Marketing Plan Of Starbucks Assessment Answer

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Question :

Part 1: Brief introduction linking to your Assessment 1 Strategic Analysis 
  • Briefly summarise strategic implications conclusions from Assessment 1
  • State which opportunity / opportunities your Strategic recommendations report will address, include justification for your decision
Part 2: High-level marketing strategy objectives and revenue mix
(What your strategic marketing strategies aim to achieve)
  • Define marketing objectives and discuss how these objectives will be met by the product-market strategy/ strategies you recommend (note that these should be linked to the opportunities identified above)
  • Outline your rationale for your recommendations using strategic marketing tools to support your arguments.
Part 3: Strategic Positioning recommendations
(How your top-line objectives are to be achieved)
Segmentation and Targeting 
Recommend market segment/s to be targeted
  • Outline market segmentation and state the rationale for your targeting strategy
  • Clear definition of target market/s
Development of a brand positioning strategy
  • Recommend and outline a customer value proposition strategy
Part 4: Customer value creation mix, communication and delivery strategies
(broad strategic directions – the ‘big picture’)
Broad overview of proposed implementation plan
Clearly outline your strategy implementation recommendations , including:
  • Resource allocation for marketing activities
  • Action plan
Part 5: Evaluation and control mechanisms to monitor performance over the strategic plan timeframe
Outline your recommendation for system / tools to monitor and evaluate performance
Total report


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Answer :

Marketing Plan of Starbucks

Executive summary

         Countries like , New Zeeland  is known for its coffee culture , i.e. the people here have a keen interest towards this  hot beverage . The customers here are appropriate to do business . But after years of courageous effort this company finally accepted their defeat to build a good customer base in New Zeeland. Hence, the report is suggesting to change in marketing strategy for deeper penetration in New Zealand Market.

Part 1: Introduction (Linking to part 1 strategic analysis)

 In the year 1971 , Gordon Bowker set up Starbucks in Seattle , Washington DC , United States of America . Today this Coffee chain company is perhaps the biggest coffee brand all around the globe . Through out the globe this company has many outlets and franchises . In New Zeeland they did for some 20 years of business before leaving the New Zeeland coffee market . New Zeeland limited handed over the licence to a company called Tahue Capital . But over the past few years , this company is facing a hard time of exponential degradation in their market share , for instance he numbers of coffee outlets stands 34 in Australia , which were 85 at a time . Thus, it is noticed that the strategic plan for marketing for the company is lacking somewhere .

There are many varieties of products that Starbucks offers , pastries , sandwiches , fries , smoothies and of course over 30 variations in Coffee blend . But the primary focus of this company was to sustain and expand with their name , based under the Coffee-maker shoe .

 It is very unlikely to see that the main competitors of Starbucks in these above-mentioned countries is not the rival coffee chains , but the road-sided coffee shops and of course some small chains like Muffin Break , Coffee club .

1.1 Extraction of  Conclusion from Assessment 1 :

There is no doubt that Starbucks is the leader in the global chain of coffee brands , the numbers do tell the whole story here . But  instead of having so  good customer-base Australia and as well as in New Zeeland the company did fail to sustain gracefully even though it did leave its footprint in style at the very first place . A great take away from here is the pricing issue, which needs to be monitored while developing a new strategy .

1.2 Recommended marketing strategies

A must add-in in the marketing strategy for the executives of Starbucks is this pricing issue . Starbucks is a premium coffee brand among the modern-day pioneers  in the coffee business industry around the world . Both of their service and the quality of the products that they offer are undoubtedly very high in class . But at the same page it should be noted that the other classy coffee chains also do not compromise in quality nor in service, as good customer service is getting more and more prioritized day after  day . But these rival brands do keep their focus on the pricing of their products , according to market conditions they keep changing it very frequent . But Starbucks on the other hand , give very low priority to their costing and taxation, although their pricing is very much higher compared to these rival brands . Thus, the marketing executives should take initiative to control their price , perhaps  introducing a new price list for the existing products will be very much fruitful for the company if they  want to progress in these two countries further more .

Part 2: High-Level marketing strategy objectives and revenue mix

2.1 Marketing objectives

Objectives always give direction to organization. Usually these objectives are expressed in ROI,ROA or EPS. These objectives are called high level objectives(Reed, 2003, pp 106). . These are too high for marketing level and needs to be broken down in smaller parts.

Hence the marketing objective for the Starbucks in NewZealand is to increase market share.

2.2 Product market Matrix

There are four different matrix in this. There are two dimensions product and market. Based on these 2 dimensions, matrix is divided into four quardents((Reed, 2003, pp 107). . These four quardents are market penetration, incremental innovation, Market development and redical innovation. Out of these four, Market penetration is recommdended to choose to fullfill the marketing objectives.

2.3 Rational

The main focus here is to analyse the existing market and draw some valuable insights that might facilitate Starbucks . Market penetration is designed to increase market share and persuade exisitng customer to increase usage through lower pricing.product market matrix


(Reed, 2003, pp 107). 

Part 3: Strategic Positioning recommendations

We first do select our customer-base here and inspect that what is coming in our way .Customer profiling is done here , their income , age group , no of members and some other confidential information’s are collected to adopt and execute new pattern in our defined strategy . Primary and as well as secondary competitors are selected here . Thus it is the most import of all steps here.Strategic Positioning recommendations

3.1 Segmentations

Marketing segmentation is strategy to devide market based on similar charactostics because similar charactorstics exhibit similar purchasing behaviour (Reed, 2003, pp 111). . Customer segmentation is the most and crucial steps of all . Here we select the targeting customer base and pursue accordingly . First we consider the demographic point of view and then switch on to the life-style , we let us determine that what kind of customer is suitable for us to do business with . Then we select the places where we can find them and how to get their attention towards us , for Starbucks it would be easier as they are in the New Zeeland coffee market over the past two decades .





GeographicalRegionNew Zealand

densityUrban area

Age20-40 years(Haskova,2015).




DemographicalGenderBoth

Life cycle 
Single
Young
Newly wed couples
Older married couple with children


OccupationsProfessionals, students
BehaviourPersonalityEasy going people

BenefitEnjoying coffee in relaxed environment
PsychographicSocialMiddle, upper middle and upper class

Lifestyle
Ambitious
explorer


3.2 Targeting

Once the segmentation is decided, Statbucks should choose specific target market to whom company would like to serve with value for money products and service(Reed, 2003, pp 112). . There are several objectives to target customers . According to the potential of growth , profitability of the particular segment , the similarity of the need between the customers etc . The company here knows the trick to accrue these customers well.

Starbucks must choose target market based on following criteria

Similarity- Target market should have simialr charactorstics hence middle class young students will be chosen as target market (Reed, 2003, pp 144). 

Growth potential- New Zealand is becoming hub for international education. Students from all over world are coming from various countries to study in New Zealand. Hence, growth potential is really good.

Accessibility- Reaching to young students are easy for Starbucks as the company is known for its digital marketing campaign.

Responsiveness- The target market is very sensetive for price. Because, students are not so indepenedent to spend huge amount of money on coffee.

Intensity of compeititon- Competition is really high in coffee industry. However,  Starbucks has very strong brand image which will be benefecial factor for company to expand in Newzealand. Based on the research work that we got from the above we create buyer persona . The nature and the orientation of the customer commodity is studied here , for Starbucks it will be very easy as they are in the market for past 20 years .

Concentrated brand positioning has been decided. Young students from college and university will be targeted.

3.3 Positioning- 

Its efforts to to create and maintain unique position of brand in the mind of potential or existing customers. Positioning of the brand is the main objective here . In the basis of the Brand stability we determine its positioning in the current market(Reed, 2003, pp 145).  . The identity of Starbucks is not to mention is remarkable.  So by default they are globally at the front position . But in this country they are going backwards due to the pricing issue .

USP is must for starbucks. For new strategy, value for money USP will be communicated through all advertising and communication efforts. If the situation arises , like we are having two products of the same kind but one is pricing very high compared to the other , as in the case of Starbucks . We then adopt this strategy . The rule here is to fix the price of the highly priced product , same as the  competitor’s to give a tough fight .

3.4 Strategic positioning- 

Based on above analysis, Cost leadership strategies ahs been decided. According to this strategy, cost of products will be kept low.



Part 4:  Customer value creation mix, communication and delivery strategies

Marketing is a mixture of so many things . Like product- its quality , demand , pricing . Place – retail ,wholesale , online shopping. People – orientation , management etc. Which will help Starbucks to sustain in the long run (Reed,2003,pp159). Here, to penetrate market of newzealand, following marketing mix is proposed. Starbucks follows it strategy for communication which basically comprise of publicity through marketing and various other advertising elements. They promote the goods and services using methods of media promotion, providing launching offers and other sales revenue generation ideas such as sponsorships, using public relations and expenditure Management. All these activities are required to understand the customers directly and attract them towards the product and service of the organization. It also allows the company to have a strong hold in the market and maintain this space through long-term Strategies and other short term strategies as well. They have predefined Vision and Mission statements.

4.1 Customer value creation

Product- 

Starbucks requires providing world class quality and services towards customers in terms of serving coffee and other food items(Geereddy, 2013).. The manufacturing and operations of the company must be improved in such a manner that there are no malfunctions. The storage of production services has to be regularly maintained with no product being expired and used beyond its consumption date. All the Machines in the store should be working smoothly in good condition and the staff should be aware of using this equipment’s. The quality of the product should never be compromised.

Different people follow different cultures worldwide. If Starbucks is operating in NewZealand, it must try to adopt the culture of the people and the inhabitants with respect to their food and drink habits. The customers will be more attracted towards Starbucks if they start offering customized food items and drinks to the consumers in a particular area and country.

Price- 

Happy customers will bring in revenue for the organization. The loyalty of the customers can be gained by providing High Quality Services and also encourage new customers try the products of the company. Hence, company should adopt low pricing strategy for penetrate market deeper in student segment.

Promotions- 

Offering discount and offers to the customers buy Starbucks so that the customers keep coming back again and again with those discount coupons to buy new products. The company can also give promotional offers to new customers and special offers for the loyal customers such as a reward points and gold cards. the new advanced technology has to be adopted by Starbucks in order to serve their customers and provide then after sale services as well with the help of Internet(Lingley, 2009)..  The franchises of the company should be equipped with high speed internet for the customer who has come in to have a cup of coffee in the store. 

Place- 

if the company wants to expand in NewZealand Market, it must think about expanding in other areas where there are less franchises or no stores of Starbucks. They can also increase the variety of products being offered to the customers. For example, there are many people who prefer drinking tea or coffee, and they would resist going to Starbucks thinking that it only offers coffee drinks. Therefore, if Tea items are also used in the stores, the teaholics I will also like to visit Starbucks for a new experience. People keep on asking for more stores of Starbucks globally, where the investment needs to be channelized effectively.

The company can also play coffee machines in airport lounges, stations, and other locations so that the customer gets a taste of their product. Online purchasing mechanism should also be encourage

4.2 Communication strategy

Short term and medium term objectives and strategies

Advertising through electronic and print media

Offering launch discounts and attractive offers on the product which is being newly introduced into the market buy Starbucks

Creating awareness among the customers through publicity of the brand 

Utilizing media channels such as publications and newspapers to write about the new products and services of the company(Fitzgerald, 2013).

Long term strategies

Promoting sales of Starbucks by offering gold card to the customers who have shown loyalty organization

Encouraging social sponsorship by engaging into activities of contribution towards charity, recycling of products, reducing wastage of raw materials, and sustainable use of resources.

Maintaining public relation with the customers directly and indirectly through extensive customer relationship management and promotional activities

4.3 Action Plan

Marketing strategy- Expanding market share by providing value for money coffee beverages and snacks.

Action TypeDetailsFreequencyMetricTimeMedium
AdvertisementsIt will communicate about value for money productsTwice in weekCustomer awarenessWeekends/eveningTV, Print and Radio
LeafletsIt will communicate about value for money productsEvery dayCustomer awarenessCollege timingPrint
Discount coupnsIt will communicate about value for money productsweekendsPromotionsIn Shopping malls, Cinema halls etcPrint
Social mediaIt will communicate about value for money productseverudayCustomer engagementTwitter, facebook and instagramDigital
EventsIt will communicate about value for money productsOnce in monthCustomer engagementCollege campus, Trade fairSocial gatherings
Green MarketingBuilding trust about brandOnce in weekCustomer TrustEncouraging customers to use recycle cupsStarbucks Cafe


4.4 Resource allocations

ActivityTotal Funds1st week2nd week3rd week4th week
Advertisements$20000$5000$5000$5000$5000
Leaflets$8000$2000$2000$2000$2000
Discount coupns$4000$1000$1000$1000$1000
Social media$2000$500$500$500$500
Events$4000$1000$1000$1000$1000
Green Marketing$2000$500$500$500$500


Part 5- Outline your recommendation for system / tools to monitor and evaluate performance

5.1 Tools to monitor

Sales

Evaluation of marketing campaign is done based on increase in sales. If there is increment in sales, it will be reflection of successful marketing strategy.

Return of Capital :-

  In any business , whether It is small or big like Starbucks , the foremost thing that comes in mind of any business owner is that the amount that he/she initiated , should come in its place first .

Reactions as well as response of the customer-base :-

 Response of the customers is very much need in the marketing of Starbucks . Mailing questionnaire or online surveys are two of the most popular  ways to know that , what exactly the Customers of Starbucks think about its marketing strategy . This gives the company a clear outline about is current strategy as well as it gives them an opportunity to come up with a plan for the near future .

Response of Marketing Partner :-

Executives  often comes up with the feedback about the current marketing plan that Starbuck is adhering . This feedback revels the effectiveness of the strategy and gives the company a heads up .   

5.2 Suggestion 

  • Collecting feedback from customers physically and over the internet through social media(Larson, 2008).
  • Promoting usage of Eco Friendly apartments and green stores
  • Contributing towards Global cause and charity
  • Following fair trade policies
  • Sponsoring of events and other CSR
  • Asking customers for suggestions to improve quality
  • Adopting advanced technology in stores for customer usage like Wi-Fi etc.
  • Understanding the needs of the customers and decorating the store to target audiences of that particular region.

6.Conclusion

There is a lot of competition available in the markets in the present scenario and the organizations are striking hard towards improving their customer base and retaining their loyal customers with various strategies in all types of industries. Low pricing strategy is considered to be the good decision for customer who takes it consciously or unconsciously and shows his is behavior in a positive manner towards the products of the organization regularly. customer will always believe that the brand is offering the maximum amount of satisfaction, feature, and cost effectiveness in whatever products they are buying. Hence, it that all by introducing best Quality Services and making the customer try new products and inform them about the value they are receiving