The paper "Starbucks Advertisement for Choco Banana Frappuccino, A Blended Ice Coffee Drink" is a brilliant example of a term paper on marketing. Pennington (2005) observes that Starbucks specialty coffee has tremendous market size as evident by nearly fifty percent of specialty coffee drinkers in the United States alone. Their age ranges from teenagers to matured adults. These are the market segments that drink coffee almost every day. Coffee shop revenue in 2003 reached $8.47 billion (Pennington, 2005). In the study by Ertz (2004), there is an observed incremental increase in the everyday consumption of specialty coffee.
Figures show that nine percent in 2000 increased to sixteen percent in 2004. On the other hand, occasional consumption of specialty coffee has peaked to fifty-six percent in the same year. Major Competitors and Their Market Mix Tim Hortons is one of the competitors of Starbucks. This company has more than two thousand eight hundred stores internationally. Their stores provide customers with coffees, cappuccino, baked products a lunch menu. There are almost a hundred locations which are operated by franchisees (Tim Hortons Inc. Company Overview, 2007). Another competitor is Diedrich Coffee.
This company operates three hundred eighty coffeehouses in the United States of America. Diedrich operates under the Diedrich Coffee, Gloria Jean's, Coffee People, and Coffee Plantation brands. This company offers cappuccino, latte, other Italian-style beverages, food items, whole bean coffees as well as coffee accessories. It has its own roaster facility located in California, U.S. A. It is involved in retail and wholesale of coffee beans. Another competitor, Tully's Coffee has retracted its expansion plans after meeting financial difficulties due to its expansion programs. Another company, the Peet's Coffee and Tea has sixty-two stores whose principal owners sold the then-fledgling Starbucks in 1987.
In the past years, this company has shifted its attention to increasing other distribution channels like grocery stores, online coffee bean sales, and service catering. The AFC Enterprises, the number two operator of fast-food chicken restaurants, owns or franchises nearly four thousand chains. It also owns Seattle Coffee. Seattle Coffee Company is the arm of Atlanta-based AFC Enterprises that runs its Seattle's Best Coffee and Torrefazione Italia Coffee. The roughly 220 chains of Seattle Coffee has its own strategic locations with sure markets along with international growth and street-side locations, Schickler told analysts recently.
Seattle's Best also is developing a drive-thru kind of store and a possible expansion with a "major" drug-store chain, Schickler said (Peters, 2002). James (2002) explains that a report on the U. S. coffeehouse market by Chicago-based market-research firm Mintel International Group Ltd. Stated that coffee shops chain wishing to expand to reach the size of the Starbucks find difficulties due to insufficient resources.