Starbucks Marketing Strategy - Assignment Example

Starbucks Starbucks is adjusting its marketing strategy and taking a risk. This paper seeks to analyse all the external environmental forces that affect the Starbuck’s strategic marketing plan. More so, the paper will detail the dynamics, success, and challenges facing the implementation and operations of the new marketing strategy. What forces in the external environment are influencing the changes in Starbuck’s marketing strategy? Explain. The PESTEL analysis derives all the external environmental forces that influence a business strategy. They include social, political, economic, legal, technological, and environmental forces. All the external environmental forces influence the changes in Starbuck’s marketing strategy. The economic forces determine how the entire economy affects the business strategy in terms of market rates, globalization, interest rates, taxation, inflation rate, and the economic growth. In the case of changes in the Starbuck’s marketing strategy The political forces determine how government policies affect a business strategy. In the case of changes in the Starbuck’s marketing strategy The technological forces determine how technology advancements that may include automation and technological advancements affect the business, production, and decision-making. In the case of changes in the Starbuck’s marketing strategy The legal forces define how societal legislation affects the business. In the case of changes in the Starbuck’s marketing strategy The social forces determine the behaviour and beliefs of the consumers, households, and the general society. In the case of changes in the Starbuck’s marketing strategy Environmental forces define how environmental factors like weather, climate change, and climate affect the business. In the case of changes in the Starbuck’s marketing strategy 2. How are the components of Starbuck’s marketing mix being used for implementing market strategy? The elements of marketing mix include price, product, promotion, and place. Price relates to the idea that the product sells at a price, which is competitive and profitable. In the Starbuck’s marketing mix includes a pricing strategy that relates price with location. Actually, USA and UK absorb the highest prices for Starbucks products and other location buy coffee at convenient prices. For example, the breakfast sandwich costs between $3.99 and $5.99 depending on location. This enables the company to make profits as well as remain competitive in the market. Furthermore, product defines the suitability of the physical attributes of the product, their uniqueness, their benefits, and functioning. Starbuck’s has a reputation of producing fine products and offering satisfying customer service in all its outlets like the made-to-order gourmet sandwiches. Indeed, Starbucks’ breakfast sandwiches are of much higher quality than those of its competitors. On the other hand, place defines the availability of the product to the customers at the right place and at the right time. Ideally, there are about 9,000 cafes in almost 40 countries in the world, which avails Starbucks’s products to its customers at the right place and at the right time. Additionally, Starbucks’ tests its products in multiple locations before distributing them. Finally, promotion refers the mode of communicating the features and benefits of a product to the customers. Indeed, Starbucks promotes its products through advertising, miniscule local advertising, internet blogs, support programs, websites, and offering unique coffee. Actually, there brand coffee forms part of the promotion as customers advertise it through talking. 3. What are the main factors favouring success for Starbuck’s crossover into the affordability market? Starbuck’s adopts market segmentation that refers to the process of subdividing the total market into unique market groups that relate to people with similar product needs. The segments include geographic segmentation, behavioural segmentation, and psychographic segmentation. However, despite these se4gmentation, Starbucks’s treats its customers equally. Starbuck’s sells features many different products in its stores including coffee beverages and food in about 9,000 cafes in almost 40 countries in the world. Starbuck’s target market include social classes, the working class socializing between home and workstations, young college students, neighbourhoods that can freely afford buying a $3 cup of coffee, and recently every individual of every age. Some of main factors favouring the success of Starbucks’s include creating a unique and relaxing experience and atmosphere for its customers, emphasizing on customer satisfaction and product quality, international recognition, environmental consciousness, Starbucks corporate social responsibility, strong ethical values and mission statement, the interactive Starbucks’s community, brand marketing, innovativeness, and strategic partnerships. Notably, members of Starbuck’s target group are mostly adults from the urban areas with disposable income and high levels of literacy. Indeed, they have gone ahead to diversify their product lines by establishing brands for every individual of every age. Ideally, firms develop new lines of products to increase their competitive advantage, increase the customer base, increase turnover, and profits, and reposition the company in customer’s mind. 4. What prominent factors suggest major problems or even failure for this crossover attempt? The success of product development is not absolute. Factors that suggest failure in crossover attempt include lack of the desirable attributes, lack of uniqueness, and lack of customer’s knowledge of the new product, wrong target market, and loss of market share as in the case of Starbucks. 5. Applying this chapter’s definition of product value to Starbuck’s plans, what are the benefits in Starbuck’s affordability offerings? What are the costs? Product values refers to the business assessment on the worthiness of a given product in relation to size, satisfaction derived, variety, reliability, performance, quality, design, and durability. Indeed, we can know what customers want through customer’s feedback on purchased products, customer’s responses to enquiries on perceived new products, and sales turnover on new products. Product features relate to quantifiable and physical attributes of a product or service marketed and sold by a reference company. These may include size, weight, speed, shape, durability, height among others. On the other hand, value package means all the factors a customer’s considers before purchasing a product. In this context benefits in Starbuck’s affordability offerings include customer satisfaction, relaxing experience, and exclusivity of new food products like the made-to-order gourmet sandwiches and breakfast offers. However, these come at a cost evading taxes, huge capital, and loss of market share. Indeed, Starbuck’s customers expect to receive greater value, the younger generation call for brand affiliation, and want more benefits and features at a reasonable cost. Actually, the consumer requests for organic coffees and increased competition from Nestle, Tim Hortons, and Dunkin Donuts necessitate the request for better product quality. 6. In what ways, if any, does Starbuck’s plan for closing some existing stores and opening fewer new ones have any impact on the product value of its new affordability products and its more-established luxury products? The company’s’ decision to close some of the outlets that are not performing and choosing to open new ones in new target markets is likely to win the company new customers and earn brand loyalty for its coffee in case of proper product positioning. Proper product promotion in the new market leads to brand expansion, which is likely to benefit the company’s product in case the new market accepts the coffee. New markets are very important to a company due to geographical variations, in case they favour the company’s strategy, especially if it opened the branches in cold regions. People in such places are likely to consume coffee more than hot places. Conclusion The company does not necessarily have to benefit by its decision to change its marketing mix. The various environmental factors facing the company could easily frustrate the company’s plans of increasing its revenue by choosing to change its marketing strategy. It is true that the company had done a feasibility study to ensure that the strategy would work out, but still, chances of the company making losses out of the strategy are still there. Definition of “Key Terms” Brand loyalty is the benefit a company’s product enjoys when people decide to use a particular product by a certain company without the influence of either prices or other products in the market Product positioning is a marketing tool that aims at presenting the product by use of the most attractive manner possible that is likely to appeal to the target customers. Brand expansion is a marketing strategy of a company’s products where the company decides to seek for new markets for its products. Product promotion involves different methods and ways of marketing a product to the potential customers by either subsidising its prices or offering, other fringe benefits such as Target market is a new market that the company is aiming to explore, that it has never explored in the past, by introduction of its products. A geographical variation is the difference in the characteristics of people due to difference in climate or weather conditions, difference in altitude Works Cited http://www.tutor2u.net/business/gcse/external_environment_introduction.htm http://home.kku.ac.th/petmas/External%20Scan.pdf http://www.voteforus.com/starbucksmarketingstrategy.html http://www.marketingweek.co.uk/brands/starbucks/ http://prezi.com/-wbq41qvoezi/starbucks-marketing-plan/ http://www.udel.edu/alex/chapt9.html http://www.scribd.com/doc/9683015/Starbucks-Campaign-Market-Analysis http://www.udel.edu/alex/chapt11.html http://www.franklincollege.edu/pwp/BOdom/SampleWorkStarbucks.pdf Back page RUBRIC: 5 1. 5 2. The answer to question 2 clearly identifies the components of Starbuck’s marketing mix that are being used for implementing strategy. 5 2. In the process of identifying the components of the marketing mix key business terms are used and each key business term is clearly defined. 3 3. In the answer to question 3 all of the main factors favoring success for Starbuck’s crossover into the affordability market have been clearly identified and stated. 3 3. In the identification process key business terms are used. 3 3. Definitions are provided for each key business term used. 3 4. The answer question 4 identifies all of the prominent factors that suggest major problems or even failure for this crossover attempt 3 4. In process of identifying the prominent factors that suggest major problems or even failure for this crossover attempt key business terms are used. 3 4. Definitions are provided for each key business term used. 3 5. Question 5 is answered, fully supported, and has a clear statement concerning why this is your position. Your position should reference any “key terms” from the chapter and provide definitions for each term used. 2 5. In the second part of question 5 the answer reflects the costs involved using “key terms” and included definitions. 4 6. Question 6 is answered and fully supported with information found in the chapter using “key terms” and definitions. 5 The paper clearly contains a closing statement. 5 The paper contains a “Work Cited” page that includes the textbook and any other materials that were used for the purpose of researching this paper. Additionally, the “Works Cited” page provides evidence that research was done including authorities in the field of business. Read More