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Transcript of Marketing
-serve niche buyers better than rivals
-buyers have distinctive preferences, special requirements, or unique needs
-have unique capabilities to serve needs of target buyer segment
-big enough to be profitable and offers good growth potential
-costly or difficult for multi-segment competitors to meet specialized needs of niche members
-Starbucks has resources and capabilities to effectively serve an attractive niche
-Few other rivals are specializing in the same niche Q&A Thank you! The team: Diana Dorus Romina Tonu Alexandra David Andreea Damian Valentino Virsescu 1970's
The first Starbucks opens : a store that imports the world’s finest coffees to the cold, thirsty people of Seattle.
Howard Schultz joins Starbucks. - While on a business trip in Italy, he visits Milan’s famous espresso bars and he sees their potential in Seattle. - He’s right : after trying lattes and mochas, Seattle quickly becomes coffee-crazy.
Starbucks expands beyond Seattle, first to the rest of the United States, then the entire world.
The Starbucks phenomenon continues. - As of this writing, Starbucks has more than 17,000 locations in over 50 countries. The company’s goal is to find the best coffee in the world and present it to people who would otherwise not be exposed to it.
Starbucks has grown its core business away from just coffee to a diversified portfolio including many different goods :
- Over 30 blends and single origin coffees;
- Unlimited combinations of brewed coffee and tea products;
- Fresh foods : pastries, sandwiches & salads;
- Music, books, and film; Starbucks adopted the principle that consumption research, especially consumption types, must be accompanied by types of consumer research.
For classifying consumers, Starbucks used the following criteria:
*demographic factors (sex, age. occupation);
*psychological factors (temperament character);
*incidental factors (the presence or lack of product on the market, time);
Applying this criteria, SB managed to discoverer a potential market of loyal customers. The marketing mix as a result of combination and dosage of ingredients and resources offers the company the answer to market needs and demands.
The marketing mix is the result of the action of external complexity factors, of an endogenous and exogenous nature.
The 4 P’s were the key variables with which SB managed to obtain the desired impact upon the targeted market and reflected the way that the companies resources were coached in obtaining the desired effects. •Maximize market penetration – “Starbucks everywhere approach”
•Provide relaxing, attractive social atmosphere – “Everything matters”
•Offer high-quality products
•Create a great working environment
•Achieve profitability „To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”.
Provide a great work environment and treat each other with respect and dignity.
Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.
Develop enthusiastically satisfied customers all of the time.
Contribute positively to our communities and our environment.
Recognize that profitability is essential to our future success. "To establish Starbucks as the most recognized and respected brand in the world."
This is a picture of what the company wants Starbucks to become:
'number one’, or ‚above all others’, but there is no numeric goal, or timeline for this objective.
Starbucks only uses the finest coffee beans when brewing its variety of blends and therefore wants to be looked at with the respect of a company that uses and provides the best.
Desires a top of the mind recognition: Starbucks not only wants consumers to remember who it is, but think about Starbucks first, having a shining image. Being the world leader in its industry, has controlled the access to distribution channels in an attempt to create a barrier of entry.But, Starbucks’ success key is the constant innovation and strong product differentiation in their industry. Due to the high competition, the customers can easily switch to another coffee shop if an issue should arise. Furthermore, the high quality of services provided by the competition and the aggressive advertisers, are making it very hard for Starbucks to create customer loyalty. Innovation - Adapt-or-Die theory of marketing
Strong Financials and Profits -> new business rapidly
Internationally recognized and global presence -> high brand awareness
The reputation of fine products and services
Focus on opening stores that have convenient access for pedestrians
Certain level of know-how -> flying start, outperforming Strenghts Vulnerable to the possibility that their innovation may falter over time -> Reliance on beverage innovation
The way Starbucks coffee is served: paper and plastic cups
->in contradiction with the high prices Starbucks stores can not be found in super-markets
The self service is contrasting with the high prices charged
Sells moderate to good quality coffee against a premium price
Starbucks sustains competitive advantage by:
-constantly looking for new ideas
-new experiences for guests
-offers a selection of music, and unique designed coffee mugs.
-market trends are constantly being monitored-commitment to efficient, reliable and responsive service, augmented by a friendly staff
Co-branding with other manufacturers of food and drinks
->creates loyalty for the brand
Investment in New and emerging Markets, since their focus is in US
Serving coffee in original Starbucks mugs
->communicates a more luxurious feeling
->allows people to enjoy the coffee at the store
(customer bonding and loyalty) Opportunities Threats Increasing Competition:
-Competitive coffee shops
-Copy cat brands
Change in Customer Perception
Competitors copying the Starbucks concept
-> behavior and winning formulas SB marketing follows the principle according to which the relation client – brand is reflected in the relation between client and the man behind the bar therefore a TV campaign can’t capture the brands essence and the unique client - brand relation. Nevertheless SB provides advertising campaigns on specific products and on holidays buys space for TV commercials and press spots.
These campaigns are exceptions for the marketing policy, SB spending less money on advertising then other big retailers.
SB does not even pay for product placement in movies. Surely you’ve seen a lot of American movies (devil wears Prada) in which stars drink SB. This type of promo is obtained free.
The SB parties are no or low budget. There are big events, such as Miami Samba Party others are glossy and full of stars and are sponsored in relation with other brands.
In a way, the SB marketing approach looks like the promotion method before mass media gaining control, replacing advertising with community oriented communication. The “4C”
Customer with certain needs
Cost sustained by the customer
Commodity of acquisition
Being one of the companies that took into consideration the relation between the 4p and 4c, managed to manipulate the mix marketing ingredients in such way to obtain the competitive market advantage. Starbucks philosophy is not mass sell based, but loyalty and repeated purchase, that is why the business depends on the shop experience and loyalty building towards this direction. The Sb essence does not resume to coffee, although products quality bring success, but to the ritual of coffee tasting. This is the reason why SB does not pay for advertising that can’t sell a sensation and prefers to invest in new shops so that can be closer to consumers.
SB is one of the companies which successfully looked at business with the eye of the consumer, therefore SB developed the 4C of buyer.
Therefore, in the companies’ perception the target market which is likely to embrace the Starbucks lifestyle where classified as:
Young people in between 18 and 25, with medium or high education – the explanation for this category was its exposure to the american lifestyle that its trying to copy. This is about young that watch MTV, use constantly the web, occasionally eat at MCDonalds and KFC, like music and the most important, are financial sustained by parents. Starbucks explained that this group is easy to impress and if the company manages to create a cool image of its brand the young people will be loyal.
The successful of advertising, commerce, media and so on, whom lack of time but need to enjoy a good coffee at the right moment.Those are independent, mature, active and self aware of their own value persons.
Tourists and foreign businessman – these will be attracted by the cosmopolitan mentality of coffee shops and if they come from a country where Starbucks already has business they will for sure appreciate Starbucks coffee. Price Promotion Place Improvement of the strategy Smaller cups at a smaller price have shown to generally boost sales; Starbucks' corporate ideology is a premium price. € Starbucks wants to create an experience for their customers that combine their on-the-go schedule, as well as a place to relax.
"A place that would be separate from home or work, a place that would mean different things to different people"
"People come here for the coffee, but ambiance and services are what makes them want to stay”
Senior Vice President of North America 1=1 + 1 free campaigns tend to increase the customer loyalty; Out with the bad
Cheap paper-plastic cups
Medium to high quality coffee at a premium price
Low quality service - "Will that be a Tall, Grande or a Venti?" In with the good
High quality service: “Will that be small, medium or large? Do you prefer it black, medium-sugar or extra-sweet?”
A new modern look: Weaknesses In the current economy is determines the customers to seek cheap(er) replacements to Starbucks’ high prices. This trend is the Starbucks’ downfall in Romania, mainly because the company doesn’t acknowledges this fact and isn’t taking any action. The quality of coffee sought by Starbucks is very high. In 2001, Starbucks announced new coffee purchasing guidelines for controlling the power of supplier. These guidelines are based on the following four criteria: Quality baselines, social conditions, environmental concerns and economic issues.