connected and emotional level.
Starbucks has been able to create a brand that resonates with the needs and wants of consumers in a satisfying manner and how Starbucks has leveraged its key success factors of product innovation and in lieu with successful marketing analysis and the subsequent implantation plan.
The key focus of Starbuck is for the customer’s it caters to; marketing management takes the lead in researching the customer and the markets, in order to promote strategies and make them a coffee user.
The branding and positioning strategies success and the role of the Starbucks management has been critical in view of creating an image through the decisions made that carry the business both in the short and long run and also a set of decisions that helped the organization in bad times.
An organization of the magnitude of Starbucks has to explore and comprehend the strategic initiatives in terms of brand’s standing in the market and the feasibility of a way forward in a profitable way.
A marketing analysis is conducted in order to come up with the internal and external issues of an organization.
The branding and positioning is based on the SWOT analysis of Starbucks:
Strength: The strength in terms of the branding and positioning of Starbucks is based on the most important aspect which creates a differential advantage for Starbucks against any of its competitors is ‘taste’ of the coffee, outstanding customer service and pioneering service provided by Starbucks for its consumers in tune with the business environment. The retail strength, merchandise strategy, supply chain operations are also strong point of the company.
The leadership of Starbucks is also one of its primary strength in view of leading it the right way both from a branding and business perspective in terms of revenues and setting up a base for a strong financial foundation which serves the company well.
As stated in the case the acquisitions with big giants like Pepsi etc, have helped Starbucks gain considerable brand mileage.
It has also diversified into food items such as sandwiches and pastries to complement the coffee.
Weakness: The focus on International retail expansion has limited the domestic growth and also in view of the prices the consumers though brand loyal, still try out new coffee brands that are being launched.
Opportunities: Acquisition of other brands in terms of increasing the brand portfolio is one of the major opportunities for Starbucks. Merchandising and specialty sales are the options which need to be considered seriously in terms of generating revenues from a corporate level.
Cost reducing initiatives is also one aspect which will help in improving the margins in terms of profits on a global basis. Ready to drink coffee is also one opportunity which needs to be taken into account by Starbucks.
Threats: The primary threat to Starbucks is the chains of coffee houses that have modeled their operations of Starbucks, but are price sensitive which may lure a certain segment to them. As stated in the case study the product based and retail based competition are getting stiff and are the biggest threat to Starbucks operational efficiency in terms of branding and revenues.
Increased wages as required by law with regards to minimum wages law have also impacted the overall profit margin and the operating margins.
Marketing Implementation
The strategic perspective for Starbucks as suggested by the author is a TV Communication Campaign in view of Starbucks vision of nationwide advertisement campaigns to promote Starbucks brand value and image in the minds of the consumers.
The activities which will be undertaken in view of the marketing strategy will be based on the corporate umbrella of Starbucks product in the portfolio which includes all other products besides coffee and coffee itself both in terms of retail and roasted coffee.
The specific marketing activities in view of a TVC Campaign will be the shooting of a commercial in view of project exotic touch.
The campaign will be developed in lieu with the advertising agency and will focus on the Starbucks corporate strategy of increasing the brand image and also increase the presence in different markets. The focus of the campaign will be is to support the new communication aggressively. The need in to come up with an Idea which should be unique and eye-catching
- Interactive and Engaging
- Creating a sense of belonging and affiliation with Starbucks as a Premium Coffee brand
The Big Idea thus to promote the Starbucks strategy will be ‘Starbucks Tribe’.
The dynamic of the communication will be to connect people with regards to affiliating them with a big brand and creating a whole new world of Starbucks coffee users.
Since the intention is to create Starbucks in different places as mentioned the copy and the idea will connect the people not only in US but all over the world to create a global tribe of Starbucks coffee users in an effective manner through visual aid supported strongly with the copy of the campaign.
An on-ground activation campaign for Starbuck‘s new TV commercial – new brand positioning
- ‘Starbucks Tribe’
- Establishing live contact with the consumers globally - working out on the key product benefit as a Coffee – “physical stimulation through a cup, satiating good coffee pangs”. Besides the following will be given as giveaways to the participants all over the world to create buzz and excitement amongst the consumers.
- Branded Mugs
- Branded Friendship bands
- Branded Caps
- Branded Shirts
- Branded Coffee Mixer
The merchandise section of Starbucks has been taken very seriously by the management, as stated in the case study.
The activities since being an online initiative will be promoted online through company website and in retail stores both in town centers and universities and corporate offices to have maximum participation of different target market of Starbucks to give the communication a live feel of a tribe.
They will be performed for a period of 2 months to generate as much participation also in view of a global initiative the time frame is extended.
The marketing and brand team of Starbucks at the Seattle Head office are the main drivers of this campaign and all the related executional mechanics will be circulated globally through the head office team.
The monitoring of the online activation for the marketing campaign will be lead by the Head Office team and all the creative’s and communication for the campaign will be done by Head Office brand team and it will be shared with the local teams of different cities in USA and globally.
The campaign will be adapted as per the local environment of the Starbucks however the main crux of the campaign will be the same all over.
The cost of the campaign will be incurred through:
- The Advertising agency of Starbucks will be paid for the services rendered in view of the campaigns creative’s and the initiatives will be charged as required.
- Media Plan will be made and a significant amount will be spent on choosing the time bands for the TV Ads airing to connect with the audience of Starbucks coffee effectively.
- The other forums which will incur cost will the on ground activation, since the campaign creative’s is already paid. The on ground cost incur will be the cost of standees, posters, banners and streamers in the retail outlet for the promotion of the campaign.
- Every International Center will pay accordingly as per the local rates.
The marketing evaluation and control of the campaign will be done in accordance to the standards set by the head office and being a 2 months campaign will keep in touch with the connect of the campaign has been able to make in the first month and add new in terms of visual aid to boost the Big Idea for the remaining of the campaign to achieve the objective of maximum participation of the consumers.
The evaluation and also the financial assessment of the campaign is interlinked with the overall strategic marketing planning process of the campaign and will assess the new opportunities and threats in view of the completion of the campaign and the studies done by the marketing and brand team accordingly.
Starbucks as a premium coffee house with an amazing array of products and services provided in the retail stores and with an astounding culture of customer service has been leading the way through its promotions to not only keep them connected with the core target audience but also create new market segments.
Work Cited
Richard Ive School of Business (1997). Starbucks. Web. Date of access. 5 June 2014
