Marketing Strategy - Promotion and Marketing of Starbucks Products - Essay Example

? Marketing Strategy Proposal Starbucks company restaurants have always been the best place where many coffee lovers get a cup of the world’s best coffees. It is a well known international coffee house chain in the world, with over 17,000 stores in over 50 countries (Williams & Curtis, 2006). The company is famous with its famous coffee brand like drip brewed coffee, coffee beans and other cold and hot drinks. SWOT ANALYSIS FOR PROMOTION AND MARKETING OF STARBUCKS PRODUCTS SWOT is an acronym for strength, weaknesses, opportunities and threats.Swot analysis is a plan evaluation technique employed by any business to assess its strategic plans (Lussier, 2012). Mostly strength and weaknesses involves the evaluation of factors related to internal business capabilities, Opportunities and threats keenly deal with the external factors that somehow affect the business. Companies always design a strength assessment to measure their competencies.Here, a business thoroughly evaluate its marketing and promotion objectives for it strength based on its internal capabilities (Lussier, 2012). To optimize the development occurring in the beverage market, Starbuck has failed to perfectly match its strength to the existing opportunities. With its reputation of producing high quality products, which attract potential customers daily, the company has to effectively assign resources to exploit this business. Starbucks need to develop efficient strategies that inform its potential client of its reputation for quality and its close proximity.Secondly, Starbucks should ensure it gives its best sales representative the responsibility to sign up new businesses it has created with its new customers. The company should intensively research on its new prospective customer’s preference (Levy & Weitz, 2007). This will help it appear as if there is a natural match with the new customers thus increasing their loyalty to the company’s product. Starbucks marketing department, based on its strong financial base should utilize its available finances to take on new business ventures. With its profitability and strong capital base, the company should also establish a very strong retail customer base (Levy & Weitz, 2007). This will ensure the company establish new channels to carry its cross promotional initiatives. In a SWOT analysis, companies always assesses their internal weaknesses to identify what they are not able to do based on their existing abilities.Starbuck, in many countries has been facing market penetration challenges. This has solely been blamed on weaknesses of its sales approach. The company need to address this identified weakness by fixing or completely eliminating it. Though it can’t completely eliminate its sales approach, the company can opt to train its sales personnel and allocate them some extra tools (Kotler & Lee, 2005). Secondly, to overcome this marketing problem, Starbucks need to invest in customer relationship management softwares, and then ensure it avails them to its sales personnel. This will encourage the sales people to use the vital available customer information for their sales call. The company should also consider offering training to its sales personnel on the use of CRM applications as this will help them strengthen their sales approach. Many of coffee lovers customers are with time becoming more environmental conscious with their purchasing habits (Ottman, 2011). This is a great opportunity for Starbucks to come up with a comprehensive promotional plan to markets the green initiatives of this company. With such a marketing initiatives Starbucks will perfectly find a favorable placement in the market. Starbucks faces a great market threat from its competitors. To address this threat from SWOT analysis, the company can opt to strengthen itself to meet these prevailing threats (Kotler & Lee, 2005). With its much resource focused to controlling its home market, Starbucks will be stretched to meet the low cost competition from its oversea markets. So, to overcome this threat, the company can opt to keep its presence at the current level without necessarily putting special effort to meet this new, low cost competition. PESTLE ANALYSIS FOR PROMOTION AND MARKETING OF STARBUCKS PRODUCTS Starbucks is hugely affected by political changes experienced in many countries it is operating in. When various countries governments opt to impose tariffs, it does not only lead to efficiency loss to the Starbucks, but also dangerous to its assets. This cause the company to increase it prices thus leading to customers rips off (Burkitt, Zealley & Marketing Society, 2006). So, Starbucks need to thoroughly investigate the stabilities of the regions it plan to invest in. The company should keenly approach new ventures with great caution. Economic factors have great impact on how Starbuck carry its business activities in various countries. Economic factors mainly affect the consumer’s purchasing powers and spending patterns (Ottman, 2011). This has greatly affected Starbucks operations, as sometime they lose their investment in various countries due to economic changes. Customers in various countries, especially developing ones, easily shift from expensive product to more affordable product in case of economy decline. This fact is of great importance to the Starbucks company as it needs to understand how various consumer segment react to various economic changes .To overcome the problem brought up by the ever changing economy, the company should in its marketing plan target countries that are developed, because the customer purchasing power is high in those countries. Even in case of economic down turn, customers will be willing to spend a bit more in return for a quality product such as Strabucks coffee. Socio-cultural factor has greatly affected the value, preference, perceptions and also behaviors of the people in the society. Some time Starbucks marketing plan fails to work as expected due to this factor. Though the company has a perfect marketing plan, sometimes it has failed to consider the influence of this factor, thus leading to losses. To make its marketing plan workout as expected, Starbucks need to identify countries or markets with people who have coffee drinking culture (Bacon, 2008). Their marketing plan should keenly target the university students and employed workers. This is because with the busy routine of life they have, they have turned out to be the major coffee consumers.Thus,by Strabucks targeting these two market segment, their coffee shops will flourish. Environmental factors involve environmental aspect that may hugely affect the whole beverage industry. In their marketing plan, Starbucks fail to correctly identify when to maximize their oversea sales (Bacon, 2008). To overcome this weakness in their plan, Starbucks need to keenly monitor the change in environment. For example, in their market plan, they should allocate more sales personnel in various restaurants in Europe during winter season. This is the time many people passes by the restaurants to have a hot cup of coffee. It provides a very golden opportunity for Starbucks to thrive in the market. Secondly, on the environmental factor, it is evident that with increased concern on environmental pollution, many consumers are going green with their choices.Strabucks should take this as a great opportunity to allocate some funds in their marketing plan for conservation and maintenance of natural resources (Bacon, 2008). With this, they will attract more consumers to their restaurants. Competitor analysis One of Starbucks actual competitor is the Costa coffee. Costa is currently the biggest coffee seller in Britain, though Starbucks retains its number one position in the world. Costa has over 40% of the British coffee market (Curtis, 2006). Costa has some excellent brand names and brand visibility. This is a very potential strength that allows it to heavily compete with other well established coffee firms like Starbucks and Barista’s.Secondly, Costa has a wide range of product; from hot drinks, to cold beverages. This is also a very crucial strength as it gives its customers a wide range of product to choose from. Lack of adequate stores is one key weakness that is facing Costa. This has disadvantaged the operations of this company as it is unable to supply adequate products in case of rapid rise in demand in the market (Curtis, 2006). Secondly, unlike Starbucks which has a very well established base in various countries, Costa has been able to establish few restaurants in a few numbers of countries. This has hindered its chances of competing with the likes of Starbucks in the world markets. The key Costa coffee objectives are to communicate the superiority of its products and to increase their customers’ loyalty by offering high quality products (Jain, 2000). Costa main strategic thrust is to pursue global integrated value chain leadership, to grow into new adjacent business building on the capabilities it has and lastly is to selectively expand into value chain adjacencies. Costa coffee has embarked on adoption of a strategy that focuses on generating customer emotional engagement. It intends to use this new strategy of emotional led marketing to market and popularize its new Costa light market (Jain, 2000). The company has adopted a variety of response patterns. The main ones are through use of direct emails to the company managers and secondly, one can visit the company offices to give out their claims. Analysis of suppliers and distributors The main Starbucks coffee supplier is Ipanema Coffees. This firm is the owner of the world largest coffee farm. This supplier has a very high bargaining power. This is because, to be a key coffee supplier to a very large company like Starbucks, one needs to have a huge capital base (Fridell, 2007). This is due to the fact that the demand of coffee is very high all over the globe; and coffee beans can only be produced in certain geographical areas. Starbucks main distribution channel is retail and by online (Sharma, 2008). The company uses retailers to distribute its products to various remote areas across the countries it operates in.Starbucks also employs online marketing where customers orders and pay for the products. Starbucks core marketing strategy The key strategic objectives upheld by star bucks are to improve the current beverage in U.S. by refocusing on the customer experience in stores (Walker, 2003). The company also wants to refocus on new product and store design elements.Secondly; the company wants to focus on accelerating expansion and increasing the profitability of its products outside U.S., by re investing its capital earned in U.S. to establish new stores in other countries. Starbucks uses two marketing strategies in selling its products. The company has adopted product development and market development as its marketing strategies. Under product development strategy, Starbucks deals with improving its current products or developing new products for its current market. When using the second strategy; Starbucks continuously differentiate its products (Dahlvig, 2012). It usually differentiates its coffee in different forms like mild, smooth and bold categories. Initially, Starbucks based its market segmentation on socio-economic factors. This is due to the fact that the company by then dealt with class of people who were working at offices and wanted to have a cup of coffee with a good atmosphere and facilities (Ottoman, 2011). With time, the company has also segmented its market by geographic and demographics. It does this by selecting the store locations where they get the educated coffee lovers. To develop a reputable relationship with its customers, Starbucks initially targeted the parents who had young children (Schuler & Jackson, 2007). This proved successful. With time, it has included more segments by targeting college teenagers too. With time, Starbucks has developed a very unique market position for its products. It has successfully positioned its products as one of the highly reputable brands. It adopted a customer based positioning strategy which has proved to be successful. Outline of Starbucks marketing mix Starbucks mainly specializes on the production of coffee and related bevarages.It mainly deals with sale of cold blended bervarages, blended creams like pumpkin spice frappuccino and also premium teas. Starbucks is always known for its low prices on some of its popular beverages (Henry, 2008). The company mainly sells given espresso beverages at lower market prices. This is a strategy its mostly uses to gain a large market share in many oversea markets. Starbucks has distributed many of its products in various countries. In the countries it operates, the company has opened adequate stores and groceries to ensure customers readily accesses it products (Kotler & Armstrong, 2012). It is estimated that Starbucks products are available in over 45,000 groceries and warehouses all over the world. Strabucks has created a very effective community website, which it uses to promote its products (Kotler & Armstrong, 2012).The company has also initiated some programs like the famous one known as “my Starbucks reward program” which allows customers to win free drinks after every fifteen purchases. References Bacon, C. M. 2008. Confronting the coffee crisis: Fair trade, sustainable livelihoods and ecosystems in Mexico and Central America. Cambridge, Mass: MIT Press. Burkitt, H., Zealley, J., & Marketing Society. 2006. Marketing excellence: Winning companies reveal the secrets of their success. Chichester, England: Wiley. Curtis, T. 2006. CIM Coursebook 06/07 Marketing in Practice. Burlington: Elsevier. 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