Final%20 Starbucks%20 Powerpoint%201[1]


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International Business 465 final project powerpoint on opening a business/company in another country

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Final%20 Starbucks%20 Powerpoint%201[1]

  1. 1. Nick Evers Mike Mydlach Zach Voigtschild Starbucks International Marketing Plan: South Africa
  2. 2. Starbucks Profile <ul><ul><li>Founded in 1971 in Seattle’s Pike Place Market </li></ul></ul><ul><ul><li>Named after first mate in Moby Dick </li></ul></ul><ul><ul><li>Highest quality Arabica beans from coffee growing regions of Latin America, Africa/Arabia and Asia/Pacific </li></ul></ul><ul><ul><li>Started grocery sales in 1996 in Portland, OR </li></ul></ul><ul><ul><li>Also 1 st opened overseas store in 96’ in Japan </li></ul></ul><ul><ul><ul><ul><ul><li>Now currently more than 700 stores in Japan </li></ul></ul></ul></ul></ul><ul><ul><li>More than 15,700 stores in 43 countries </li></ul></ul>
  3. 3. Starbucks Company Vision <ul><li>Objective : To become the most recognized and respected brand in the world. </li></ul><ul><li>Offer simple service and comfort to the coffee experience. </li></ul><ul><ul><li>“ You get more than the finest coffee when you visit a Starbucks—you get great people, first-rate music and a comfortable and upbeat meeting place,” says Howard Schultz, Starbucks chairman, president and chief executive officer. </li></ul></ul><ul><ul><li> </li></ul></ul>
  4. 4. Products Offered <ul><li>Offers more than </li></ul><ul><ul><li>-30 roasted high-quality blends and single-origin coffees </li></ul></ul><ul><ul><li>-Espresso/Frappuccino Beverages </li></ul></ul><ul><ul><li>- SOME Markets =Baked Pastries/sandwiches/Salads </li></ul></ul><ul><li>Starbucks also </li></ul><ul><ul><li>-Sells whole bean coffee as well as accessories/equipment via retail stores </li></ul></ul><ul><ul><li>-owner of their subsidiary, Tazo Tea Company </li></ul></ul>
  5. 5. South African Demographics <ul><li>47,900,000 pop. </li></ul><ul><li>9 Provinces , 11 official languages </li></ul><ul><ul><li>English remains the main medium of instruction in schools and universities </li></ul></ul><ul><li>Ethnic Breakdown </li></ul><ul><li>79.5% Black 9.2% White 8.9% Coloured 2.5% Asian </li></ul><ul><li>Racial tension and inequality still exists with the end of apartheid in 1994 </li></ul>
  6. 6. Economy <ul><li>Currency: 1 South African Rand = .1143 USD </li></ul><ul><ul><li>The South African rand (ZAR), is the most actively traded emerging market currency in the world. It has joined an elite club of fifteen currencies </li></ul></ul><ul><li>GDP is ranked 25 th in the World </li></ul><ul><ul><li>GDP based on purchasing-power-parity (PPP) valuation of country GDP= $492.684 Billion USD </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>JSE Limited ( stock Exchange) </li></ul><ul><li>Modern infrastructures supporting major urban centers </li></ul><ul><ul><li>Cape Town, Port Elizabeth, Durban, and Pretoria/Johannesburg </li></ul></ul>
  7. 7. Environmental Analysis <ul><li>Traditions/Customs </li></ul><ul><ul><ul><li>Only family members and close friends address each other by their first names </li></ul></ul></ul><ul><ul><ul><li>Like America, it’s important to use professional titles </li></ul></ul></ul><ul><ul><ul><li>Still remains as a male-dominated society </li></ul></ul></ul><ul><ul><ul><ul><li>Women often referred to as girls </li></ul></ul></ul></ul><ul><li>Business Customs </li></ul><ul><ul><ul><li>Punctuality is viewed as vital </li></ul></ul></ul><ul><ul><ul><li>White South Africans typically are more to the point than South Africans of other races </li></ul></ul></ul><ul><ul><ul><li>High pressure and strong emotions have little place in dealing with most South African businesspeople </li></ul></ul></ul>
  8. 8. Growing South African Coffee Market <ul><li>Market is ripe for a global coffee company </li></ul><ul><li>South Africans insist on sitting down and enjoying their coffee </li></ul><ul><ul><li>Overseas domed lids are popular however not in South Africa. </li></ul></ul><ul><ul><li>“ tea break” was worked into the weekday </li></ul></ul><ul><li>“ It’s a take a break culture, mainly in office or industrial parks there seems to be a tendency for them to look for an attractive environment to drink coffee” -Roman Cylkowski: Blitzforce Marketing-Johannesburg </li></ul><ul><li> </li></ul>
  9. 9. Existing Competition <ul><li>Novelty Coffee Shops </li></ul><ul><ul><li>Seattle, Vida e Café, Dulce Café </li></ul></ul><ul><ul><ul><li>None are truly a global brand </li></ul></ul></ul><ul><ul><ul><li>(R8) for a typical cup of coffee = $1 USD </li></ul></ul></ul><ul><ul><ul><li>(R15) for a latte = $2 USD </li></ul></ul></ul><ul><li>Restaurants Offering instant coffee </li></ul><ul><ul><li>i.e McDonald’s </li></ul></ul><ul><li>Instant Coffee Producers in Grocery Stores </li></ul><ul><ul><li>Folgers, Maxwell House </li></ul></ul>
  10. 10. Key Competition <ul><li>Seattle Coffee Company </li></ul><ul><ul><li>25 Current stores </li></ul></ul><ul><ul><li>Offer coffee and WIFI similar to Starbuck’s </li></ul></ul><ul><ul><li>“ We introduced this type of coffee culture to South Africa in 1997, before anyone had heard of lattes or skinny mochas” Sandy Barlow </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>In the first eight months of Wi-Fi connection, Seattle Coffee Company has logged 2,735 sessions with customers going online from its ‘comfy bars’ for a total of 190,000 minutes. The popularity of the service is also gaining momentum with a growth rate of 25 per cent month on month. </li></ul><ul><li> </li></ul>
  11. 11. Key Competition Cont. <ul><li>Vida e Café </li></ul><ul><ul><li>Portuguese-themed company serving coffee, cappuccino, espresso, gelado, and muffins </li></ul></ul><ul><ul><li>19 current stores within 5 years </li></ul></ul><ul><ul><li>Bright colors and loud music atmosphere geared toward a trendier crowd </li></ul></ul><ul><ul><li>Partnered up with like minded brands </li></ul></ul><ul><ul><ul><li>Levis, Converse, Virgin, BMW Mini </li></ul></ul></ul><ul><ul><ul><li>Use local popular personalities to advertise product (A1 Driver, Pro Wake Boarder) </li></ul></ul></ul>
  12. 12. Market Entry Method <ul><li>FRANCHISING </li></ul><ul><ul><li>Already has a strong channel, passing process down is easy </li></ul></ul><ul><ul><li>Capitalize on market share in another country without spending a large amount on investment </li></ul></ul><ul><ul><li>Political risks for the right owner are very limited which would ease pressure to begin business </li></ul></ul>
  13. 13. Target Market/Customer <ul><li>Plan to target men and women 18-35 </li></ul><ul><ul><li>Students/business men & women looking for the weekday coffee break </li></ul></ul><ul><li>Starting w/ a sprinkler effect in major cities </li></ul><ul><ul><li>1. Johannesburg </li></ul></ul><ul><ul><li>2. Durban </li></ul></ul><ul><ul><li>3. Cape Town </li></ul></ul><ul><ul><li>4. East Rand </li></ul></ul><ul><ul><li>5. Pretoria </li></ul></ul><ul><ul><li>6. Port Elizabeth </li></ul></ul>
  14. 14. SWOT Analysis <ul><li>I. Strengths </li></ul><ul><ul><li>Its brand name </li></ul></ul><ul><ul><li>Anticipation of Starbucks </li></ul></ul><ul><ul><li>Experience in franchising internationally </li></ul></ul><ul><ul><li>Untouched by a global company </li></ul></ul><ul><ul><li>II. Weaknesses </li></ul></ul><ul><ul><li>Overexpansion </li></ul></ul><ul><ul><li>Some South African’s are only content with the tastes they’ve been brought up on </li></ul></ul>
  15. 15. SWOT cont. <ul><li>III. Opportunities </li></ul><ul><ul><li>Market is growing and untouched as far as global coffee companies are concerned </li></ul></ul><ul><ul><li>Cheaper Brands have grasp of the lower class customers, leaving the middle to upper class customers wide open for Starbucks to hit </li></ul></ul><ul><li>IV. Threats </li></ul><ul><ul><li>Current state of the downward economy </li></ul></ul><ul><ul><ul><ul><li>Downward economy will force many consumers to think about a cheaper alternative </li></ul></ul></ul></ul>
  16. 16. Objectives <ul><li>1-Increase product awareness among the target audience by 30% in our first year </li></ul><ul><ul><li>Advertising in newspapers, magazines, billboards, mass transit systems, and the Web </li></ul></ul><ul><ul><li>High volume areas like malls and business districts must be targeted </li></ul></ul><ul><ul><li>Even secondary schools and universities </li></ul></ul><ul><ul><li>WORLD CUP 2010 advertising </li></ul></ul>
  17. 17. <ul><li>2- We would like to open our first location in Johannesburg producing $520,000 or 4.635 million Rand. </li></ul><ul><ul><li>Pricing our products just above Seattle and Vida at 8 Rands a cup while proving our competitive advantage over them using a price skimming strategy </li></ul></ul><ul><ul><li>Using the Johannesburg Star to advertise </li></ul></ul><ul><ul><ul><li>As well as mass transit, grocery stores, universities, business districts </li></ul></ul></ul>
  18. 18. <ul><li>3- Gradually open 5-10 main locations into the country’s major urban areas if Johannesburg seems to be a success. </li></ul><ul><ul><li>Trial and Error with products </li></ul></ul><ul><ul><ul><li>Gradually introduce the people to our other products such as breakfast foods, salads, drive thru </li></ul></ul></ul><ul><ul><ul><li>Don’t push products upon people, adapt to their wants </li></ul></ul></ul><ul><ul><li>Obtain a strong customer base and loyalty before expanding operations </li></ul></ul>
  19. 19. Promotional Plans <ul><li>¼ page ad weeks in advance informing people of grand opening as well as offering a buy 1 get 1 coupon </li></ul><ul><li>Product tasting at universities and shopping districts </li></ul><ul><li>After paper advertisement and commercials are embedded we won’t need to rely on coupons and we can use more of our budget on: </li></ul><ul><ul><li>Billboards </li></ul></ul><ul><ul><li>Magazine ads </li></ul></ul><ul><ul><li>Perhaps hiring local celebrities </li></ul></ul>
  20. 20. Marketing Plan Budget <ul><li>Percent of Sales Method </li></ul><ul><ul><li>Johannesburg projected to earn $520,000 USD or 4.635 million Rand </li></ul></ul><ul><li>15 % of sales will be used for marketing/advertising </li></ul><ul><ul><li>2 nd year of business would budget for 700,000 Rand on advertising </li></ul></ul><ul><li>¼ page ad in the Star costs 2400 Rand/day @ 5 months would cost 360,000 Rand </li></ul>
  21. 21. Conclusion <ul><li>There’s a need for a global coffee company in South Africa </li></ul><ul><li>The people embrace the sit down culture that Starbuck’s offers </li></ul><ul><li>Starbuck’s powerful global name will help entry into South Africa as well as strength in support of distribution and marketing </li></ul>
  22. 22. Sources <ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul>