Pearson, K.

Kellie Pearson Professor Dennis Sullivan

February 24, 2018 Principles of Marketing

Marketing Plan Project Part I

Company Profile
For this marketing plan project Starbucks Coffee Company will be discussed and

analyzed on their key marketing strategies and how well that has worked for them through

the years. By studying the Starbucks Marketing Strategy, you will be able to apply the

principle of success that worked for them in developing a marketing plan for your own

unique business. Starbucks would be in the food service/dining industry but what they are

known for among all other things is their specialty coffee. Its stores offer coffees and tea

product, food and snacks, and various food products such as pastries, breakfast sandwiches

and lunch items. They also have licensed trademarks in the grocery and foodservice industry.

You cannot deny their smart partnerships under the Starbucks name such as Teavana, Tazo,

Seattle’s Best Coffee, Evolution Fresh, LaBoulange, and Ethos. Although their brand names

include Frappuccino, Starbucks Double shot, Starbucks Refreshers, and Starbucks Via, this

marketing plan will be focusing on their specialty coffee. According to yahoo finance, the

company operates in four segments: America’s; China/Asia Pacific; Europe, Middle East,

and Africa. Their estimated gross profit in 2017 was 13,348,600.

Starbucks headquarters is based in Seattle, Washington. The first store opened on

Pike's Place Market in 1971. From just a narrow storefront, its name inspired by Moby Dick

and romance of the high seas and seafaring tradition of the early coffee traders, the Siren’s

Eye was created. The sector is services in the industry of Specialty Eateries. All managers
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are food safety certified as well. Starbucks currently has over 300,000 employees who wear

the green apron globally, in 28,039 stores.

Starbucks focuses on the strategy of new products, stronger customer connection as the

“third place” and expanding their store locations in the United States and abroad. Starbucks

was at one point based on socio-Economic segmentation in consumer markets because it was

solely concentrated on social class of people working at the office to be able to have

somewhere else to go to work and have a great cup of coffee.

Starbucks customers have high expectations when it comes to their coffee. They expect a

fresh coffee, that taste great that is handed to them with efficiently and fast with great

customer service. Whether you are in the United States or in the Asia Pacific Region,

Marketing is geared towards ages 22-60, males and females with life-cycle stages from the

bachelor stage young, single not living at home, newly married couple’s young, no children,

full nest I youngest child under six, full nest II youngest child six or over, to full nest III

older married couples with dependent children.

https://finance.yahoo.com/quote/SBUX?p=SBUX

Market Segmentation and Targeting

Starbucks marketing strategy is geared towards the customers’ needs and wants. From

students, employees, and professionals. They have created a culture among partners and

customers that give you a sense of warmth and belonging. You are either a hard core loyal

customer or you are not. Starbucks has positioned themselves in a mono segment position where

they were targeting customer who are willing to pay extra for the quality of product and goods.

However, due to the increasing consumer health awareness they were prompted to switch gears
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and develop coffee and beverages with less calories. The traditional Cafe Misto being one at only

63 calories.

Their marketing efforts are geared towards the consumer. Starbucks uses an unconventional

marketing strategy. When people think of Starbucks they think of a great quality coffee, an

expensive coffee but great quality. You have never seen Starbucks on a billboard, however, from

one store more than thirty years ago in Seattle, there is no denying that everyone knows about

Starbucks. This small business enterprise was and has been continuously multiplying over the

years. Starbucks Corporation is always looking to expand and make that Starbucks Experience

the best every single time.

Not only is Starbucks concentrating on expanding its footprint, but also changing its

store mix. Instead of opening more dine-in restaurants, the coffee giant is concentrating

on drive-thrus in the outer edges of urban and suburban areas. In addition, Starbucks is

opening express stores which essentially function as walk-thrus in New York, Boston, and

Seattle. This strategy is aimed at increasing the company’s store penetration. However, a

force that may counter the incremental growth from the new store openings is

cannibalization. That said, Starbucks remains confident that it will see a minimum 5%

comparable sales growth in the U.S. (SBUX, yahoo finance)

Starbucks is always changing and reinventing itself as a company and a brand. They will

change with the times and always concentrate on what the customer wants first. As their mission

statement says, “To inspire and nurture the human spirit-one person, one cup and one

neighborhood at a time.” Focusing on the coffee first by creating a culture of warmth and

belonging where everyone is welcomes will keep this company in business for years to come.
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Situation and Company Analysis

Economic Environment
Discuss factors that affect your consumers’ purchasing power and spending patterns. What is the
economic environment that you are operating in? Is it a growth, recovery or recession? Will it be
easy to find staff? What is the current interest rate i.e. is it increasing or decreasing? What is
consumer confidence like?
Technical Environment
In 2015 Starbucks introduced mobile order-order-and-pay nationwide. Customer can

load money into their Starbucks account and use its mobile payment application to order items in

advance or to pay at the counter. 30% of the company sales in the United Stated are through the

mobile app. The pattern of accelerated adoption of Mobile Order and Pay has been so successful

that the online company store was closed to focus and perfect the mobile app. With no plans of

slowing down, Starbucks is currently testing a cashless store in downtown Seattle and just

released a co-branded Visa card that lets customers earn and spend reward points.

Continuing to partner with other companies will only help in the technological success of

Starbucks and its brand. Such partnerships include New York Times, Spotify and the

transportation app, Lyft. “Through these investments and the best-of-class mobile and digital

experience that Starbucks delivers, we believe that we are building an unassailable position that

will only strengthen and become more relevant as today’s increasingly mobile-first consumer

economy evolves,” says CEO, Howard Schultz in an interview. The company has also already

started considering increasing productivity of stores in another way by driving evening sales

through offering alcoholic beverages and an enhanced food menu. Therefore, Starbucks

outperforms and is clearly in a class of their own. Starbucks evolves and innovates in a way that

is completely relevant to customers.

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Competitive Environment
As far as competition, Starbucks has maintained it’s edge over competitors like Dunkin

Brands and McDonald’s McCafe. Starbucks has always maintained its competitive advantage by

being the leader in product innovation. The introduction of almond milk in it’s stores and to

other nondairy alternatives like coconut mile and soy.

Starbucks has always had a social conscious. Starbucks has a program to support

economic development in some of America’s low to medium income communities. The store in

\Englewood, IL was an initiative which created 26 jobs with hopes to help solve some of the

problems plaguing the region. It was an opportunity to grow the business but at the same time

allowed the company to become part of the solution for social change. In 2017five stores in

similar communities were opening, some of these regions included Baltimore, Birmingham,

Long Beach, CA, the Miami metropolitan area, and the Greater Seattle Area. (Forbes, )

Political Environment
Even with an economic slowdown, the fair-trade market has continued to grow since

2009. Organic food is the biggest category of ethical consumer products, but Fair-Trade product

quickly gained ground as consumer support swelled for trade principles such as fair prices, fair

labor conditions, community development, and environmental sustainability (Miller). Because

of the growth in 1997 the Fair-Trade Market the Fairtrade Labelling Organizations International

(FLO) was created and the creation of a uniform fair.

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SWOT Analysis

Strengths Weaknesses

 The Starbucks Brand has a strong

presence. You have never seen them on
a billboard. Social media, advertising
commercials that are different and are
targeted at different types of people.
Word of mouth have gotten them a long
way.
 Are resources insufficient for
 The resources available for marketing marketing activities?
activities are word of mouth, and the
 The product that Starbucks sells is what
internet. Starbucks thrives on reputation
and takes advantage of the doors it generates most of their profits.
opens. This gives Starbucks a sustained Unfortunately, coffee is widely
advantage. Strategy based logo available and there are other quality
options. This puts Starbucks on an even
 Does the t company have unique playing field with competitors.
products or services that satisfy the
 Do current products or services fail to
needs of their target market? Starbucks
has found pride in its quality bring value to customers?
atmosphere, product, partnerships and
overall structure.
 Starbucks has created their own coffee
culture.
 What value is brought to customers?

Opportunities Threats

 Partnerships are also a way Starbucks is getting its

name and products into regular stores. Teaming up  What are the tactics that
with consumer product companies like Kraft, Pepsi, competitors use to
and Unilever has allowed them to get products into pursue customers?
grocery stores while sharing logistics coast and using  What are the strengths
existing distribution network. of the company’s
 Does the target market have any unfulfilled needs that biggest and or emerging
the company can satisfy? competitors?

 Are there emerging target markets with needs that the  In what ways are the
company can satisfy? competitors’ products or
services superior to the
 Are there ways the company and its competitors can company’s offerings?
benefit by working together?
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Opportunities Threats

 Are there opportunities for collaborating with  How are competitors

customers to build brand presence? likely to respond to any
changes in the way the
 Describe and analyze if market demand is increasing? company markets?
 Are there changes in the government regulations that  Is the company behind
will affect the company? in adopting new
 Describe any emerging global issues that will affect the technologies for
company? marketing?
 Describe any ways in
which international
competitors are taking
away market share?
 What do customers
dislike about the
company?
 Describe and analyze if
market demand is
decreasing?

Mission, Objectives, and Goals

. Starbucks Mission, “To inspire and nurture the human spirit-one person, one cup and one

neighborhood at a time.” Their objectives are set in their values. With their partners, coffee, and

customers at the core they have truly created a culture of warmth and belonging, where everyone

is welcome. They have always and continue to challenge the status quo and find new ways to

grow the company. In two years I see more growth by at the least 10% with more markets being

introduced to cashless stores, mobile and technical advances, and an even bigger community of

coffee lovers.
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References

https://departments.starbucks.com/sites/company/Documents/Mission%20and%20Values%20-
%20The%20History%20(ph).pdf

https://departments.starbucks.com/sites/career/learn/Documents/MV-Connecting-to-Core.pdf

https://finance.yahoo.com/quote/SBUX?p=SBUX
https://www.forbes.com/sites/greatspeculations/2016/10/13/how-is-starbucks-maintaining-its-
competitive-edge/#7466b5a5759c
https://www.forbes.com/sites/gradsoflife/2018/02/01/opportunity-lost-local-workforce-training-
and-education-policy-change-is-possible/#6e66cc423eb4
https://www.forbes.com/sites/greatspeculations/2016/10/13/how-is-starbucks-maintaining-its-
competitive-edge/#7466b5a5759c
Haskova, K. (2015). Starbucks Marketing Analysis. CRIS - Bulletin Of The Centre For Research &
Interdisciplinary Study, 2015(1), 11-29. doi:10.1515/cris-2015-0002

Preface to "How Can the Fair Trade System Be Improved?" (2010). In D. A. Miller (Ed.), Current
Controversies. Fair Trade. Detroit: Greenhaven Press. Retrieved from
http://ccbcmd.idm.oclc.org/login?url=http://link.galegroup.com/apps/doc/EJ3010625105/OVIC?
u=balt47855&xid=765492b8

Sharon rothstein - EVP, global chief product officer, starbucks corporation (2017). . San Francisco:
Boardroom Insiders, Inc. Retrieved from http://ccbcmd.idm.oclc.org/login?url=https://search-proquest-
com.ccbcmd.idm.oclc.org/docview/1984590767?accountid=3784

https://www.starbucks.com/