Starbucks: Can the Brand be Revitalised - Essay Example

Starbucks: Can the Brand be Revitalised INTRODUCTION: Starbucks is one of the biggest names in the specialty coffee industry. The company is known to be a pioneer of different specialty coffee. From the very start, the management of the company has been considerate about providing the customers with not only the best coffee but also one of the best and ultimate experiences. The focus of the company has always been providing customers with the best experience and high quality service along with the high quality product. Starbucks has been reporting considerable growth and profit from the beginning of its operations. However, there has been sudden decline in the profits and share prices of the company. There has been different perceptions and views about this decline and downward trends. According to some analysts, the strategy of ongoing expansion of stores has resulted in decreasing the quality of the service and at the same time has cannibalised the overall sales. Along with this the strategy of diversification into different areas like promoting movies, offering hot food, and starting different themed shops have resulted in diluting the overall image of the company. It is also important to consider that the management of the company is so much busy in coming up with new products and services that the core product of the company which is high quality coffee has been neglected. Along with this there has been drastic shift in the level of the quality of the service provided at the outlets. Customers have been complaining about the lost experience which was trademark of Starbucks. In view of all these marketing challenges and issues, management of Starbucks has been looking forward to change the overall positioning of the brand. In this regard it is important to first analyse and evaluate the current services marketing mix of the company and look for the room of improvements. Apart from this the new marketing strategies should be devised keeping in view the changing preferences and needs of the target market. In this report an attempt has been made to analyse the importance of branding, brand strategy, and brand positioning for the Starbucks. Along with this the strategy of repositioning the brand is also evaluated along with existing marketing issues and challenges faced by the company and the services marketing mix of the company. The report also suggests the possible adaption or changes in the service marketing mix which should be incorporated by the company in order to reposition the brand in effective and efficient manner. ROLE OF BRANDING, BRAND STRATEGY, AND BRAND POSITIONING FOR STARBUCKS: Branding facilitates the organisations in the process of attracting and retaining more customers and hence making more revenues and sales. In this new era of globalisation and technological advancement it is important for every organisation to work on building relationships with the customers and for this there is the need of brand management and brand strategies. As a result, it has become important for the organisations to include brand management and relationship marketing in the overall integrated marketing communication strategy (Lovelock & Wirtz, 2011). It is not easy for any company to build big brand names and brand images. This requires proper and well thought brand strategies and positioning, same is the case with the Starbucks. The founders and management of the company has been focusing on promoting the Starbucks. Starbucks has always promoted itself as a premium brand of coffee and it has been striving to provide the customers with the ultimate experience in the coffee store. The idea or concepts of branding, brand strategy, and brand positioning have been important for every organisation. One has to be careful while deciding about a particular brand image and brand positioning, as it is not easy to change or alter the brand image and brand positioning once it has been established. Apart from this it is also important for the organisations to maintain the same level of services and products in order to match the overall brand image which has been conveyed to the target market. Any deviation from the promoted and communicated brand image can result in serious negative implications on the overall sales of the company (Lovelock & Wirtz, 2011). This is also applicable in the case of Starbucks. The company has positioned itself as not only any regular coffee provider but a place where customers are provided with a whole set of ultimate experience along with the world’s best coffee. From the very start, Starbucks has been working on the principle of providing the customers with the high quality coffee along with high quality experience. For this, the management of company has paid considerable attention on training of the customer service staff. In order to justify the high prices of the coffee, the company has to provide high quality services and experience to the customers. One has to be very careful when adding different products and services to the brand mix or product mix of the company. All these additional products and services should complement the existing products and services and should be in harmony with the communicated brand positioning and image of the organisation. In the start Starbucks kept in consideration to match the new offerings with the existing brand image and positioning. But with the passage of time the strategy of extensive expansion and introduction of new products and services resulted in killing the basic meaning of the brand. All these activities on the part of Starbucks resulted in making the management more complex and as a result there was considerable loss in the overall sales and the stock price of the company. This also directly affected the brand image of the company and it started to appear as any other fast food chains or restaurants. REPOSITIONING THE BRAND: The industry of coffee and beverages has been increasing at a rapid pace. Every other day there is a new entrant in the industry resulting in making the market more competitive and saturated. Many fast food chains and restaurants have started to promote themselves as one of the best places for getting a coffee. This all has resulted in putting extra pressure on the management of Starbucks. Apart from this competitive pressure, the company has also saturated the market by extensive expansion. This has resulted in cannibalising the sales of the company. In order to overcome all these issues and challenges, Starbucks is considering repositioning itself as a high price and a high quality brand. The management of the company has to be careful in the process of positioning itself as premium brand of coffee as the company has lost this position previously because of the inappropriate expansion and diversification strategies of the company. Starbucks has to once again provide the customers with the ultimate and out of the world experience along with high quality coffee in order to get the same brand position again. Customers of the Starbucks have been reporting that the experience promised by the company has been missing and the environment and level of service is also not same as it was being provided in the start. It is not easy for the company to reposition itself. The process of repositioning the brand requires well thought and well planned strategies and tactics. Apart from this, company has to take considerable measures in order to convince the customers about the new positioning. This unique selling proposition of high quality and high price with ultimate and out of the world experience will help the company in the process of outpacing the other competitors in the industry and capture a considerable amount of market share and grab the position of the market leader. In order to reposition the brand towards higher price and higher quality, the management of the company has to consider different marketing issues and challenges. At the same time, the company has to evaluate the current service marketing mix and has to change and alter it in order to provide the same experience and quality to the customers. This process of repositioning will require commitment and dedication from all levels of the organisation i.e. from top management to the customer service representatives or Baristas in the coffee shop. SERVICES MARKETING MIX AND KEY MARKETING ISSUES FOR STARBUCKS: Marketing mix holds special place in the success of the overall marketing strategy of any organisation. In the case of services industry the traditional marketing mix is expanded to seven P’s which are (Lovelock & Wirtz, 2011): 1. Product or service 2. Promotion 3. Place 4. Price 5. Physical Evidence 6. Processes 7. People In the case of Starbucks, the situation is more complicated because of the reason that the company is not only claiming to provide world’s best coffee but also one of the best experiences at the same time. For this reason, the management of Starbucks has been considerate not only about the strategies and decisions related to the quality of the coffee beans but also about the decisions and strategies associated with the high quality service. In this regard, the company has to change and alter the services marketing mix in order to be able to reposition itself as a high quality and a high price coffee provider. The major issue being faced by the company is excessive diversification and expansion. This has resulted in diluting the overall brand image and position of the company. The management of the company has to be careful while deciding about the products and services being offered under the same brand name, as this will directly affect the complete brand image of the company. Apart from this, there have been several issues regarding the quality of experience provided by the company in the coffee shops. There have been serious complaints on part of the customers that the level of service and experience has been decreasing. Company has to consider this fact and provide the employees with extensive training and development courses in this regard. Apart from this, the management of the company has to reconsider and evaluate all processes once again in order to ensure that all services are provided with a human touch. All processes have to be redesigned in order to provide the customers with the consistent experience and quality of service. Management of Starbucks should also make sure that the location of the coffee stores are selected by analysing different important factors like demographics of the locality and other buying patterns of the consumers. This will help the company in the process of providing the services according to the requirements of the people at a particular location or region and thus it will be helpful in increasing customer satisfaction level. Apart from this, company has to invest in the process of market research in order to understand the changing needs and preferences of the target market. In this way the company will be able to cater the needs of the target market in a better way and it will be able to change the marketing and other important strategies according to the changing requirements and preferences of the target consumers. Market research will also facilitate the company in the process of introducing new variants, products, and services successfully. CONCLUSION: Brand positioning is of vital importance for the success of the organisation because it portrays the image of the company to the target market. Brand positioning can negatively influence the organisation if the offerings of the company are not able to fulfil what the customer expects from the organisation. Starbucks is the largest coffee retailer in the world and the company has positioned itself as the world’s best coffee along with exceptional experience however the quality of service of Starbucks has declined a bit and therefore it has to analyse the needs and wants of the customers in different locations and then try to offer more customised sets of products and services considering the culture, needs and preferences of the people in that region. The company has to reposition itself in order to improve the customer satisfaction level. Reference Lovelock, C, & Wirtz, J 2011, Services Marketing – People, Technology, Strategy, Prentice Hall, New Jersey: Read More