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Marketing Management Assignment

Marketing Management
Assignment Case – Trouble Brews at Starbucks

Indian Institute of Management Kozhikode

Executive Post Graduate Programme in Management
(Academic Year 2018-20)

Date of submission: 15 June 2018

Submitted to: Prof. Shawn Mathew

Submitted by:

Sec Roll No Name

B EPGP-10-146 Subhorov Roy

EPGP10 Sec B Roll No: 0135

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Marketing Management Assignment

Starbucks

1. When Howard Schultz launched Starbucks, who was the target market, how was Starbucks
positioned and what decisions about product, price, distribution and promotion supported this
positioning? Wall Street and Starbucks management placed great emphasis on the company’s
ability to continue its impressive growth rate. What were some of the growth initiatives
undertaken by Starbucks and how did they fuel company growth?

Part1: Howard Schultz launched Starbucks with the affluent American working people in mind
who are looking for the third place beyond office and home. He was very clear that this
proposition will be loved by the American people if the same can be doubled up with the best
coffee and best in class service.
Starbucks was positioned as a premium coffee shop where the experience will be far superior to
any other coffee shop. The pricing was slightly premium which did not affect this customer
segment since they did not only come for coffee but for an overall experience.
The distribution of the stores were brilliant and technically there were stores everywhere. The
objective was to be present wherever the client thought of having a coffee.

The growth initiatives were multiple and was largely undertaken by opening up stores
consistently. They also worked on product expansion, new products and being located
everywhere, well almost. The STP was also perfect

Targeting Positioning
Segmenting
Product Specialization – Coffee Affluent Customers Service, Price, Quality and
Availability Strategy

 It’s clear that, in general, the company’s growth initiatives were sound in terms of
generating the growth expected by Wall Street. But which of Starbucks’ initiatives,
in retrospect, were sound decisions for the brand and which were inconsistent with
brand positioning?
a. Sound decisions:
Connecting with customers was a great initiative and till date the same has been
working very well
New product development
Having a Starbucks at all the relevant locations-Mostly
b. Inconsistent Decisions:
Pace of Expansion
Venturing into Movies
Licensing model
Drive In Stores

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Marketing Management Assignment

 What role should foreign expansion play in Starbucks’ strategy?

2. Evaluate the actions taken to reinvigorate Starbucks.

The major actions taken to reinvigorate Starbucks through:-
Bringing back Schultz – the decision of bringing Mr Schultz back was the first step in hope to
revive the situation & they know it’s not going to be that easy as competition is very tough
now and lots of efforts and right strategy would help them to make amends to the
deterioration of brand

National Television campaign - They already started the aid campaign through TV channels
something long ago advocated by Wall Street.

 Key for Success of Quiz Kerala

Solid foundation and great core team of Mr. Srinivas and associates,
Global network of Experienced and skilled research contributors and quizmasters,
Top-notch innovative content and professional delivery,
Well-known brand in quizzing sector and a market leader in Kerala state.

 Competitive Advantage

 Time to market – Quizzing was slowly coming of age in India in early 2000s when Quiz
Kerala entered this market.
 Fundamentally strong – Highly experienced and skilled contributors whose fundamentals
are to seek and spread knowledge.
 Product Differentiation – Reputation of innovative quality content and top notch
professional delivery.
Brand Value - Well-known brand in quizzing sector and a market leader in Kerala state.

 Environmental Analysis

 Micro Environment Factors: Good demand for quiz in schools, colleges and corporate
and govt sectors, reputed educational institutions took quizzing in a serious way, growing
popularity of quiz in Kerala

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Marketing Management Assignment

 Macro Environment Factors: Kerala’s educated population, global outreach due to

migratory population, presence of IT companies and technology driven organizations,
education and intellect based achievement held in high regards in Kerala.

 4 Ps of Marketing for Quiz Kerala

 Product:
Quiz Kerala used the concept of quizzing and developed on the same to establish a strong
brand and organization in Kerala.
They developed a strong team who organized and conducted quiz shows for corporates,
educational institutions, government departments and organizations
The company also organized quizzing workshops and trainings for schools and colleges
They also developed quiz books and prepared quiz columns in newspapers and other
print media

 Price:
The rates offered by Quiz Kerala was competitive when it was compared with its industry
peers. However, when compared to individual quiz performers or unorganized players.
Hence, they established a good brand name for themselves and are the leading quiz
company in Kerala.

 Place:
The company was based out of Kozhikode in Kerala. They were the most dominant player
in the state and was undoubtedly the leader in their space. They operated in the schools,
colleges, corporates, and government establishments. However, they were concentrated
in Kerala and was not expanding beyond their comfort zone.

 Promotions:
Quiz Kerala had developed a very strong reputation for developing quality content. They
had the advantage of being present in a state which had the highest literacy levels and
this helped them establish their business. With their quality output they were an instant
hit in educational institutions, corporates, and government institutions. While their focus
was on B2B segment they also expanded their B2C segment by releasing quiz books and
imparting trainings which helped them create a bond with clients to improve their recall
factor thus heling them establish the B2B2C segment. They were superior to their
competitors and the word of mouth played a significant role in their success.

 Porter’s 5 Forces of Analysis

 Buyers Force: Since the quality of the content is superior the buyers force will not be very
high since they will be delivering on their requirement. There are very players in the
market who will be able to match KQ on content.

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Marketing Management Assignment

 Suppliers Force: The suppliers force will not be high since most of the content developers
are old timers with the QK group and they have been partnering with them since quite
some time. They are being given honorarium for developing the content

 Existing Rivalry: There was not much of competition due to the niche nature of the
industry. However, with the advent of new players with strong financial background QK
was expected to lose ground to these players.

 Threat of Substitutes: The threat of substitutes is high since there quite a few players
with strong financial back up who were spreading their wings. Also since digital content
was on the rise it was very easy to shift loyalty due to the nature of the business and the
new generation is not a brand loyalist. Hence it is critical for the QK to remain relevant
by continuously improving quality and be on the top of technological advancements.

 Threat of New Entrants: The entry of new organized players was not significant due to
the nature of the industry since there were limited organizations. However, the
unorganized sector did pose a threat. It was also critical to remain relevant through
various mediums of communication.

 Decision Dilemma faced by Mr. Srinivas

Quiz Kerala did well so far but Mr. Srinivas knew that Quiz Kerala had to grow fast or else
they would be wiped away by infotainment giants as they realized the potential of the
industry.
He was under decision dilemma for which of the following options would help Quiz Kerala in
future? – Geographic Expansion, other formats of quizzing, development of quiz content, and
entry to educational markets.

 Way forward for Quiz Kerala:

 New Products
Quiz Kerala must continue with its current set of successful products and at the same
time develop newer content which will be primary in the digital mediums. They need to
enhance the product lines and offer the content for the new generation and keep them
engaged.
 Segmentation Criteria
The segmentation criteria they can employ are Geographic and psychographic.

 New Target segment and Positioning

The target for geographic segmentation will be to try new markets. They can build on the
success of their organization in kerala and extend to new states in the vicinity. They can
use their reference and goodwill they generated in schools, colleges, corporates and

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Marketing Management Assignment

government institutions and move to newer markets. It will be easier for them to get
entry to these institutions and markets and then spread their wings.

Quiz Kerala should be positioned as a unique quiz company which specializes in high
quality content and are present across all the formats of quizzing. This will help them
establish themselves in a niche category which they can use to position their brand post
which they can work on establishing their leadership position.

They must also work on the Psychographic segmentation which will allow them to move
to new target segment of students who can then be the advocate of their brand and
further strengthen their position. Developing the content as per the need of the students
will actually help in gaining popularity in the ever growing student population.

EPGP10 Sec B Roll No: 0135