Starbucks Essay

1060 words - 5 pages

Starbucks

1. What factors accounted for the extraordinary success of Starbucks in the early 1990s?

* Established successful brand image through cultivation of new coffee culture with “experience marketing” (keeping coffee culture alive)
* Established Starbucks as the dominant specialty-coffee brand
* With rapid growth

* Three components to experiential brand strategy
* Coffee itself High-quality coffee : to do that control supply chain
* (i.e.) Directly work with coffee growers to purchase good coffee bean / oversee the roasting process / control distribution channel to the retail stores around world.
* Service referred to as “customer ...view middle of the document...

How does the Starbucks of 2002 differ from the Starbucks of 1992? How do the customers that love Starbucks in 2002 differ from those who loved Starbucks in 1992?
* Customers
* Customer base changed : Established customers + Newer customers Customers are more complicated and hard to target
* Company
* Faster growing : 40% of annual compound sales growth rate
* Established Starbucks as the dominant specialty-coffee brand
* Competitors
* Competed against a variety of small-scale specialty coffee chains (regionally concentrated)
* Ex) Minneapolis-based Caribou Coffee, California-based Peet’s Coffee & Tea
* Competed against thousands of independent specialty coffee shops
* Competed against donut and bagel chain (Ex) Dunkin Donuts
* Starbucks has got into between low and high price coffee market
Dunkin | Starbucks | Small-scale & independent shop |
<target customers>-lower income-younger-no loyalty | | <target customers>-high income-white collar-higher loyalty |
Low priceLow quality | | High priceHigh quality |

* Collaborators
* More collaboration
(Ex) Joint venture with Pepsi-Cola to distribute bottled Frappuccino beverage
Partnership with Dreyer’s Grand Ice Cream to distribute premium ice cream
<Distribution Channel>
Company-owned Stores | -Accounted for 85% of net sales |
Non-company-operated Retails(“Specialty Operations”) | -Accounted for 15% of net sales-27% of revenue from sales of food-service-18% of revenue from sales of domestic…… |

<Product Mix> (Exhibit 4-5)
* Pastries, sodas, juices, coffee-related accessories and equipment, music CDs, games, salads and sandwiches etc.
* Beverage sales accounted for 77%

4. Describe the ideal customer from profitability standpoint. What would it take to ensure that this customer is highly satisfied? How valuable is a highly satisfied customer to Starbucks?
* Ideal customers from profitability standpoint.
* It is not necessarily the established customers
* Customers who visit more than 8 times a month
consisted of 21% of total Starbucks customer base and 62% of all Starbucks transaction
* How to ensure this customer highly satisfied?
* Ranking of key attributes in creating customer satisfaction
* Clean stores(83%), Convenience(77%), Friendly staff(73%), Coffee taste(72%), Coffee quality(67%), Fast service(65%), Appropriate Price(65%)……..
* For “true friend”, provide privileged environment and service
* For “butterflies”(Drive-thru & Take-outer), provide fast service and discount
* How valuable is a highly satisfied customer?
* (Figure A, p11)
* 21% of highly frequent customers bring 62% of its...

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