Brand Identity of Starbucks - Essay Example

Case Study Analysis- Planet Starbucks Answer Brand Identity of Starbucks In marketing management a strong brand is regarded as the collection of symbols and experiences that is associated with the project, service or organization. The brand of the company is usually referred to the organization’s principle, concepts, ethics and values. The company was formed as a result of an initiative from a group of three friends-Gordon Bowker, Jerry Baldwin and Zev. Initially, the store was named as ‘Starbucks coffee, Tea and Spices’ and the brand logo depicted a chocolate brown colored two tailed mermaid. Later, the name of the store was changed to ‘Starbucks’ and its logo was re-colored to bright green. Starbucks was initially formed with the motto of selling good coffee with a unique flavor that a regular coffee brand wouldn’t offer. After the company was listed in the National Association of Securities Dealers Automated Quotation (NASDAQ), the growth of the company accelerated and it opened 16,680 stores across the globe. Strength &Weakness in the American Markets Strength Weakness Starbucks does not only serve high quality coffee or beverages, but has also redefined coffee as a beverage because of its varied offerings (Mescall 2008). Marketers utilize the brand personality, promise, values and its attributes effectively for creating a niche in the market High priced brews, Moccachinos, Cappuccinos, Lattes and frappes have awakened the senses of 50 million customers approximately worldwide. Starbucks was formed initially in the year 1971 in Seattle (Burks 2009, 1). Today, it has become a global brand with its footing in 47 countries around the world and its net revenue reaching over $10 billion (Burks 2009, 06). In the year 2013, the sales of global Starbucks stores grew by 8 percent and the expansion of the stores grew by 12 percent with revenue of $2.78 billion (Fontevecchia 2013). The company generated huge revenue from China and Asia Pacific region and earned a major part of the share in the coffee industry. Starbucks is one of the most coveted brands in the coffee industry and has a highly developed copyright, logo, brand and trademarks. In the year 2010, the company’s profit margin had hit hard during recession but the company immediately regained profits by 12.7 percent in the year 2012. It lays emphasis more on the innovation of varied types of coffee flavors rather than focusing on the core product It does not lay too much emphasis on the corporate responsibility measures for the betterment of the environment. Strength & Weakness in Australian Markets Strength Weakness Brand Power: In Australia, the brand is strongly associated with customer loyalty and innovative capabilities. The Company has maintained strong revenues, earnings per share, operating income and comparable store sales. Brand promise is crucial for Starbucks and the company has been using high quality beans. It has been observed that the customers prefer having Arabica over Robusta beans and accounts for 75 percent of the worldwide production (Burks 2009, 07). Starbucks uses high quality Arabica beans for serving the customers for their satisfaction purposes. Strong Revenues: In the year 2012 the revenue grew by 45 percent, which was led to its share increase in the premium coffee category. European Coffee Houses: The Australian customers prefer café chain similar to European coffee houses. The European Coffee houses were traditional and had an old charm to it and a warm atmosphere. Starbuck stores were modern and contemporary, offering variety of coffees including hot and cold beverages, fancy decoration, positive and uplifting environment and an access to Wireless Local Area Network connection (Numerix 2013). As the customer’s taste and preferences change, the company tries hard to introduce new flavors of coffee which suits the taste buds of the consumers. The poor identification of target market: It was one of the major mistakes of the company. The company was trying to cater to the needs and requirements of an entire mass instead of targeting a selective population. Starbucks should have gone for a selective premium population like the customers with higher income range and college going students (Marketing Lessons: Whatever Happened to Starbucks? 2010). Thus, it has been observed that the strength of the brand has been effectively utilized in the Australian café markets too and this has proved to be useful to a certain extent only. However, the relative weaknesses of the company are quite different in these markets because the nature of the market in Australia is different and so are their taste and preferences. The marketer did not develop different strategies for these markets instead utilized parallel concept of marketing in the Australian markets. Answer 2 The failure in the Australian market should not deter Starbucks for further penetration and hence, they should use their relative strength with combination of the available business opportunities. These will help in creating a niche in the Australian café market. Brand power: Starbucks should utilize its strong brand personality and attributes to penetrate into the Australian café market and set a strong footing (Starbucks Australia. 2013). Marketing Planning: The Company has a strong ability of market planning and understanding hence, it should study the nature of the coffee market. After studying, the company should learn to identify its target markets and then develop strategies accordingly (Spencer 2012). Café Chains: Since, the concept of café chain is not very popular in the Australian market; the company can develop the first of its kind location strategy to be established with a combination of retail stores and chains. Strong Revenues: Since, the company boast of generating huge amount of profits every year it can utilize certain portion of its revenue for the development of nationwide health campaigns, which help in disseminating information about benefits related to ingredients of the products and also the ways to improve the healthiness of the common people. Team Power: The employees of Starbuck are known to sport friendly and warm attitude which helps in creation of a positive and friendly environment within the store. The management of the company is also known for their intellectual capacity and management abilities for the development of effective marketing strategies. These effective marketing strategies can be utilized for the creation of innovative café products. Answer 3 Current Marketing Strategy of Australian Starbucks After the feeble attempt of the management of Starbucks to penetrate further into the already established coffee market, it had decided to formulate effective marketing strategies, which would help in creating a niche in the coffee industry (Numerix 2013). The universal fundamental marketing plan of Starbucks has always been to develop high quality innovative coffee beverages and cater to the needs and requirements of the common people. The major highlight of the current marketing strategies would be to focus on the following areas 1) To develop small coffee retail chains 2) Product innovation and naming the beverages simple 3) Service innovation Services Strategy Coffee Retail Chains Development and extension of medium sized coffee retail chains in areas devoid of existing competitors. Product Innovation To offer coffee of varied flavors keeping the originality of the flavor intact. Service Innovation To develop small stores and offer the beverages within ten minutes of their ordering time (How to Shape E -Marketing Strategy 2013). Identification of Target Market Starbucks has finally decided upon targeting the customer who falls in higher income range and also teenagers for trying their innovative coffee beverages (Mendes 2009). The tables below will highlight the key marketing strategies adopted by competitors like Gloria Jeans and Hudson which are similar and different from Starbucks. Key Differences Comparable Competitors like Gloria Jeans and Hudson have catered to the needs of the Australian customers and also developed coffee beverages, which suit the taste bud of the customers. In terms of supply chain, competitors like Gloria Jeans and Hudson opted for an integrated supply chain system, which provides inventory timely and in an efficient manner. Even Starbucks have collaborated with leading media franchising partners to deliver superior products but also to enhance their distribution network (Numerix 2013). Gloria Jean’s have opted for unique and different franchising marketing strategies, which tend to provide marketing solutions. Gloria Jean’s believe in developing high communication plans to retain its existing customers like providing official information through their website and also through customized mails to regular customers. Both Gloria Jeans and Hudson believed in increasing the brand image and equity through broad media mix, online and print media mix and also expand its target market by capturing the existing market. Although, competitors like Gloria Jeans and Hudson are still the market leaders in the Australian café, market the key differences between these two companies and Starbucks have allowed it to exist in the market simultaneously with harmony. The major differences like Gloria Jeans and Hudson offer coffee which reflect the Australian cultures however, Starbucks have modified their products. The taste of the coffee reflects a mixture between the Australian and American culture. This is one of the big differences which have allowed the above mentioned companies to coexist in the Australian café market simultaneously. References Burks, B. M. 2009. Starbucks: corporations that changed the world. California: Abc-Clio. Fontevecchia, Agustin. 2013. “Starbucks Skyrockets Higher On U.S. And China Strength, Sells One Billion K-Cups.” Forbes, July 25. How to Shape E -Marketing Strategy. 2013. MHA Maclnytre Hudson. http://www.macintyrehudson.co.uk/business/it-and-e-business/how-shape-e-marketing-strategy Marketing Lessons: Whatever Happened to Starbucks? 2010. UNSW. http://knowledge.asb.unsw.edu.au/article.cfm?articleid=1192 . Mendes, Diego. 2009. Starbucks Failed Strategy to enter Australia. Diego Mendes. Accessed September 03, http://diegomendes.com/wp-content/uploads/2011/06/Innovation-Strategy-Study-Starbucks1.pdf Mescall, John. 2008. Starbucks in Australia: Where did it go wrong? The Drum Home. Accessed September 03, http://www.abc.net.au/unleashed/32188.html Numerix. 2013. Polaris FT partners with Numerix for Credit Valuation Adjustment and Advanced Risk Capabilities. Numerix. http://www.numerix.com/Press-Detail/r/PRESS_RELEASES-1017 Spencer, Kyle. 2012. Starbucks: Strengths, Weaknesses, Opportunities, Threats. The Motley Fool. Accessed September 03, http://beta.fool.com/fatalx/2012/10/26/starbucks-strengths-weaknesses-opportunities-threa/15281/ Starbucks Australia. 2013. Starbucks. http://www.starbucks.com.au/Home.php. Read More