STARBUCKS

1
STARBUCKS
2
Company Information and Background

• Starbucks is known as the worlds 1 specialty
  coffee shop and has around 10,000 stores in more
  than 30 countries.
• Starbucks is known as one of The Best 100
  Companies to Work For, and was ranked fourth as
  one of the Worlds Most Influential Brands
• The Starbucks company website explains that
  Starbucks is named after the first mate in
  Herman Melvilles Moby Dick

3
Mission, Goals, and Objectives

• Starbucks states that its mission is to
  establish Starbucks as the premier purveyor of
  the finest coffee in the world while maintaining
  our uncompromising principles as we grow.
• Starbucks goals are to remain profitable and to
  produce social, environmental, and economic
  benefits worldwide.
• The companys objective is to establish
  Starbucks as the most recognized and respected
  brand in the world.

4
Business Structure

• Starbucks is a corporation.
• Howard Shultz is the company chairman and Jim
  Donald is the president and CEO of Starbucks.
• Starbucks owns around 6,000 stores and offers
  licensees and franchises to run additional stores
  worldwide.

5
Competition

• Starbucks top competitors are Caribou Coffee,
  Diedrich Coffee, and Dunkin Donuts.
• Starbucks also competes with popular coffee
  manufacturers including Kraft General Foods,
  Procter Gamble, and Nestle. Kraft owns Maxwell
  House, and Procter Gamble owns Folgers.

6
Market Segmentation
7
External Influences

• Target Market
• Starbucks is a business that is applicable to a
  diverse group of people.
• Starbucks considers itself the third place a
  place between work and home. 1
• Suburban young adult
• Professional on the go
• Age18-35
• Single I

8
Internal Influences

• Need Set
• For the busy professional, Starbucks products are
  delicious, affordable and easily transportable
  goods that may be used for the need of hunger,
  craving, or caffeine.
• For the young contemporary individual may see
  Starbucks as a trendy location to converse and
  gather with friends.
• Emotional Influences
• Energy Boost
• Stress Reliever
• Celebration

9
Situational Influences

• Physical Surroundings
• Decor
• Wireless internet
• Lighting
• Temporal Perspectives
• Drive Through
• Hours

10
Decision Making Influences

• Brand Loyalty
• Starbucks is the leading brand and coffee shop
  out of all chains and independent coffee vendors,
  making brand loyalty of customers, a major
  advantage
• Starbucks has a reputation for being a delicious
  product, making the coffee drinking experience
  more of an indulgence than a routine

11
Product and Product Position
12
Starbucks Product Line
13
Starbucks offers a wide product line

• Hot and cold coffee beverages
• Tazo tea
• Non-caffeine drinks Hot chocolate, apple cider
• Ice cream, Frappachinos
• Food- breakfast foods, sandwiches, desserts
• Books, Cds, board games, equipment
• Gift Cards, mugs

14
Product Positioning

• Strong value proposition
• High-quality products
• Great service
• Consumers perceive Starbucks as being the best
  coffee around
• Consumers are willing to pay premium prices
  because of this perception

15
Great quality and customer service leads to

• Starbucks exceeding customer expectations
• High satisfaction levels
• Loyal and repeat customers

16
Pricing and Distribution Strategy
17
Pricing

• External
• Starbucks focuses on conspicuous consumption
• Designer coffee brand due to them pricing above
  the market rate for a cup of coffee
• Consumers want to consume a luxury brand

18
Pricing

• Internal
• Status indicator ? I am drinking Starbucks I
  have money to enjoy a luxury beverage.
• Target market purchases the brand name
• Situational
• Consumers like spoiling themselves with the
  Starbucks brand (they feel that 3 for a cup of
  coffee/coffee beverage is money well spent)

19
Pricing

• Decision Process Factors
• Each different Starbucks location is priced
  differently (because people are willing to spend
  more for example in New York City, than Towson,
  MD)
• Towson University Starbucks on York Road Pricing
  Guide

20
Distribution Strategy

• Luxury coffee with an environmentally safe
  mindset
• Convenience (with many Starbucks locations) is
  what the population segment wants
• Starbucks used for business meetings (wireless
  Internet available at all U.S. locations), a
  social venue and place to just sit and relax

21
Distribution Strategy

• Consumers are able to enjoy Starbucks wherever
  they are (multiple locations)
• Retail gravitation model (consumer will pick
  store based on store size and distance from
  customer)
• Brand first, then the outlet second

22
Promotion Strategy
23
Promotion Mechanisms

• No direct promotions
• Commercials
• Movie promotions
• Akeelah and the Bee
• Walking Advertisements
• Customers carrying cups

24
In Store Promotions

• Black Apron
• Drink of the week
• Equipment

25
Television Promotions

• Unnecessary
• Several locations
• Double Shot Espresso
• Bring on the Day
• Last aired Spring 2005
• Caters to target market
• http//video.google.com/videoplay?docid1264727438
  510422007qstarbuckscommercialpltrue

26
Customer Service and Feedback

• Highly trained employees
• Environmentally-friendly and conscious to
  consumers
• Great relaxed atmosphere/ambiance
• Friendly communications between customer and
  employees

27
Regulations

• Coffee temperature-timing of delivery
• Warning labels- Notifications of hot beverage,
  Contents Hot Beverage Inside
• Protective sleeve provided
• Additional mission statement for environmentally
  sound products

28
Recommendations

• Increase the number of drive-thrus
• Corporate catering
• Keep stores open later at key locations
• i.e. high area/city stores
• Enhance the retail aspect of the business
• Add more food options in stores

29
QUESTIONS?