Starbucks Marketing Case Study

1 January 2017

They have a wide variety of different products. Their main product that they are well known for is their line of premium coffee products. They offer more than 30 blends and single origin coffees, hand crafted espresso and blended beverages, Tazo teas, a line of bottled frappuccino coffee drinks and Starbucks dubbleshot.

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They also offer an exclusive line of Starbucks Barista home espresso machines, coffee brewers and grinders, freshly baked pastries, a line of super-premium ice cream, a line of premium chocolate, sandwiches, salad, coffee mugs and coffee accessories, compact discs, and assorted gift items. 2. ) What advantages does McDonald’s have in competing with Starbucks for coffee sales? McDonald’s have some advantages over Starbucks in competing for coffee sales. First they have more business on a daily basis. Serving more customers daily increases their chances at selling more coffee.

McDonald’s has recently over the last few years really increased types of coffee drinks that they offer. They have similar premium coffee drinks as Starbucks, such as a Frappie which is like Starbucks Frappuccino. They now have chocolate Frappies along with hot chocolate beverages. They have also recently made their coffee a premium beverage whereas before it was more of a standard coffee. Another advantage that McDonald’s has over Starbucks is the price. For a similar drink you can pay one to two dollars less at McDonald’s then at Starbucks.

The service is much faster at McDonald’s then at Starbucks. People that are in a hurry might choose to go to McDonald’s to get practically the same drink in a much faster time then at Starbucks. Price and time are the main advantages that McDonald’s has over Starbucks. McDonald’s also has a bigger variety of food items that attracts more customers then what Starbucks has. This gives McDonald’s more of an opportunity to sell more premium coffee drinks.

What changes in society help Starbucks become successful? There has been a great increase of coffee drinkers in the U.S. over the years. There are more than 166 million coffee drinkers in the U. S and this number continues to increase steadily since the mid 1990’s. People ages 25-29has increased from 42%-66%, ages 30-59 has increased from 33%-46%, and even ages 60 and older has increased from 14%-20% in their out of home coffee consumption. The biggest increases of out of home coffee drinkers are people who drink coffee at work. These people are more and more buying their coffee outside of the office. Starbucks has made drinking coffee a social phenomenon.

People can enjoy coffee beverages in a comfortable atmosphere while chatting with friends, working on school or work related items, reading a newspaper and more. It allows consumers to enjoy personal time out to relax or hang out with friends. 4. ) What strategic factors account for Starbucks’ long term success in building brand equity? One of the main keys for success for Starbucks in building the brand is their focus on quality, starting by the quality of the whole bean, the freshly roasted gourmet beans, its packaging, transportation, until it’s brewing.

This has served as a main differentiator between Starbucks and other brands. Starbucks has succeeded to position itself as a unique quality coffee provider. Starbucks also managed to build its brand with the perception of a “complete customer experience” by creating a look in their stores that emphasized on comfort in terms of design, colors, furniture, music and even service. The introduction of the coffee shop concept made it a “personal treat” for the customers and a “Third Place” after home and office.

In addition to diversifying their offering to include brewing machines for the customer to get the same quality coffee brewed in its shops. Partnership has also contributed building Starbucks brand, those partnerships with reputable corporations like United Airlines, Pepsi, Kraft, Dryer’s and Capitol Record helped Starbucks to create a positive brand image in the market as it successfully managed to utilize the brand name of these well-known companies for promoting for itself as a brand. Those partnerships showed how Starbucks also cares for innovation by offering new products that would grab different ustomers’ attention. 5. ) What are the advantages of the Starbucks Card to the company and to consumers?

The Starbucks card has been very popular. For the company there can be many advantages. The first advantage is that they are receiving money for items that haven’t actually been sold yet. 27 million cards in use and 400 million dollars in sales in the first quarter in 2008 alone. This card has been so successful for the company that it has been launched internationally. This helps to also build brand loyalty by having consumers to keep returning and filling their cards.

This card is convenient for consumers because it can be reloaded easily at the Starbucks website or at the Starbucks store. It is easier then rummaging through a wallet for cash and it doesn’t have identity theft worry as credit cards do, also no credit is required for these cards since they are prepaid. These also can be great for gift giving to others also. They are the gift that can keep giving. 6. ) What recommendations do you have to improve Starbucks’ competitive position? There are a few things that Starbucks should do to improve competitive position within the market.

I was shocked to find out that Starbucks doesn’t offer any discounts on any of its products or offer any sales for the consumer. In a tough economic market that the U. S. is facing right now many consumers have to spend their money more wisely. I think that if Starbucks had a rewards program of some sort this would help to continue to build brand loyalty. For example with the Starbucks card they could have something set up every $25 or $50 spent on the card they could receive something free or discounted.

They could have some kind of preferred card set up too where the consumer can receive a discount on their purchase. It wouldn’t have to be every purchase it could be on every tenth visit or something similar to that. I think that Starbucks also should have sales. This could be on their coffee products or even some of the other items that they sell. With many other competitors out there such as Panera Braed that offer their customers deals or extra free items, Starbucks really needs to add things that make their consumers feel important. 7. ) Evaluate Starbucks’ mission statement and guiding principles.

What do they suggest about the company? There are six guiding principles about Starbucks. 1. Provide a great work environment and treat each other with respect and dignity. 2. Embrace diversity as an essential component in the way we do business. 3. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. 4. Develop enthusiastically satisfied customers all of the time. 5. Contribute positively to our communities and our environment. 6. Recognize that profitability is essential to our future success.

These guiding principles give Starbucks a business identity and make sure of the strategic targets of Starbucks. In these guiding principles, Starbucks can change their attitude about employees for motivating them. On the other hand, Starbucks also takes the social responsibility. There are seven mission statements about Starbucks: 1. Understanding of environmental issues and sharing information with our partners. 2. Developing innovative and flexible solutions to bring about change. 3. Striving to buy, sell and use environmentally friendly products.

Recognizing that fiscal responsibility is essential to our environmental future. 5. Instilling environmental responsibility as a corporate value. 6. Measuring and monitoring our progress for each project. 7. Encouraging all partners to share in our mission. These mission statements expound the developing target of Starbucks and are suggestions for their developing strategies. In these mission statements, Starbucks researches the now products for their customers, pays attention to its employees, and is in close communication with business partners.

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