...business. Starbucks has analysed the marketing mix to develope their brand in many market mostly in the Western country. However, in Eastern one, specifically in Vietnam market, the marketing mix strategy have to be different. This report will talk about the individual elements of the extended marketing mix and how to use the marketing mix in different contexts of Starbucks Vietnam. Starbucks Vietnam Marketing Mix Report 1. The explaination of how Starbuck Vietnam developed products to sustain competitive advantage Product is something that sastisfies a set of want that customers have. In every companies as well as Starbucks Vietnam, when they want to develope new product, they have to follow the eight stages of new product development (NDP) process: Figure 1: New Product Development Process (adapted from learnmarketing.net: New Product Development (NPD), n.d) The first two stages are the idea generation and idea screening. When Starbucks wants to make new product, the company needs to have new idea and the idea needs to be sreen clearly. The idea of Starbucks Vietnam can come from many ways that are from their competitor, through the market analysis or from the holiday, season or popular event. As can be clearly seen that, through time to time, Starbucks has came up with many new idea to survive in Vietnam market. They analyse the coffee culture to create the Asian Dolce Latte to sell in Vietnam as well as Asian. They also has an idea to serve Starbuck tea in Vietnam...
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...The strategic capabilities involves to what extent Starbucks is able to use it resources and competences wisely and which capabilities are creating a competitive advantage. First, a model is made to select the resources from the competences and the unique resources and threshold resources. From these the core competences can be created and implemented in the VRIN-model. Resources Competences Treshold capabilities Treshold resources ● Financial resources ● Suppliers ● Stores ● Equipment ● Staff ● Worldwide stores in more than 60 countries Treshold competences ● Always say yes to the customer ● Personal service Capabilities for competitive advantages Unique resources Tangible ● Coffee ● Located world wide ● Technological resources ( Starbucks app) Intangible ● Brand/Trademark ● Atmosphere ● Word to mouth(online) ● Schooling program ● Loyalty program Core competencies ● Most recognized brand in the coffeehouse industry ● Exceptional customer services achieved through employee motivation ● Focus on high product quality ● Customer loyalty ● High CSR image Table *.* Resources, capabilities and competences of Starbucks With the table above, the core competences can be put in the VRIN-model to see if they have a competitive advantage. Resources and capabilities of Starbucks Is it valuable? Is it rare? Is it hard/costly to imitate? Is it non-substitutable? Competitive implication Located World Wide ( stores in 60 countries)...
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...Table of Contents Introduction 3 1.1 Brief Company Overview 3 1.2 Speciality Coffee Industry and Starbucks Coffee Supply Chain 3 1.4 Problem Definition 4 Literature Review 4 2.1 Current Situation of Starbucks and Older Supply Chain Method 4 2.2 Supply Chain Visibility 5 2.5 C.A.F.E (Coffee and Farmer Equity Practices) Practices 6 Findings 7 3.1 Starbucks’ Operations 7 3.1.1. Material Flow 7 3.1.2 Purchasing System 9 Discussion and Analysis 10 4.1 Starbucks’ 3PLs Strategy 10 4.2 Value Change Analysis 10 Conclusion 11 Appendix A 15 Appendix B 16 Appendix C 17 Appendix D 18 Appendix E 19 Appendix F 20 Appendix G 21 Appendix H 22 Appendix I 23 Introduction 1.1 Brief Company Overview Starbucks is the world’s #1 speciality coffee retailer with more than 20,000 stores n 65 countries (See Appendix G). It operates an estimate of 8,800 of its shops, while licensing and franchises operate the remainder of the stores. The company also owns Seattle’s Best Coffee, Torrefazione Italia coffee brands, Teavana, Tazo, Evolution Fresh, and La Boulange (SCC 2014). Starbucks offers consumers various products including: coffee, handcrafted beverages, merchandise, fresh food, and consumer products of coffee and tea and ready-to-drink (RTD) goods (SCC). 1.2 Speciality Coffee Industry and Starbucks Coffee Supply Chain The speciality coffee industry has seen drastic growth with increase in sales between the 1980s and 1990s. A great number of coffee specialists...
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...Targeting Coffee consumption in the U.S. has been trending down since 1960’s. So Starbucks was extremely cautious in selecting its target markets. A target market, according to Kotler and Armstrong (2004), consists of a set of buyers who share common needs or characteristics that the company decides to serve. The decision of selecting target segments can be assessed by looking at market factors, competitive factors, and political, social, and environmental factors (Jobber, 1995). Price, bargaining power of customers and suppliers and barriers to entry all comes under the market factors, and in the case of Starbucks, their coffee was expensive and they were trying to re-create a new coffee culture in America. Hence, they have low barriers for entry. Since they were extremely careful in each step of coffee making, they tried to maintain a long-standing relationship with their suppliers (Stanley, 2002) and similarly they did not have any real competition threats. Starbucks targeted office workers, with middle to high incomes, who had a desire to purchase premium products. Schultz wanted Starbucks to become the ‘Third Place’, the place between home and work where people could gather, relax and interact with one another. So they were vigilant about their quality control to meet the high expectations. Also they paid a great deal of attention to the details of the store everything from the layout, to the furniture, to the music. Moreover, they were in the ‘introduction’ stage in the...
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...STARBUCKS COFFEE HISTORY Starbucks’s history began in 1971 by three teachers who opened a small cafe called Starbucks Coffee, tea and spice in Seattle, USA. They were assertive about their good coffee and exotic teas. They were selling coffee beans and quality teas for people to prepare at their homes. In the early 1981 they hired Howard Schultz who changed the destiny of Starbucks Coffee as director of retail and marketing. Actually Schultz had an experience with the delicious taste of Starbucks Coffee as a customer and thought. When he became a part of company he was thinking there was something magical about Starbucks like passion he had never felt in business before. Schultz offered company to expand their product range and increase the number of stores. Logos and shops were readjusted. In 1990, starbucks made decisions to create headquarters and to centralize the decision making, thus they could easily stimulated the generation of new ideas. They informed their employee and kept responsible them from strategies in daily contact with each other. Individual Creativity is very important in building an innovation. People from different diciplines working effectively together helps them to solve many problems. In 1996, Starbucks was owning 1015 stores all around the world. The next step was to strengthen the brand. They should change the brands image that it was not only product and service also an unique experience on coffee drinking. They had partnership with United...
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...This paper will discuss the strategy utilized by Starbucks, analyzing the market position, competitive advantage, external environment and will summarize the Porter’s Five Forces. Strategic issues faced by Starbucks will be discussed as well. Howard Schultz bought a Seattle coffee company in 1987 and converted the six coffee stores into an international brand today. Starbucks currently, a publicly owned company with more than 25, 000 employees and 5,689 stores in 28 countries. He is the man behind, and CEO of, Starbucks. Starbucks began as a small company who provided coffee to fine restaurants and espresso bars. It has since, over the last twenty-one years, become the largest retail coffee company in the world. Starbucks has seen its company grow from having a mere 17 stores in 1987 to having currently 5, 688 locations globally. This amazing expansion can be attributed to Howard Schultz, who bought the Starbucks name fifteen years ago. A large reason Starbucks has done so well for almost two decades can be attributed to changes of the coffee image among consumers. The recent popularity of specialty coffee is due to four new consumer trends: 1) the adoption of a healthier lifestyle, which led people to replace alcohol with coffee; 2) coffee bars had become a place where people could meet, and talk; 3) people developed a liking of affordable luxuries, and specialty coffee became the beverage to drink; and 4) consumers had become more aware about coffee, as its popularity...
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...THE HISTORY OF STARBUCKS * Founder: The corporation of the History teacher – Zev Siegel, the English teacher – Jerry Baldwin and the Writer – Gordon Bowker, has established Starbucks. * The man behind Starbucks’s success - Howard Schultz In 1981, Howard Schultz is now Starbucks chairman, president and CEO. From his first time trying a cup of Sumatra, he was impressed by Starbucks and became a member of it in the following year. In 1983, Howard traveled to Italia and decided to leave Starbucks for a short period to set up his own business namely Il Giornale coffeehouses and returned in August 1987 to acquire Starbucks with the support of local investors. In 1996, Starbucks opened their first stores outside of North America in Singapore and Japan. In 1998, Starbucks expanded to grocery store across US and launch their website Strabucks.com. In 2000, Starbucks established license agreement to put up for sale the Fairtrade certified coffee in the US and Canada. In 2008, Starbucks launched their first online community – My Starbucks Idea. In 2010, Starbucks customers had an access to free unlimited wifi at the stores. Until now, Starbucks has build up to over 21,000 stores all over the world, and the company is the leading roaster and retailer of specialty coffee in the world. With every cup of coffee, Starbucks aims to bring their signature tradition and an exceptional experience to life. Since the first time, Starbucks has set out to be dissimilar type of company...
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...Strategic Marketing Plan for the Starbucks Coffee Company Table of Contents Introduction and background 3 Company mission, company objectives 3 Market definition and product or brand background 4 Evaluation of results and conclusion about problem 5 Situational Analysis 5 Internal analysis 5 Customer analysis 7 Industry analysis 8 Competitor analysis 11 Distribution and supplier analysis 11 SWOT analysis – Confrontation Matrix 12 Choice of option 13 Marketing objectives/ expected results 13 Marketing strategy 13 Target audiences 14 Brand and product position 14 Decisions regarding marketing mix elements 15 Objectives for marketing mix elements 15 Strategies and tactics for marketing mix elements 15 Financial indicators and budges 16 Evaluation criteria 16 Sources 16 Introduction and background Company mission, company objectives The first Starbucks café was opened in 1971 in Seattle’s historic Pike Place Market. It was only a small café, but it offered some of the world’s finest fresh-roasted whole bean coffees. The company’s name derives from Moby Dick, the novel was written by the American author Herman Melville in 1851. Starbuck is the first mate on a whaling ship named ‘Pequod’, he is an intelligent Quaker (religious group) and he is from Nantucket. The name evoked the romance of the high seas and the seafaring tradition of the early coffee traders. Starbucks chairman, president and chief...
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...Introduction Starbucks is the biggest coffeehouse multinational corporation in the world. This corporation started out as a retailer solely of whole bean coffees. On a trip to Italy in 1983, Mr. Howard Schultz, an employee of Starbucks, was inspired by the numerous coffee bars in Milan. Upon his return to Starbucks he presented the idea to expand the company into a coffee bar. Mr. Schultz’s idea was rejected, and he parted from the company to start his own coffee bar. After years of great success he purchased Starbucks name and all of its assets. Their coffee service system was built on three principles, which were: hospitality, education, and production. The company is now considered “a premier roaster and retailer of specialty coffee, and operates in more than 50 countries through its company-owned stores as well as licensed retail stores” (Datamonitor, 2011 p. 4). Through a SWOTT analysis, we will see some highs as well as lows of Starbuck along its journey of being a Fortune 500 company. Strengths Diverse product portfolio Knowledgeable employees Brand Image and presence in other distribution channels Customer bond through value-added services Opportunities Entry into the health food market Emerging international retail markets Expanding in the single-serve coffee market Weaknesses High sales costs Weakening US segment Brand image affected recalls Threats Competition Rising prices of supplies and commodity Economic state of US ...
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...Starbucks’ Target Market Abstract/Synopsis Perhaps the most important task for marketing is identifying the consumer base. This is done through market segmentation or STP analysis. Being people oriented is essential because developing long time relationships is what drives successful businesses. Understanding who it is that a company is trying to reach is essential as not everyone is interested in every product or service (Grewal, p.245). While there are many ways to establish a segmenting strategy, as outlined by Grewal and Levy, depending on the company’s unique product line or service, there may be a variety of viable strategies to consider. Starbucks has been successful in part because of their ability to identify who their majority of consumers is, with relation to demographic and psychograpic segmentation, and worked to target those types of individuals in an effort to establish long term relationships. Primary Target Market To identify Starbucks’ target audience for their brand-name, high quality coffee roast, one may look at the demographic distribution of Starbucks consumption. One important demographic-segmentation characterizing within a company’s consumer base is customer income. When a company produces a product, they must market the product price in accordance with their target audience (Grewal, p250). Porsche for example would not market their automobiles on billboards in low-income neighborhoods, because their target audience has to be able to afford...
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...Starbucks is the largest coffeehouse company in the world, with over 23,000 stores in 64 countries, including 12,973 in the United States, 1,897 in China, 1,550 in Canada, 1,088 in Japan and 927 in the United Kingdom. In 1987, the Starbucks chain was sold to Howard Schultz,who is the current CEO. Starbucks’ strategy its mission is to inspire and nature the human spirit — one person, one cup and one neighborhood at a time. Perfect locations Starbucks has stores in some of the most prime and strategic location across the globe. They target premium, high-traffic, high-visibility locations near a variety of settings, including downtown and suburban retail centers, office buildings, university campuses, and in select rural and off-highway locations across the world. Strict selection of coffee beans In order to guarantee the quality of the taste of coffee, every coffee bean should be selected strictly. Starbucks has set up an exact standard for the variety of the coffee beans, the place of origin, the shape of every coffee bean and the method of roasting. Employee involvement The employees play a central role in creating and sustaining the Starbucks experience,not only to brew and serve coffee but to engage customers in the unique ambiance of the Starbucks coffee shop. Starbucks’ human resource practices are tailored,first,to attract and recruit people whose attitudes and personalities are consistent with the culture of the company,and second,to foster trust,loyalty and a sense...
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...1. A) Factors accounted for the success of Starbucks in the early 1990s: It has broad distribution strategy. Starbucks owns nearly one-third of America’s coffee bars, which is more than its next five biggest competitors combined. Almost all of Starbucks’ locations in North America are company-owned stores located in high-traffic, high-visibility settings such as retail centers, office buildings, and university campuses. This made Starbucks a very convenient coffee bar because of the many different locations. They also work with third parties to raise brand awareness and reach new customers. They sold coffee products through non company operated retail channel for example hotels, restaurants, airlines. They partnered with pepsi0cola to distribute bottled Frappuccino beverages. And Dreyer’s Grand ice cream to distribute a line of premium ice cream. Starbucks really pays attention to its employee satisfaction, they believe that partner satisfaction leads to customer satisfaction. They had one of the lowest employee turnover rate in the industry. Starbucks “Just Say Yes” policy empowered partners to provide best service possible, even if it required going beyond company rule. The last thing they want to do is win the argument and lose the customer. They also track service performance using a program called the Customer Snapshop B) Starbucks’ brand image during 1990s * Coffee quality: it offered the highest quality coffee in the world and controlled much of the supply...
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...Starbucks’ Company History Starbucks was formed in 1971, in a single store in the state of Seattle. From just a small store, it offers the world best quality coffees with stores across the globe. The Chairman, Howard Schultz in 1981 had his first coffee Sumatra and has been drawn ever since. A year later he joined the company and went to Italy to see how their coffee shops operate and the varieties it offered. The owners back then did not agree to his ideas because he wanted to change things to be same like in Italy. He then left the company and three years later in 1987 he bought the company from its owners. From the start he set out a different tradition. One that will let customers enjoy coffee from different parts of the globe and they would interact while enjoying coffee. Today the company has over 16000 stores around the world and it’s operating in 63 countries. Starbucks is known to have specialty coffee from different parts of the world. Our mission To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Identifying Consumer Base Identifying consumer base is the most important goal in marketing. This is done through market segmentation. Stabucks company is a peoples- oriented company and this is important for their success in the long-run. Understanding and knowing who they are trying to reach is important. This is because not everyone is interested in the company product or service, (Grewal, p.245). There are a number of...
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...In response to those findings, Gibbons and his leadership team devised a three-step supply chain transformation plan and presented it to Starbucks' board of directors. Under that plan, the company would first reorganize its supply chain organization, simplifying its structure and more clearly defining functional roles. Next, Starbucks would focus on reducing the cost to serve its stores while improving its day-to-day supply chain execution. Once these supply chain fundamentals were firmly under control, the company could then lay the foundation for improved supply chain capability for the future. Starbucks by the numbers Headquarters: Seattle, Washington, USA Total net revenues in fiscal 2009: US $9.7 billion Employees: 142,000 worldwide (as of September 2009) Manufacturing: 5 company-owned coffee roasting plants (Nevada, Pennsylvania, South Carolina, and Washington, USA, and the Netherlands) 24 co-manufacturers (in the United States, Canada, Europe, Asia, and Latin America) 1 tea processing plant (Portland, Oregon, USA) Distribution: 9 regional distribution centers 48 central distribution centers 6 "green coffee" warehouses Deliveries: 2.7 million per year Simplifying the complex The first step of the transformation plan, reorganizing Starbucks' supply chain organization, got under way in late 2008. According to Gibbons, that involved taking a complex structure and simplifying it so that every job fell into one of the four basic supply chain functions: plan,...
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...Starbucks: an example of a successful company due to the use of information. Starbucks is the leading retailer of specialty coffee beverages and beans and related food and merchandise. Starbuck’s retail strategy, which was designed primarily to maintain loyalty and repeat business among its target market (upscale coffee drinkers) encompasses hiring and training knowledgeable counter servers, called baristas to educate customers about Starbucks’ specialty coffee drinks and associated products, and to provide customers with an opportunity to take a break from their busy lives in a relaxing atmosphere. The company has also entered some creative partnerships to put its cafes in Nordstrom and Barnes & Noble stores and serve its coffee on United Airlines. Licensing the brand name for other food products such as ice cream and soft drinks also increases its brand awareness. Starbucks, like every retailer, supports its strategy with its retail mix. With regard to location, individual sites are selected in the most highly visible places possible and centralized cities serve as hubs or regional centers (clustering) for rollout expansion into nearby markets. Its merchandise assortment based on sales distribution is composed of coffee beverages (58 percent), whole bean coffee by the pound (17 percent), food items (16 percent), and coffee-related equipment (9 percent). Coffee beverages are standardized across outlets, but food offerings vary from store to store. Its product pricing...
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