Planet Starbuks: Caffeinating the World - Research Paper Example

A Case Study Assignment Planet Starbucks: Caffeinating the World. Department Grade 23rd November Introduction Planet Starbucks is a Seattle, Washington-based coffee company. Its core activities involve buying, roasting and selling whole bean specialty coffees and coffee drinks all over its global network chain of retail outlets. The corporation started initially as a seller of packaged, premium specialty coffee in 1971 by Jerry Baldwin, Zev Siegel, and Gordon Bowker (Bhaskar, et al 2009). Starbuck has evolved to become a reputable firm for its coffeehouses. It has cut a niche in the business world by changing the way people in America and around the world view and consumes coffee. The initial idea in the mind of the pioneers of coffee shops was creating what they termed as America’s “third place” after one home and place of work. The success of this international company has attracted global attention. From the case study under consideration, it is evident that Starbuck has consistently been growing and is considered among the fastest developing companies within the USA. This paper aims at evaluating the marketing strategies; Starbuck has utilized to achieve the unequalled success in the United States. The Success of Starbucks Marketing Strategy in the United States Perfect implementation and prompt execution of a strategic plan are essential for the success of any company. Having an ideal or highly sought after product does not mean achieving the best, but how well positioned the organization is to the target market and to implementing proper marketing strategies to ensure successful marketing of the products (Bhaskar et al. 2009). Starbuck has successfully convinced its consumers, that they not only provide coffee, but also possess a wide range of experience that they indulge in the everyday task of satisfying their customers (Bhaskar et al. 2009). Customer satisfaction is a truly vital issue with Starbuck right from the entrance into their stores up to the last drop of coffee taken. This factor brings out the uniqueness of the company to the customer. Providing comfort away from home: Success has been achieved by converting, home tasks to be a commercial success through the implementation and proper execution of strategic plans. From the beginning, Starbuck marketing strategy ensured that there was a third place Americans could go apart from home and the work place. The creation of this unique and relaxing experience and place atmosphere for people has brought significant advantage to the company. Starbuck is in an industry that upholds the principles of differentiator strategy with very high regards. The marketing strategies of Starbuck can clearly be termed to be the weapon of the company being at the helm of highly competitive markets. The organization has made its high quality products, and has cut a niche by differentiating itself during the years as being committed to the production of quality products ready to give outright satisfaction to the consumers. Bhaskar, et al., (2009) argues that the association of Starbuck with quality has been able to charge a premium for its product in the world of business. Location of coffee outlets: Starbuck has established itself by setting up coffee shops at remarkable spots accessible to the consumer foot traffic particularly in the densely populated areas. The establishment of the stores was done in such a way that it covered a neighborhood and several business premises. With more than 5500 coffee houses in over 50 countries, Starbuck individualized each and every outlet according to the surrounding communities. This was particularly vital in ensuring that their products satisfy the consumers at the very core of their needs (Bhaskar et al. 2009) Starbuck’s products were sold at every available outlet channel to ensure every customer is targeted. Brand marketing strategy at Starbuck is always focused on the word of mouth. This has been the unique nature of Starbuck for many years, and it has played a monumental part in ensuring that the success of Starbuck is realized. In the recent past with the economic world turn and rebirth process, Starbuck has faced enormous competition in the gourmet coffee business. This has been orchestrated by many companies as large as Starbuck engaging in the business venture. Through its promotions, Starbuck was able to create a perception of a premium gourmet coffee. Innovation of new products is a strategy that has seen Starbuck further differentiate itself from other competitors in the gourmet coffee business. Through the years, Starbuck Coffee Company has been on the realm of thinking up and being creative (Bhaskar et al. 2009). Coming up with innovative ideas to add to their products and services has been a norm of Starbuck. They have incorporated new flavors in their coffee menus, more foods and being the first to utilize the internet to enhance the capability in their stores. Venturing into smart partnerships; Starbuck has ventured into strategic partnerships to demonstrate the fact that another way to grow the business is to look for a smart partner this ensures considerable returns. Starbuck went into several distribution agreements with well established companies like the Kraft Foods to distribute its coffee related products (Larson, 2009. This strategy has ensured increase in the sales volumes of Starbuck coffee Company. Starbuck has engaged into activities that have created a Starbuck community in the consumer world. While visiting their website, the visitor is encouraged to give their experience with Starbuck history; further the company ensures it follows up personally with the discussion. With increased globalization and keeping in mind that Starbuck is spread all over, they have taken into consideration the desires and values of each customer in trying to satisfy their need. This is in line with the marketing strategy of satisfying their customers fully and in a different manner from the rest. This paper further compares and contrasts the marketing strategy and its success in the following territories. China With the gradual economic development growth experienced in China and its enormous population, the country has proved to be a perfect target for expanding businesses. Here, Starbuck first calculated its move well keeping mind the tradition of the Chinese attachment to tea. It also treaded with care the venture into Chinese market, as it was referred to, as the forbidden palace (Kotha & Glassman, 2003). Prior to setting cafes it ventured into partnerships with leading restaurants in the process of testing the market viability. Starbuck set a standard in China that placed itself ahead of the upcoming coffee sellers like Mr. Coffee, the Discovery Cafe, and U-Like Coffee. Starbuck ensured that it targeted the local population and enhanced the perfect quality of coffee which was considered awful smelling by the Chinese. The company went ahead to educate the local of the intricacies of coffee drink. This further boosted the penetration as the locals understood the importance of the product Starbuck was offering. Starbuck continued to enhance business in the Chinese market with the introduction of more outlets in the Chinese market. According to Starbuck report, (2003), it has been involved in social responsibility by getting back to the community through support program like, funding education and assisting in relief of natural catastrophes like the Tsunami. (Starbuck’s coffee 2003) This in its context brings the company to the locals, and they get to understand who Starbuck is. They have also been involved in balancing the cultural sensitivity of the Chinese people to be able to capitalize on their brand. The key to a breakthrough in China was realized with coffee house that empowered the China’s emerging middle class. According to slideshare.net (2011), the middle class in China were able to display their new lifestyle and status publicly while keeping Starbuck’s beverages as affordable luxuries. Europe Europe has a long history of coffee drinking. It is therefore, vital looking at how Starbuck has been able to perfect its operations in the European old market of coffee. The strategy of acquisition saw Starbuck acquire Seattle Coffee Company. This was a U.K. retailer that had already established 64 cafes in prime spots throughout U.K. This did set a starting mark to venturing into the European market. Starbuck faced a stiff challenge in the European market by trying to overcome the already set market dominance by the likes of Trieste in Italy. Starbuck enhanced its marketing strategies to counter the already established coffee market in Europe. They strengthened and improved their service delivery to emerge the best among the key players in the industry. The introduction of canned and take-home drinks saw Starbuck serve customers in a hurry but with absolute desire for a coffee drink. They also availed coffee drinks even in groceries to meet the demand of the customers down the lane (Kotha & Glassman, 2003). In France, Starbuck had to deal with lack of acceptance by the historic cafe culture characterized with disposable cups. The younger generation was targeted, and they responded by joining the American tourist to embrace the drinking of coffee in Paris. According to Slideshare.net (2011), lowering of prices in Italy was used to counter the already established market by other key players as well as introducing the culture of serving coffee with food. Latin America Penetrating the Latin American market was not that easy either. The advantage of this market over the European one was that many of the countries in Latin America were coffee growers. Brazil being the largest producer of coffee was the second venture of Starbuck after Mexico. They established themselves 100% after failing to get a perfect partner to venture into partnership. Starbuck also acted quickly to counter the mushrooming copy business that was rising up. This was vital in the realization of being a premier coffee chain. The market of Starbuck being worldwide saw them convince the Latin American countries that they are committed to selling their coffee all over the world thus gaining confidence with the locals. The team in Latin America chose the most viable spots to market their products. In Brazil, they choose Ipanema area of Rio de Janeiro, as it was a hot spot (Kotha & Glassman, 2003). Starbuck had basic knowledge of the Latin American taste as Miami a neighboring state had set up coffee houses targeting the Caribbean people. They strategically established their market base and utilized the opportunity of having coffee close to the market as Latin America boasts high production of raw coffee. The comfort exuded by Starbucks coffee outlets saw Mexicans get a place to go other than take coffee from their homes and work place. Conclusion Starbuck has been successful in the world of coffee and its products sale. It has utilized the advantage of getting into the market being number one or among the key players. However, the emergent world has prompted Starbuck to strategically remain upfront with the changing market environment. Competition as discussed above has seen Starbuck intensify its product differentiation to ensure vast market base capitalization. The strategic plans in America, Europe, China, and Latin America have proved that Starbuck is not going to bow down to the negatives in the market, but is going to prevail, and expand its territory. Amid the challenges it has faced, Starbuck has learned to perfect its operations to remain at the top of the coffee industry. References Bhaskar, C. et al (2009) Starbuck Marketing Strategy, Indews Broadcast, (November 26, 2009) available at http://blogs.indews.com/business/starbucks_marketing_strategy.php\ Kotha, S. & Glassman, D. (2003, April 7) Starbucks Corporation: Competing in a Global Market, [pdf] UW Business School. Available at http://faculty.bschool.washington.edu/skotha/website/cases%20pdf/starbucks_Intl%20co py.pdf Larson, R., (2009). Marketing Strategy and Alliances of Starbucks Corporation, Faculty Publications and Presentations. Paper 10 available at http://www.digitalcommons.liberty.edu/busi_fac_pubs/10 Q&A With Starbucks’ Howard Schultz, (2003) Planet Starbucks (B): Caffeinating the World. Business Week Online, September 9, 2002. Starbuck’s coffee (2003) Starbucks commits US$5 million to Support Education Programs in China. Starbucks Corporation available at http://www.starbucks.co.nz/index.cfm?contentNodeID=389 Starbuck International Marketing Strategy, (2011) SlideShare Inc. available at http://www.slideshare.net/sk_prince/starbucks-international-marketing-strategy-3900413 Read More