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Transcript of Planet Starbucks
2. Reconnect with consumers by strengthening brand and consumer relationship by recreating the original “community” feeling in Starbucks (i.e. local coffeehouse)
3. Slow domestic expansion and close under-performing stores to concentrate on strategy 5. Recommendations THANK YOU Planet Starbucks 2. Macro Analysis 2.1 Environmental Analysis 1971 1987 1986 1992 George Ouma (6186947) Favorite Starbucks drink - Tall Cappuccino (2 Sugars) Presentation by Yan Aung (1712365) Favorite Starbucks drink - Green-tea Latte Strategic Marketing Agenda 1. Objectives
2. Macro Analysis
2.1 Environmental Analysis
2.2 Industry Analysis
3. Micro Analysis
3.1 Competitor Analysis
3.2 Customer Analysis
4. Planet Starbucks
4.1 History of Starbucks
4.2 Current Situations
5. Recommendations 1. Objectives 3. Micro Analysis 3.1 Competitor Analysis Direct Competitive Landscape Indirect Competitive Landscape Substitutes market share of 4.8%.
largest cafe franchise
Threat: RED market share < 1%.
Threat: Yellow market share of 4.7%.
Fastest growing cafe chain
Threat: RED market share of 4.3%.
Threat: RED 1993, started in Australia
Threat: RED Accounted 85% of total market share
localized products 3.2 Customer Analysis Local cafes 7-Eleven Coffee
650 stores in Australia
Price - $1.00 Bottled Ice Coffee
Available at majority of
stores and supermarkets
Price: $3.5 Coffee Vending Machines
Price: $2 Smoothies & Fruit juices
200 outlets Asian-cultural centric beverages
47 outlets Threat within the industry Threat of substitutes Porter 5 Forces Buyer's Bargaining Power Suppliers' bargaining power HIGH Abundance of choice
No switching cost Threat of new entrants HIGH Low barriers of entry MEDIUM Self-sourcing
Overcrowding of the market MEDIUM Domestic coffee machines HIGH Direct competitors
External competitors (McCafe)
Local cafes 4.2 Current situations 4.1 History of Starbucks Starbucks' mission statements Establish Starbucks as the premier purveyor of the finest coffee in the world, while maintaining uncompromising principles as we grow.
To apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee
To develop enthusiastically satisfied customers all of the time
To Recognize that profitability is essential to future success Primarily relies on its brand name and image to sell coffee
Links its name with unmistakable quality for premium price
Customer focused marketing strategy: targeted at young urbane middle-class; both students and Professionals
Differentiate brand image to foster personal connection for customers through 'the affordable luxury’ concept
Providing a fine coffee experience rather than simply selling inexpensive coffee to maximize volume 1982 Howard Schultz joins as director of retail operations and marketing 1971 First store opens in Seattle owned by Baldwin,Bowker & Siegel
idea from Peet’s Coffee in Berkeley, CA. 1984 Starbucks purchased the assets of Peet’s Coffee and Tea and 1st Starbucks Café Latte served (in the back of stores) 1987 1987-Schultz’s Il Giomale acquires Starbucks, adopts name to become Starbucks Corporation; beverage counter prominently placed in stores (grew from 9-17 locations) 2000 Schultz becomes chairman/chief global strategist & Orin Smith becomes new CEO 2007 Schultz returns as CEO in an attempt to renew the company’s focus on customer experience and innovation.
Closed down 600 stores Marketing the initial experience View Starbucks as “The Third Place”
Marketing in-store: ambiance, music playing, seating, friendly people and friendly staff
Provide high class atmosphere with enough sophistication for a true coffee aficionado
iTunes and Starbucks entertainment (2006)
Customers can also purchase songs playing in the store on apple products. Starbucks' Operation Strategy Key statistics Perceptual map *Canstar Blue Review 2012 Aim To critically evaluate the marketing strategies adopted by Starbucks; the growth and positioning strategies used to develop the brand and major challenges now faced by the company in Australia To critically evaluate the marketing and growth strategies adopted by Starbucks
To analyze the positioning strategies used to develop Starbucks brand
To identify the major challenges Starbucks faces in Australia
To recommend strategies Starbucks could use to re-energize their brands Market strategy
Expensive Bad service
Comfy sofas My paycheck
Morning routine Snobby High price Caffeine rush Nice atmosphere Not healthy Addiction Consumer Insight Activity The wrap up The experience that makes Starbucks unique has taken a back seat to efficiency (Australia) and over expansion (United States)
There has been a loss of focus from their target market and company vision
Operating Costs and expenses are rising, cutting into the bottom line
•Revenue growth is slowing rapidly Moving forward: Three-point plan 1. Increase revenue
Franchise branches overseas (Australia)
Focus on specialty drinks area (Coffee and Tea)
2. Decrease cost
Remove unnecessary products
Slow domestic expansions
3. Enhance/regain the ‘experience’
In store attractions and focus on customer 4. Consider franchising in the international market to take advantage of local market knowledge and expertise
5. Decrease costs by removing unnecessary in-store merchandise to focus on the core business
6. Reposition the strategic focus to a wider target market and align with company vision Class Group Exercise
Target Market Segmentation and Profiling