Starbucks Corporation has succeeded tremendously for many years. Since both vertical and horizontal convergence is part of their corporate strategy and their marketing strategies. The acquisition that serves both company processes and the supply chain can be seen as vertical integration in Starbucks. The creation of the various goods created by the company can also be seen as horizontal integration. Marketing research is typically very important for any changes that may affect clients or effect on customer engagement services during the synthesis of operations. Starbucks Company has been conducting proper marketing research on its daily substitutes, and its coffee beverages which are handcrafted. It is also very much important to consider that the Company has all its attention in monitoring the social media network for both consumer complaint and also consumer brand affinity. Starbucks Company usually asks for the suggestion of the customers concerning how their services are being rendered to the customers. This is very important because it enables the company to have proper feedback that is needed by them to improve their sales and their profit making.
Starbucks Company has employed many methods in conducting their marketing research. These methods are mentioned in this paragraph. Firstly, cultural trends were used to analyse the daily problems, health issues and also allergies. Secondly, environmental factors were considered in the supply chain management. Thirdly, the social media was used to measure brand satisfaction. Fourthly and finally, in-store product testing was also used to test the quality of the product. The store testing indicated that there were some products that the company needed to improve on, for instance, coconut milk. Starbuck_x0092_s president of Brewed Espresso Md. Christine stressed to the Company producing what the customers want.
Competition for Favourite Products
In the past recent years, the Starbucks Company has entered into a competition battle with Dunkin Donuts and McDonald_x0092_s for the production of best coffee in America. Customer preferences and desire considerably affects the competition battle. Aforementioned has hence made both the three companies to work hard to expand their menu options and also their physical store locations to reach their customers and also to take their customers away from their primary competitors.
Dunkin Brands are the owners of the Dunkin Donuts which also produce quality coffee. The company began the coffee business in the year 2000, and now it_x0092_s a purely coffee shop. McDonald's, on the other hand, is a company that produces coffee and what makes it compete with the Starbuck Company is that it presents a more substantial menu compared to other best coffee production companies.
The Starbucks Company began nearly thirty years ago with a single store, and it has grown and become very prosperous. It has always been considered as the best coffee place to work in and socialize, unlike its other two main competitors. This is a concept that corresponds to the company_x0092_s marketing approach. From the beginning, this firm has always worked very hard in making sure that there has always been a place for consumers to stop and take coffee on their ways from home to work or from work to their homes. They have provided their customers with a relaxed environment, and that is why it is beating its main competitors in the coffee field. This means that if Starbuck continues working hard, it will maintain its top position. The tactics that have been used by the company are what makes the company to always maintain its top position compared to the other competitors of the Starbucks Company.
PESTL and Its Effect of Introduction of a New Product/ New Service
Beginning with political factors, it leads to the regional market integration. It has also improved government support on infrastructure. Political factors have also led to bureaucratic red tape in the countries that are still developing. Regional Integration is an external factor that gives a chance for the Starbucks Company to expand globally. Governments all around the world work hard to make sure that the infrastructure of their countries is good. This is very important because it creates a very high opportunity for Starbuck Company to access more suppliers and many more markets. On the disadvantage side, the bureaucratic red tape is a factor that hinders many companies especially the Starbucks Company to expand globally and economically.
Economic factors have led to a decrease in the unemployment rates, high growth of countries that are still developing and finally, high economic growth in already developed countries. The reduced unemployment rate has created opportunities for the Starbuck Company to have more revenues from different markets all over the world. However, the rising labour cost has also led to an increase in the company_x0092_s spending. Hence, this is a disadvantage to the Starbucks Company.
Social, cultural factors have led to the growing of coffee culture, growing or middle-class social class, and finally, it has increased health consciousness. Growing of coffee culture has led to more demand for coffee. This has therefore given the Starbuck Company opportunity of producing more coffee and this, in turn, increases the profits that are being made by the Starbucks Company. Growing of middle class has also led to more demand for coffee from the company. The company has also been forced to produce coffee which is mild and favours the health of its consumers.
Technological factors, on the other hand, have increased mobile purchases, improved coffee farming and finally, it has led to the availability of coffee machines to be used at homes. Technological factors have enhanced the Starbucks services, and it has made that company to gain a lot of revenues through online purchases. Starbucks Company has also improved its supply chain efficiency following the introduction of new technologies. However, there is a threat to the Starbucks Company that has been caused by the introduction of home use coffee machines. This is because many people prefer making their coffee and that is a significant disadvantage to the Starbucks Company.
Finally, legal factors have led to introduction of production safety rules and regulations, GMO regulations which are outside of the United States of America and eventually, it has increased employment regulations. The first to impacts of the legal factors are advantages to the company and also the government because it is there that the relationship between the government and the business are defined. The last one is an advantage to the company itself because it has rules and safety regulations of the employees of Starbuck Company (Thompson, 2014).
SWOT Analysis and Its Use in the Marketing Plan
The strengths which will be discussed in this paper are profitability, quality, and ethic ability. The Starbucks Company has established itself in such a way that it is coffeehouse chain which is very high compared to other food chains in the world. The products that are being produced by the Starbuck Company are of very high quality the products are also environmentally friendly and consistent between different locations. As a result of these strengths, the Starbucks Coffee Company can charge its customers high prices on their coffee products of which most of the customers are willing and ready to pay for the coffee. This means that the company can make a lot of profits.
Like any other company, the star buck company also has its weaknesses. The weaknesses that will be discussed in this paper are; high price point, lack of production of unique products and global expansion. As much as the high price point is a strength, it is also a weakness. It might make loyal customers cease to be loyal because they will think that the cup of coffee is very expensive. The company produces standard coffee, but it has no unique products. Finally, many factors tend to hinder the company_x0092_s global expansion.
The threats that will be discussed here is the primary competition for cheaper substitutes. Since their coffee price is very high, the Starbucks Company faces typically a very high competition from other companies that sell cheaper coffee.
Opportunities are global expansion across the world. There are very many regions in the world that rely on coffee; hence it can be a very great opportunity for the Starbucks Company to expand globally (Schultz, 2012).
Segmentation, Targeting and Positioning
The main segmentation criterion that has been used by the Starbuck Company is the segmentation which is psychographic. This segmentation targets its customers typically according to their lifestyle and their attitude on the fair trade. The vital consumer for the Company is a coffee consumer. The Starbucks Company has therefore tried every means possible in making sure that they reach their customers through advertisements and also other promotional materials that have a reflection on the quality of coffee that is being produced by the Starbucks Company.
There is another advertisement on the US website that well displays the company_x0092_s dedication to providing customers with the best coffee quality. The last image in this advertisement displays the product promotion of the new products that are manufactured by the company. These posters are meant to target those people who need excellent coffee experience. Emphasizing on company_x0092_s social role has also made the company develop a market consumer strategy that makes consumers involve d in the goods that are being produced by the company.
The most important thing is the fact that Starbuck is a company that is a daily life brand and the corporation aims to attract a broad population of consumers and also to offer many products to the no coffee users. The STP strategy is also beneficial since those serious coffee consumers have common needs and even respond the same way to the market needs and proper marketing can reach them. The targeting and segmentation that has been used by the Starbucks Company give the company an opportunity to place itself as a company with high price value brand (Table, 2014).
New Products/ Services Launches or Brand Management: Success or Failure
The Starbucks Coffee Company founded nearly forty years ago, and it initially sold only the coffee which was the whole bean. After sometimes, it started selling coffee brewing machines. Initially, it sold both spiced tea and coffee, but afterward, it began selling coffee alone. Starbucks Company sells well branded hot and cold drinks and also well-branded coffee beans. The Starbucks Company has had the best Global Brands. This was branded by the inter-brand ranking. The name Starbucks is a brand itself. This title was inspired by Starbuck, a class American Novelists. The logo of Starbucks is also a brand since it has an attractive mermaid and even the name of the company. This brand has much strength. It brings out the best in a cup of coffee. A cup of coffee is designed in such a way that it has the picture of a beautiful mermaid and has also been decorated with stunning colours (Table, 2014). The Starbucks Company has too stressed on coming up with a perfect third place for everyone to visit on their way from home to work. Those mentioned above was invented by the brand management and is very important since it makes the company unique compared to its competitors. When new products are being introduced in this business, the new product is given its brand that differentiates it from the other products. The brand management has also ensured that the company portrays itself as a mixture of the American life and as well the European experience. In summary, this company delivers its promises typically through producing high-quality products, treating its staff well, good customer-company relationship and also providing ample place for people to take their coffee (Thompson, 2014).
_x000c_References
Gallaugher, J., & Ransbotham, S. (2010). Social media and customer dialog management at Starbucks. MIS Quarterly Executive, 9(4).
Koehn, N. F., & Grundy, W. (2011). Howard Schultz and Starbucks Coffee Company (TN).
Mosley, R. W. (2017). Customer experience, organisational culture and the employer brand. Journal of Brand Management, 15(2), 123-134.
Schultz, H. (2012). Pour your heart into it: How Starbucks built a company one cup at a time. Hachette UK.
Table, S. (2014). Starbucks Coffee Company.
Thompson, C. J. (2014). Special Session Summary Beyond Brand Image: Analyzing the Culture of Brands. ACR North American Advances.
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