Starbucks has experienced strong growth but now faces some challenges. It lacks a strategic marketing group and customer satisfaction is decreasing as competition increases. Recommendations include more advertising, product differentiation, variety and quality control. Building loyalty through rewards programs and expanding drive-through locations could also help. Starbucks should focus on cost efficiency, expanding selectively into new markets, and diversifying into health drinks and corporate sales to drive future growth.

1. STARBUCKS COFFEEPresented by:ChinmayaVashishthDebendra RoutDewalJindalKapilDagaKapilSinglaKaran SoodPranjalMehrotra

2. STARBUCKS COFFEEWe’re not in the coffee business serving people…We’re in the people business serving coffee.-Howard Behar, Director of Retail Operations

3. AgendaHistory and Business growth strategyProblem IdentificationStarbucks and Market researchSWOT analysisRecommendation Future prospect and conclusion

4. STARBUCKS: THE HISTORYThe original Starbucks store was started by ZeivSiegl, Jerry Baldwin and Gordon Bowker in 1971 It was opened as a store that sold whole beans and premium-priced coffee beverages Howard Schultz’s joined with Starbucks in 1982 and his idea was to create a chain of coffee houses with a product differentiation of specialty “live coffee”, service or customer intimacy with an “experience”, and an atmosphere of a “third place” to add to their work and home alternatives.The stores targeted selling their coffee primarily to affluent, well educated, white-collar patrons between the ages of 25 and 44.In 1992 Howard Schultz , after opening Starbucks 140 stores, took the company public and by the end of 2002 Starbucks had opened more than 5000 stores across the globe.

5. MARKET SHARE ACROSS USA

6. PRODUCT MIXThe company spent minimal dollars on advertising to promote a brand concept , still achieving phenomenal sales figuresThe majority of sales came from coffee based and other beverages and the rest from food items and whole bean coffee sales.Other- 15% Revenue SourceProduct Mix with % sales

7. SALES FIGURES

8. STARBUCKS: THE SUCCESS‘Live Coffee’ MantraHighest quality coffee offered Control the supply chain- Work with the growers, oversee the roasting and control the distributionContinuous product innovation

9. Where does the problem lie? Lacked a Strategic Marketing Group

10. Changing Perception

11. Unsatisfied Customers

12. Increasing CompetitionLacked a Strategic Marketing Group No Chief Marketing Officer

13. Marketing Department functioned as three different groups : Market Research Group

14. Category Group

15. Marketing GroupChanging Perception

16. Dissatisfied CustomersStarbucks was not meeting expectations in terms of Customer Satisfaction and there was a direct link between Satisfaction and Customer LoyaltyIncreasing Competition Though Starbucks is still a dominating chain but its hold on coffee has loosened.

17. Facing Competition not from newcomers but from older coffee chains that have increasing customer loyalty.

18. Another threat are the established food chains that have altered their focus to incorporate the rising trend of coffee.Increasing CompetitionDunkin Donuts: Complementary pairing of Coffee & Donuts.2. Peet’s Coffee & Tea: Focus on Quality Coffee & Strategic Positioning of Stores nearby to Starbucks locations.3. Caribou Coffee: Differentiate themselves on the basis of Store Environment.

19. Marketing Concepts Visited Market Research/Survey

20. Importance of Findings  Action  Impact

21. Customer Values

22. What as an organization we are doing for customers?

23. Customer Satisfaction/Loyalty

24. What does the customer perceive of our values and to what extent he/she is thrilled about it?TargetConsumerHow aligned is your brand?TargetNeedsTargetValueTargetMessageAligning the Marketing Value ChainWho are they?Psychographically

25. Demographically

26. GeographicallyWhat are their current needs?Personal needs and usage occasionsTactics, mix, media, spendWhy Buy (Brand)? (Essence of the brand)Product line 1

27. Product line 2…How do we communicate the “why”?For the brand?

28. By product line? 16

29. STARBUCKS and Market ResearchStrong Proactive culture @ STARBUCKS