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Starbucks Case Analysis

1400 words - 6 pages

A. Current market situation (SWOT)
Strengths
* Successfully promoted Blonde Roast in Canada along with the “Name Your Blend” promotion (Maloney, 2013)
* Customers proven to be loyal to starbucks through Loyalty programs, with a majority of 63% saying they would return just for the rewards program (Horn, 2013)
* Digital storefront promotion for teas proved to be successful (Laird, 2011)
* Partnership with evergreen encourages Canadians to “go green” (Starbucks Encourages Canadians to Pledge to do some Green, 2010)
* Partnership with AT&T Inc. to include free and paid wireless internet coffee shops in the united states (Associated press, 2008)
* Partnership with ...view middle of the document...

(food), 2012)
* Plan global expansion in North America, 3000 new stores and renovating thousands more within the next 5 years (Starbucks plans global expansion and development, 2013)
* Plans to open over 1000 new locations within Europe within the next 5 years (Starbucks plots European Growth, 2012)
* Use of mobile and online loyalty schemes (Starbucks boost its focus on digital, 2012)

B. Market Segments
Target Market | Students | Young Adults |
Demographic | * Both males and females ages 18- 25 | * Young adults ages 25-35 |
Geographic | * Urban | * Urban |
Psychographic | * Middle and high class people * Expensive specialty coffee is not a necessity for students | * Middle and high class people * Young Adults with busy lives, coffee break during job |
Behavioral | * Students who stay up late to study and do assignments * Provides good atmosphere for the needs and lifestyle of students (24 hour locations, internet) | * Working adults who research or have computer based jobs * Provides good atmosphere for needs of working young adults (internet, and a quiet environment) |

C. Issue Analysis
1. Starbucks became commercialized and traded in quality for speed and service (Passikoff, 2008)
2. Starbucks needs to work on campaigning and promoting their company within the United Kingdom (Starbucks Corp. (food), 2012)
3. Overpriced coffees cause consumers to seek cheaper alternatives. (Bryson, 2009)
4. Fast food restaurants becoming a great threat moving into coffee market segment (Starbucks Corp. (food), 2012)

D. Recommended Alternatives
Starbucks should continue to market its products through behavioural targeting towards students. Currently Starbucks has locations at most universities and colleges, which allows students to purchase their products conveniently. Starbucks uses behavioural marketing to appeal to the student life style including staying up late to study, doing homework in a coffee shop, or simply purchasing a coffee before class. This behavioural marketing strategy also allows Starbucks to build a customer brand relationship, which not only causes revenue in the present, but also allows future revenue from repeat customers.

Product
* Starbucks ice cream served at their locations by the scoop or coffee popsicles
* Starbucks energy drinks served like expresso shots
* Start serving fresh fruits and berries as well as salads (maybe by the cup/ Fruit salads)
* Start selling Starbucks merchandise such as mugs, thermoses, coffee machines
* Start selling loafs of bread (home-made, quality, needs to worth buying over grocery store companies)
* Start selling wrist bands and key chains
Promotion
* Create a lottery type promotion similar to roll up the rim, maybe a scratcher on the side of every cup with various prizes available
* For a limited time give away a free latte during the morning (daily until 9 AM)
* For a...

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