STARBUCKS

Presented by:

ASHISH KHATTER

ROLL NO A 10

JULY 2012-2014 BATCH

COMPANY OVERVIEW

Starbucks is an international coffeehouse chain based in the United States.

Starbucks is the largest coffeehouse company in the world with13279 stores located in the US and 20891 stores in 62 countries.

Company History

1971-The first Starbucks opened in Seattle, Washington, on March 30, 1971 by three partners Gordon Bowker, Jerry Baldwin, and Zev Siegl.

1987-  In 1987, the original owners sold the Starbucks chain to former employee Howard Schultz who rebranded his Il Giornale coffee outlets as Starbucks and became the CEO of the company.

1992- Company went public and Initial public offer issued in the stock market in June 1992.

2002-Fourtune magazine named Starbucks as one of the “100 Best Companies to Work for”.

Financial Results for 2012 Revenue US$ 13.29 billion Operating income US$ 1.99 billion Net income US$ 1.38 billion Total assets US$ 8.21 billion Total equity US$ 5.10 billion Employees149,000 (2011)

MISSION STATEMENT

In the beginning “ Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.

Now “ To inspire and nurture the human spirit - One person, One cup, and One Neighborhood at a time." 

Competitors

McDonald’s (McCafe) Dunkin’ Donuts Specialty coffees sold at retail

through supermarkets (Nestle) Kraft General Foods

Products Coffee – mocha , lattes

Coffee-related accessories and equipment  including thermoses, mugs, packaged ground coffee and hot chocolate, are also products sold at Starbucks.

Tea- Tazo brand in tea.

 Pastries

 Frappuccino beverages

Smoothies

Cookies/Baked goods

Breakfast Sandwiches

 

MARKETING STRATEGIES1 “Perfect Cup of Coffee” – Their coffee, even if priced

slightly more expensive than expected, is famous for satisfying customers with its rich, delicious taste and aroma.

2 “Customer Satisfaction” –. From entrance to the store to the very last drop of their coffees, it is a must that customers feel the uniqueness of enjoying their Starbucks coffee experience.

3 “Creating a Starbucks Community” –  Starbucks started a community website, My Starbucks Idea, designed to collect

suggestions and feedback from customers.

MARKETING STRATEGIES

4 “Innovation” –  They’ve added different flavors to their coffee, more food on their menu, free weekly song or app download from iTunes, free Wi-Fi internet usage, free birthday drink.

5 “Brand Marketing” – The Starbucks marketing strategy has always focused on “word-of-mouth” advertising and letting the high quality of their products and services speak for themselves.

6 “Monopolistic”-Some of the methods Starbucks has used to expand and maintain their dominant market position, includes buying out competitors' leases, intentionally operating at a loss, and clustering several locations in a small geographical area for saturating the market.

MARKETING STRATEGIES7 Just Say Yes” policy in order to keep the customer happy.

• Example: Always compensate dissatisfied customers with a Starbucks coupon entitling them to a free drink

• Example: Give a customer a free refill if he/she spills their

drink.

8 My Starbucks reward program allows members to earn a free drink after every 15 purchases at participating Starbucks stores.

9 Starbucks Card – It is a stored-value card for customers to use and reload.

Place

Most stores are located in high-trafficked, high-visibility areas, such as:

1 Office buildings �2 Downtown and suburban retail centers �3 Airport terminals �4 University campuses �5 Busy neighborhood shopping areas �

convenient to pedestrian traffic

Price

Usually price and quality determines the value of the product. Starbucks always tried to deliver high value to the consumers by buying quality beans, assuring that their staff got effective & efficient training, and mostly, creating an environment to enjoy coffee. For this, Starbucks’s customer had to pay more; it was expensive.

To keep the competitive edge, the company also began to implement other value added services like, introducing $3.95 "breakfast pairings," which includes breakfast items along with a coffee (2010). This is to target the price conscious customers.

STARBUCKS IN INDIA Starbucks had entered the Indian market in October

2012 and currently operates five stores in Mumbai and four outlets in New Delhi.

Tata Starbucks Ltd, the 50:50 joint venture between Starbucks Coffee Company and Tata Global Beverages Ltd. launched the latest outlet at Select City Walk Mall.

Tata Global Beverages vice chairman R K Krishna Kumar had announced plans to open 50 cafes in the country in 2012, entailing an investment of Rs 400 crore.

LOGOS

1971-1992 1992-2011 2011-Present

Segmenting and Targeting Markets Starbucks uses demographic

segmentation(markets by age, gender, income, ethnic background, and family life cycle) as well as geographic segmentation (markets by region of a country or the world, market size, market density, or climate)

Demographic Segmentation

Starbucks‘ main target market is men and women between the ages of 25-44, which accounts for almost half (49%) of its total business.

Young adults, aged 18-24, are the next large group that Starbucks targets.  They bring in about 40% of Starbucks' sales.

Geographic Segmentation

Starbucks also uses geographic segmentation.  Starbucks is located all around, specifically in upscale locations, near offices, and near many college campuses.

Target Marketing for young adults (aged 18-24 ) Starbucks target this group through the

growth of technology and innovative ideas.

Starbucks positions itself as a place college students can hang out, study, write papers, and meet people.

Target Marketing for Men and Women (aged 25-44) Starbucks targets this group by offering certain

drinks that appeal to them.

Starbucks targets this group creating the “third place” to go to between home and work by creating this unique and relaxing “experience” and “atmosphere” as customers within this range tend to have high income and professional careers

Market Positioning

Starbucks has positioned themselves as a highly respected brand.

The Starbucks company has positioned itself in a way that it can distinguish their products from competition, which gives them an advantage.

Positioning Strategy

Their positioning strategy is customer based, which allows them to give the best customer service.

Starbucks hold onto their sustainable competitive advantage in terms of their customer satisfaction as well as their employee satisfaction.

Conclusion

Starbucks marketing strategies even though unusual has been very successful since last 40 years.

As long as Starbucks fulfills its customer’s wants and needs, Starbucks will continue to be a leading force in the market.

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