The Marketing Strategy Starbucks Company Intends to Follow - Case Study Example

Contents Executive Summary 2 Objective of the study 3 Introduction 3 SWOT 3 Marketing Opportunities 4 Marketing Strategies 5 Resources and capabilities to market 6 Marketing Mix 6 Implementation of marketing tactics 8 Review of marketing strategies 8 Legal & Ethical Requirements of marketing strategy 9 Stakeholders 9 Stakeholders view 10 Change needed in marketing plan to adjust the strategies 10 Recommendations 11 References 14 Executive Summary Starbucks has its presence in the coffee market and with gaining popularity along all generation the coffee chain has extended its stores and growth potential by launching different stores worldwide. The coffee chain intends to attract the under 18 generation by launching a beverage which is a variant of coffee but has a low caffeine content. The company intends to do so considering the wide market it has. The report present the marketing strategy the company intends to follow. It also highlights the SWOT the company will have. The report presents how the different marketing strategy and entering into different contracts like the franchise model and extending their reach to other market will benefit. It also presents the way it will have an impact on the stakeholders and the way the performance will be monitored. Objective of the study Identify the potential the beverage market has Identifying the preference of different age group towards different drinks like alcohol, soft drinks, tea, coffee and juices. Identifying the potential market where Starbucks can launch itself with a new variant. Introduction Starbucks having its presence in the coffee markets intends to launch products for the younger generation thereby showing its concern for the younger generation and including them in their customer base. The company intends to have a marketing plan where it launches a variant of coffee with low caffeine so that the health is not compromised. The company based on it has devised a marketing plan for the same where it intends to increase its presence and also grow in the beverage market. SWOT Analysis The SWOT analysis for Starbucks while launching a new product for youngster will help to identify the areas where the company can work and strengthen itself into a better player. Strengths Satisfies customer needs of thirst which is a basic need Large market and increasing customer base due to population growth especially youngsters Variety of flavours and packaging’s suiting all customer needs Weakness Limited shelf life there by making the product become unfit for consumption Brand power require to market the product pushing the cost to rise Opportunities Huge potential in the beverage segment as there is a upward trend and younger generation are preferring it. Opportunity to launch variant in the soft drink market along with a health drink Opportunity to tap the coffee, tea market as it is growing. Threats High distribution cost Health issue surrounding the beverage industry Marketing Opportunities Starbucks has a good presence and can increase it by sustaining efforts. The company can look forward to develop itself in the overseas market by continuing with the same business model at the same time also develop their franchise model. It will help Starbucks tap new customer as it will benefit in the following ways “Ability to perform in other countries where there was a demand” (Beck, 2010) for Wiggles performance Perform in the language desired by the customer “Improve focus and efficiency by devising new songs and plays” (Beck, 2010) which attract more children and parents “Increase the reach to other countries” (Beck, 2010) where Starbucks is not famous and create a pool of customers “Creating a pool of people who can carry the name of Starbuck and at the same time ensure that if some one leaves the group the induction of a new person is smooth”. (Beck, 2010) Marketing Strategies To market Starbucks will look forward to create brand awareness. In the beginning “Starbucks will advertise the product through in stores promotion”. (Bristow and Frankwick, 1994) We plan to have “television commercial in the beginning as the viewership is high for it” (Helm, 2005). Starbucks should also ensure that marketing takes place through “advertisement in news paper, hoardings and distribution of pamphlets”. (Bristow and Frankwick, 1994) The main aim here is to make people know about the new generation beverage launched by Starbucks. In stores promos and special road shows will help to attract customer. Starbucks should use this strategy as “there is stiff competition and the huge cost involved will put extra pressure which will hamper the growth path”. (Helm, 2005) This strategy will give us a path and help to move ahead. Resources and capabilities to market Starbucks to ensure proper marketing of its product will need a marketing team that is able to deliver on the promises. The marketing team will have to work in tandem with the other departments to ensure smooth transformation and at the same time ensure that the business model with which Starbucks work continues. The insights are The marketing team can use this similar model and tie up with different companies in different countries to promote their product The marketers can ensure that they provide the services to the customer in the local language as required by them Starbucks can ensure that based on different regions and preferences work is divided to ensure productivity The domestic marketing team can realize the importance of customer satisfaction and perception and use ways that can help to maximize those. Marketing Mix Starbucks while launching a beverage for the younger generation which has less caffeine and ensure that they have a customer base in the younger generation should have the following marketing mix Product The beverage Starbucks desires to launches should have less caffeine considering the harmful effects it has. At the same time the taste should not be compromised considering the brand image. The company can also look forward to launch a beverage which is nutritional and helps the younger generation to stay fit by having some health drink. Price Starbucks should ensure that the product is not priced heavily and should suit all pockets. This will help to attract younger people especially the students who have a fixed budget thereby ensuring that all the segment of the younger generation are tapped. Place Starbucks should ensure that the beverage is launched across all its stores slowly where as in the beginning the company can launch it at a few stores thereby testing the feasibility of launching it. Starbucks need to ensure that while launching it special care is taken to ensure that it is launched at places where the students and the younger generation is in abundance. Promotion “Starbucks will advertise the product through in stores promotion”. (Bristow and Frankwick, 1994) Starbucks should also ensure that marketing takes place through “advertisement in news paper, hoardings and distribution of pamphlets”. (Bristow and Frankwick, 1994) This will help them get awareness and will help them sell their products easily. Implementation of marketing tactics In the beginning Starbucks should intend to “create a strong distribution network in 20-30 states and ensuring that the drink is available on time”. (Heller, 2007) This will ensure that Starbucks is able to create a good network. This will also result in “having good relation and ensure that we don’t run out of stock”. (Heller, 2007) The chart will look as follows Week 1- Week 2 Launching the product by advertisement across different dailies Week 3 – Week 4 Making the product available across 20-30 locations to see the preference for the product Week 5 – Week 10 Ensure sales and see that the marketing team markets the products Week 11 – Week 14 Gather the data regarding the sales, make an introspective note to see the demand and based on that make a world wide release of the product Starbucks at the same time should see that they adhere to the time limit set by them and steps should be taken to counter the changes. Entrusting responsibility to the marketers and holding them accountable for deviations will play a key role as it will shape the direction and path the company will follow. Review of marketing strategies Starbucks need to have a mechanism in hand through which the progress is monitored. Starbucks need to develop a monthly sales chart based on location, region, different drinks ordered customer age group and so on so that it is able to gauge which region or drink is demanded more by the age group. This will help them to put efforts on other regions at the same time continue with the same manner on drinks which are gaining popularity. Legal & Ethical Requirements of marketing strategy Starbucks while marketing needs to ensure that the legal and ethical standards are matched as it will will tarnish their image. Starbucks has committed itself to Corporate Social Responsibility by looking into certain important factors like the community, environment, suppliers, customers, employees and government agencies. (Starbucks Singapore, 2010, p 12.2) This can be substantiated by the fact that 82% of the employees were satisfied while the industry stands at 50%. (Dobkowski, 2005, p 5) Starbucks to ensure that they adhere to the legal requirements has provided “a disclosure in the financial statements” (Smith, 2010, p 59) which takes care of “ethical, social and environmental risks”. Starbucks needs to continue similarly and any change in any strategy should ensure that these factors are looked after especially as Starbucks is dealing with the younger generation who are more prone to ethical requirements. Stakeholders Starbucks as is performing in a society and belongs to the service industry is liable to various stakeholders. Starbucks need to take care of the various stakeholders it has. Some of the stakeholders Starbucks has and needs to ensure that they are not harmed are customers, employees, government bodies, environment, society and others. Starbucks need to ensure that the requirements of the stakeholders are matched and measures should be taken by Starbucks to ensure that the promises made to the stakeholders are taken care of. Stakeholders view Starbucks marketing plan will have an effect on all the stakeholders. The marketing plan will have effect on the customer. As Starbucks is launching a variant for the younger generation which has a low caffeine content will be beneficial to the younger generation. An interesting fact for Starbucks is that it is providing health access to customers. By providing beverages which has less caffeine this has been taken care of. The marketing plan for Starbucks also ensures that it has a high rating for customer needs. Starbucks has ensured that customers associated with the company are adhered to the requirements of the code by the management by ensuring proper service. Starbucks has ensured that they are in constant touch with the customers by conducting regular meetings and forums. This has looked into the fact that all the small concerns relating to the customers and society is taken care of. (Annual Report, 2007, p 14) This thereby ensures that Starbucks marketing plans adhere to the requirements of the stakeholders and measures are taken to continue their sustainable efforts. Change needed in marketing plan to adjust the strategies Starbucks also needs to be ready with a back up plan in case the marketing strategies fires back. This can be taken care by deviation from the coffee business and providing energy drinks as it will also help to extend their product line. Starbucks needs to be active and regular monitoring will help Starbucks to find those deviations and if proper measure are taken then this will be taken care of and will help them continue and thrive towards growth. Recommendations Based on the findings and the opportunities the beverage market Starbucks can do the following Starbucks should launch a coffee beverage which acts as which has a low caffeine content thereby targeting a huge and niche market. Starbucks should ensure that they are able to market the benefits of such a drink and make people aware of the health benefits Starbucks should look to eye teenager and younger generation as they are the ones who prefer this and with rapid rise of the younger generation provides an opportunity to grow. STARBUCKS August 7, 2010 from: Stakeholders To: Marketing team Dear Starbucks, The recent outbreak of news that Starbucks is launching a variant of coffee for the younger generation is a bit of concern for us the stakeholders. Starbucks which is a coffee giant provides coffee which has a caffeine content which could have harmful recursions. We as a part of the company are concerned about the health issues this might lead to as caffeine is harmful for the human body. The marketing team to sell their product would look at avenues which would not look into matter of such concern. We would like the marketing team to provide us details about how they will go around dealing with the new product and measures taken by them which will adhere to the Corporate Social Norms at the same time the importance of health issues identified by them. We would be highly pleased if the marketing team could provide us the details regarding it before the launch of the product. Thanking You Stakeholders STARBUCKS August 10, 2010-08-10 from: Starbucks To: All Stakeholders Dear Starbucks Stakeholders, Since, 2010 Starbucks has been trying to develop a variant of coffee which will be beneficial for the younger generation and will have low caffeine content. This has been done keeping in view the health issues at the same ensuring that the drink is healthy and provides benefit to the younger generation. Starbucks to ensure proper quality and standards has adopted certain measures which will thereby ensure that it doesn’t break those. The coffee chain will ensure and regular feedbacks will be collected from customers. At the same time regular check ups and surveys will be done which will ensure that quality of caffeine is under control. Starbucks will commit itself to Corporate Social Responsibility by looking into certain important factors like the community, environment, suppliers, customers, employees and government agencies. Having special marketing team will adhere to the social responsibility norms and continuous feedback will ensure that quality is not compromised. We at Starbucks have endeavoured and will continue with our efforts to provide the same service and ensure that quality improves in the long run. Thanking You Marketing Team Starbucks References Annual Report, (2007), “Fiscal 2007 Corporate Social Responsibility Annual Report”, Starbucks Corporation, page 12-14 Bristow D and Frankwick G, (1994), “Product manager influences tactics in marketing strategy development and implementation”, Journal of Strategic Marketing, Volume 2, Issue 3 Beck S, (2010), “Franchising in frontier markets”, Dalberg Global Development Advisors Dobkowski, (2005), “Good example of corporate social responsibility”, page 5, retrieved on August 4, 2010 from http://www.helium.com/items/1411478-starbucks-and-social-responsibility Helm B, (2005), “Energy drinks build their buzz”, Business Week, retrieved on August 4, 2010, from http://www.businessweek.com/smallbiz/content/jan2005/sb2005015_8196_sb017.htm Heller L, (2007), “Energy drink outperform all other drinks”, Financial & Industry, retrieved on August 5, 2010, from http://www.foodnavigator-usa.com/Financial-Industry/Energy-drinks-outperform-all-other-beverages-report > Starbucks Singapore, (2010), “Starbucks Singapore: Beyond Making Profits”, Managing Sustainability and Ethics, page 12.2 Smith A, (2010), “Growth of corporate social responsibility as a sustainable business strategy”, International Journal of Sustainable Economy, Volume 2, Number 1, page 59-79 Read More