Starbucks - Synonymous of Coffee - Essay Example

?Starbucks Corporation-Case Study Starbucks Corporation is a company that is synonymous with coffee. As a result, when the Starbucks is uttered anywhere in the world, what normally comes into the minds of many is the quality coffee that the company sells. Starbucks Corporation is an American company founded in 1971. Its headquarters is based in Seattle, Washington DC. Starbucks Corporation is currently the largest coffee company and chain in the world with more than 20,000 stores spread in 62 countries. Most of its chains are found in the United States where the company has opened about 12,811 stores. Other countries where Starbucks has opened several stores include Canada, where it operates 1,248 and Japan where Starbucks has 965 stores (Garza par. 1). Industry Starbuck Corporation deals with the sales of drip brewed coffee, hot drinks of espresso, coffee beans, hot and cold drinks, sandwiches, salads, sweet pastries, Panini, snacks and other items such as tumblers and mugs. In addition, Starbucks sells coffee and ice cream at its grocery stores (Stevens and Loudon, 2005). As aforementioned, Starbucks is currently the largest coffee company and chain in the world operating more than 20,000 stores in 62 countries. Starbuck also stands out as one of the major employer company in the world with more than 149,000 employees. In addition, the company has over 4 million followers on Twitter plus 34 million likes on Facebook (Garza par. 3). Regarding growth, Starbucks currently operates at a mature stage of its lifecycle. Since its founding more than 2 decades ago, the company has experienced rapid growth since its formation. Nevertheless, the growth prospects have significantly slowed down in recent times, which have even forced it to close some of its chains. Starbucks is currently focusing its efforts on its earlier endeavors and internationalization (Allison 4). Starbuck’s Mission Statement Starbuck’s mission statement is more than just words. Instead, it acts as the company’s philosophy that guides how the company does its business. In fact, the company owes much of its successes to its mission statement, which reads, “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Garza par. 5). Starbuck’s Sales History Starbuck has always registered increased sales over the last two decades of its existence. With a market capitalization worth $50 billion, the company has always been able to register increased sales, thanks to its quality coffee, which continue to attract more customers. In the year 2012, for example, the company registered $13 billion in sales (Murphy par. 3). Target Markets Starbuck has a very diverse market with segments varying depending on the different products that the company offers. However, in general terms, Starbuck’s target market comprises of the coffee drinkers throughout the country. Starbuck also targets mainly men and women aged between 18 to 35 years since they form about 40% of the total market. Most of the company’s customers reside in cities and suburban areas. Starbuck’s target market also comprises of university faculty members and students, as well as individuals working in managerial, professional, and executive positions. Further, the company also targets people with earning relatively higher incomes, since the company’s products are more expensive than other coffee shops such as Tim Hotton and Coffee Times (Murphy par. 5). Competitive advantage Starbuck’s competitive advantage is based on the company’s strengths. These include the premium quality of its coffee drinks and other products that it offers. Starbuck also provide its customers with a brand experience that goes beyond the products that it deals with, including excellent customer service, peculiar drink names, and elegant looking stores that serves as an excellent meeting point. The company also gives back to the community and protects the environment through corporate social responsibility. In addition, the company has strong personnel policies (Allison 4). Positioning Starbuck operates in a very competitive environment. Therefore, in order to gain competitive advantage over other companies in the industry, Starbuck had to position itself by distinguishing its products from those of its competitors, as well as giving them the strategic advantage in the market. In addition, the company also positioned itself after its acquisition in 1987 by replacing the transactional marketing with relationship marketing. This was meant to impress, rather than satisfy customers. In addition, Starbuck positioned itself by relying on public opinion (Allison par. 3). Current Marketing Mix Product Starbuck’s products are diverse. However, it specializes in coffee and other beverages. Among the products that the company sells, include coffee, cold blended beverages, Italian-style Espresso, and premium tea. Additionally, the company also sells coffee-related equipment and accessories. Price Starbuck did announce on September 22, 2010 that it would be forced to increase its prices due to the rising cost of coffee bean prices, dairy and other raw materials. However, the company intends to maintain or lower the prices of most of its products, including those of the espresso beverages. Contrary to coffee, Starbuck’s tea prices are not based on size, but are instead based on the number of tea bags. Place Starbuck’s coffee stores are located in different parts of the world to enable its customers get the products easily. The coffee Holding Company, Inc. is situated at New York, Staten Island, and Victory. Starbuck also has a store in Toronto, Canada. In addition, the company has brunches in Japan, Argentina, U.K., Australia, Singapore and Chile, just to name but a few. In fact, the company’s products are sold in more than 39,000 warehouses and groceries stores, 5,500 of which are found in international market while 33,000 are in the United states (Murphy par. 6). Promotion Starbuck engages in intensive advertisements of its products to create awareness of its products. The company also operates a community website that helps in collecting suggestions and feedback from the potential customers. In addition, the company also promotes its products by organizing road shows and provision of gifts to lure customers to the company. Product/Service Review Starbuck stands out as the one of the companies in the world that serves Espresso Coffee, which is available in either single or double shots. Unlike other drinks that the company serves, Espresso brand is specifically an energy drink. The company reveals that the caffeine content in a single shot is around 100mg. Currently the versatile and smooth Espresso Roast is the soul and heart of the company. Many people like drinking Espresso because of its high-energy content and the fact that it is not only rich in flavor, but also has a lingering aroma and the caramel sweetness that make it a perfect drink. Since its introduction, Espresso has realized an increase in demand, which has translated into an increase in the sales volume. Regarding the life cycle of the Espresso, the company reveals that the brand is still at its growth stage, since it was introduced into the market not long time ago (Murphy par. 8). Works Cited Allison, Michelle. “Starbucks has a new growth strategy — more revenue with lower costs.” Seattle Times. 15 May 2010. Web. 22 Oct. 2013. Garza, George. “The history of Starbucks.” 2012. Web. 22 Oct. 2013. Murphy, Ted. The History of Starbucks. 2013. Web. 22 Oct. 2013. Read More