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Starbucks: Marketing Plan

Porter's Five Forces Analysis

Market Development

Market Penetration

  • Entering new market segment & converting non-customers to customer
  • When a business breaks into a new market where other businesses already have similar offerings.
  • Starbucks breaking into gelato and ice cream business, where there are businesses with those products already.
  • Companies such as Talenti gelato

Diversification

Threat of Substitutions

PESTEL Analysis

  • Entering a new market with a new product.
  • Entering the Ice Cream/Frozen foods industry with Creme Glacee
  • Allows for expansion, new customers

Bargaining Power of Buyers

Product Development

  • Rivalry among existing competitors
  • Threat of new entrants
  • Bargaining power of buyers
  • Threat of substitute products
  • Bargaining power of suppliers
  • Customers can shift to substitutes from other coffee shops or instant beverages and other goods from grocery stores
  • Supermarkets
  • Coffee, Tea, Food

  • Customers can shift from Starbucks to another brand because it is affordable
  • Stay away because there are so many other options

  • Creating & introducing of entirely new product.
  • Creme Glacee
  • Branching out
  • Bringing new customers
  • Products for adults and kids

Starbuck's Overview & History

History

Mission Statement

What is Porter's Five Forces?

• While in Italy, the coffee bars there inspired Schultz

• Recognized a great opportunity and began working with the founders

• He brought the Italian café culture to the United States and started selling espresso by the cup

  • Starbucks is one of the biggest specialty coffee industry in the world.
  • Starbucks Corporation is an American global coffee company based in Seattle, Washington.
  • Known for its quality in coffee
  • Blends of coffee, handcrafted beverages, merchandise, and food items, ready-made drinks and refreshments, free WiFi
  • Model named after Michael E. Porter
  • Takes five market forces that play out in a company or industry
  • Model helps examine the company's strengths, weaknesses and potential risks

"To inspire and nurture the human spirit- one person, one cup and one neighborhood at a time."

  • They live for these values:
  • Creating a warm welcoming environment for everyone
  • Finding new ways to grow the company and each other
  • Ethically sources the finest coffee beans
  • Provide human connection with employees
  • Embrace diversity

Product

Price

Place

Bargaining Power of Suppliers

History

  • Low fat/ Non-fat frozen yogurt
  • Creme Glacee--- Name of the new product
  • Variety of flavor--- fruit based flavors and coffee based flavors

History

  • To stay consistent with Starbucks brand, Creme Glacee will be priced within the same range as our Frappucino's
  • The one advantage that Starbucks has is its Brand--- Starbucks will still maintain its profit maximization
  • Starbucks is a major consumer for most of its suppliers
  • Don’t take advantage of suppliers,

they have a partnership with them and increases their bargaining power

  • Crème Glacee will be sold exclusively at Starbucks locations and it will be offered during the summer season.

  • Starbucks has loyal customers that look forward to their seasonal beverages/treats. Customers would not see it as odd if Starbucks added summer treats

Threat of New Entrants

Rivalry Among Existing Competitors

  • The first Starbucks store opened in 1971 in Seattle's Pike Place Market.
  • Founded by Jerry Baldwin, Zev Siegal & Gordon Bowker
  • Howard Schultz joined the Starbucks team in 1982.
  • Later becoming President and CEO

Promotion continued

Promotions

Competitive Analysis

  • In store and online surveys will be offered to customers to complete, to determine if any changes will be needed  

  • Social media will also play a major key, Starbucks has 8.2 million followers on Instagram, and over 28 million fans on Facebook.

  • We will use social media for advertising and also offer special discounts and coupons to social media fans.
  • What is better than a cool refreshing gelato on hot summer days? print advertising will also conclude simple images that will accompany Starbucks, promotions.

  • This include promotions in magazines and newspaper to target market reach. There will also be an in store display which will attract the consumer’s interest.

  • Another key point that will help in terms of promotions will be free, in-store product sample, this will help measure in terms effectiveness of the market.
  • Dunkin Dounts & McDonald's
  • Due to switching cost
  • Easy for customer to shift to other brands
  • Price and Flavor

• Shortly after Schultz went on his own and purchased Starbucks from the founders and began to expand throughout the US.

o Company grew tremendously

• It went public in 1992

• Starbucks began expanding its brand by;

o Starbucks coffee on United Airlines flights

o Operating and selling products in local grocery stores

• Today, Starbucks has millions of customers everyday

o Employed approximately 1,820,000 partners worldwide

  • Significant but not strong enough effect on Starbucks
  • Can compete, but difficult to establish a brand like Starbucks

  • Coffee Shops
  • Starbucks: 12,500 shops
  • McDonald’s: over 31,000 shops
  • Dunkin Donuts: 6,700 shops

Overview

Ansoff Matrix

• Created an atmosphere where you can enjoy coffee and do your work at the same time

• Considered the largest coffee-house company in the world

• Operates across Asia-Pacific, the Middle East, Africa, Europe and the Americas.

o 20,891 stores in 63 countries

Earning Growth Forecast

A strategic planning tool used by executives, managers and markets.

What strategies will work best and benefit a company most?

SWOT Analysis

Annual Revenue Forecast

Weaknesses

Opportunities

Strength

  • Diverse their products not only in coffee.
  • Strong financial support.
  • International growth
  • High pricing because of the quality ingredients used.
  • Strong preference in the U.S.
  • To reduce business risk, expansion is needed.

Threats

  • Leading retailer & roaster for brand specialty coffee in the world.
  • Known for providing superior products and services.
  • Consistent high quality of service.
  • Limited number of strong competitors.
  • High market share and market growth
  • Rising coffee bean prices.
  • Imitation goods

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