Starbucks - Marketing Environmental Trend Analysis - Report Example

Starbucks

Introduction

Starbucks is a well-known American corporate that sells coffee as well as other related products. Founded in 1971 in Seattle, WA, it now operates across the globe having become the one of the leaders of the industry. Starbucks is known for its quality as well as the outstanding experience that people are able to gain while visiting coffee shops. Nevertheless, it would not be a mistake to suggest that several decades have passed since the company was created; that is why it would be logical to expect it to introduce changes to its operations in order to ensure the successful performance. This paper will analyse the macro environmental factors that influence it, including application of PESTLE framework which highlights different aspects; investigation of the target audience, outlining target consumer groups, the criteria that people use to choose the reducing and the peculiarities of the purchasing process; examination of opportunities and threats that the company is currently facing. Based on the analysis which was mentioned above, the paper will provide two recommendations to Starbucks that focus on using the available opportunities as well as reaching a new level of quality that will reinforce the competitive advantage.

Marketing Environmental Trent Analysis

Speaking of the changes in the political aspect of the environment, one should note that countries today favour global integration and support establishment of connections. However, one should also consider that the difference between regulations applicable in the countries may become a significant challenge. As for economic factors, Lakhera (2016) notes that the growth of developing economies should be regarded as an important opportunity for businesses, including Starbucks. However, one should not forget that rising cost of labour might have a negative impact on this. Therefore, politically and economically now may be the high time to develop the company.

If one considers social factors, one will be able to see that there is a general trend of coffee culture. Indeed, drinking coffee has become mainstream and people feel that they have to have a favourite coffee shop which is obviously a positive change for Starbucks. Moreover, one should point out that the size of the middle class in the countries all over the world is gradually increasing. Therefore, it may be beneficial to target this particular segment of the population since they have the money, the knowledge, and the desire to enjoy high-quality coffee. In other words, the society favours the development of Starbucks.

In terms of technology, one should note that there are significant changes and challenges that can be identified. First of all, it is obvious that today more than even people are able to purchase goods and services easily using a bank card and even their mobile devices. Starbucks has been introducing this feature effectively and may have attracted the attention of the people who integrate technology in their life. However, the latter is a double-edged sword: today people are able to buy coffee machines that are able to brew high-quality coffee (Moeller, Stolla & Doujak 2008). This may be seen as one of the major challenges.

One should also consider the role that legal aspect play in this case. It is obvious that there is a trend for introducing more regulations into the industry. On the one hand, it may be perceived as a positive chance since if Starbucks adheres to them, they will contribute to its positive image, As for environmental concerns, it is quite understandable that people are now aware of the impact that the humanity has on the planet and welcome brands that support sustainability. This is a positive change for Starbucks since it has been the champion of sustainability.

Customer Analysis

Now it may be important to outline the group of consumers that Starbucks targets. According to Veenstra (2014), adults and young adults are more susceptible to the offer that is made by the company in question. Another point that should be mentioned is that the target audience of Starbucks is likely to belong to the middle class: on the one hand, it is not wealthy enough to buy the premium products, but, on the other hand, it is able to afford a product that is slightly higher than the one of its competitors. Moreover, the target audience is probably well-educated so that it can appreciate different elements of Starbucks strategy.

Speaking of the criteria that guide the consumers in their choice, one might mention several. As stated by Heal (2008), the customers of Starbucks are primarily driven by the quality of the product. The latter becomes the major factor that influences their choice. Moreover, they can also be affected by the experience that they once have had in the coffee shop or the image that the company enjoys. Finally, the consumers today prefer buying products from brands that are environmentally responsible and Starbucks has a long history of such commitment.

The purchasing process of the consumers may be briefly outlined as follows. First of all, a person recognises a need for a cup of coffee. Then one searches for the information about the companies that might satisfy this need. All the available alternatives are evaluated against each other and the one which scores the highest is to be chosen. The purchase decision is made based on a number of factors, but in the majority of the cases, the preference is given to the product that has the biggest customer value. Post purchase evaluation reinforces loyalty to the brand.

Evaluations

It may be particularly beneficial to apply SWOT framework in order to properly evaluate opportunities and threats. Speaking of the former, Lee and Lee (2007) point out that expansion to developing economies may be extremely beneficial to Starbucks due to the ongoing processes of global integration. Moreover, diversification of the product line should be regarded as yet another opportunity. Now may be the high time to do it because of the growing coffee culture and the appreciation of environmental sustainability. Indeed, it is logical to turn the strengths into viable opportunities for business development. Finally, Starbucks might consider entering into alliances with other firms. This will help it deal with the red tapes in the new markets and it will simultaneously reinforce the brand image. In other words, there is a wide range of opportunities that the company may take advantage of in the current situation.

However, there are also threats that should be taken into consideration. First of all, it is beyond any doubt that competition in the industry is likely to intensify in the foreseeable future. Moreover, as the company enters new markets it will trigger the opposition of the local brands (consider it experience in India). Secondly, Starbucks has been so popular and transparent that there is a high probability that some company may try to imitate its strategies. This may have devastating consequences especially if a competitor moves to a region where the company in question is no properly represented. Finally, technology may become the arch enemy of Starbucks since with the development of coffee machines coffee shops may become obsolete. As a result, the company will have to put emphasis on its competitive advantage of the experience and human interaction with the barista. In other words, there are also significant threats that have to be dealt with.

Recommendations on Marketing Strategy

The company in question will benefit from the following recommendation on its marketing strategy. First of all, it should capitalise on the brand awareness and use its image to its fullest. This will give it a significant advantage while expanding to other countries and winning the hearts of the people who are environmentally aware. In other words, today Starbucks may be at the peak of its popularity; that is why even more that it takes will attract the public attention. Entering local markets of developing economies will reinforce the image of the company as a global brand and will become a new chapter in the development of coffee culture.

Secondly, Starbucks may benefit from establishing new standards of quality and performance, become the trailblazer and reformer of the coffee industry. For example, it may become the advocate of stricter standards that are applied to cooperation with suppliers as well as growing coffee beans. On the one hand, it will raise the bar higher, limiting access of the potential competitors to industry and, on the other hand, focus on the advantages of Starbucks model and make it even more appealing.

Conclusion

Having examined all the points which were mentioned in the paragraphs above one is able to come to the following conclusion: the macro environmental conditions for the development of Starbucks are quite favourable. There are numerous opportunities that encourage it to expand into developing economies, diversity the product range and create strategic alliances with other companies. However, there are also threats that come with these conditions. For example, in the global world, the competition will become more intense and the possibility of imitation is higher. Moreover, technology may provide people with devices that will make going to coffee shops obsolete.