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
- 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.
- 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