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Starbuck's Marketing Analysis
The document provides an agenda and background information for analyzing how Starbucks can compete with rivals and sustain success in the future. It includes a SWOT analysis of Starbucks and rival Dunkin' Donuts, alternatives for Starbucks, and a 3-phase recommendation and implementation plan involving expansion of mobile stores, improving the customer experience and apps, and developing a Starbucks culture through marketing. The phases are estimated to cost $1.6 million over 3 years.
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Starbuck's Marketing Analysis
- 1. STARBUCKS Canon Consultants:WaiYin Chan Tik Fai Ling Angel On KeeWong 1
- 2. Agenda • Background • Issue • Brief Recommendation • SWOT Analysis • Rival Analysis • Alternatives • Recommendation • Implementation Plan • Finances • Conclusion 2
- 3. Starbucks Background •First Store in Seattle’s Pike Place Market 1971 1987 • Began selling bottled Frappuccino coffee drink through North American Coffee Partnership (Pepsi-Cola North America) • Starbucks came out with their first mail-order catalog, enabling mail-ordering of their coffee in all 50 states 1988 1998 • Acquireed Tazo, a tea company based in Portland, Oregon • Grew from 55 stores to 15,000 stores 1989 - 2013 3
- 4. ISSUE How doesStarbucks compete with the rival and sustain its success for future? 4
- 5. Brief Recommendation ExpansionDevelopment Improvement 5 Marketing
- 6. SWOT Analysis –Strength and Weakness Strength Weakness • Companies Value $6.9 billion • Largest coffeehouse chain in the world • Strong brand image with quality coffee • No. 19 in Forbes’ TheWorld’s Most Innovative Companies • Employee management • Consistently strong financial and operating performance • Lack of internal focus • Need more of a wide spread customer base • Product Pricing • Stores can become crowded at times • Increasing Number of competitors 6
- 7. SWOT Analysis –Opportunities and Threat 7 Opportunities Threat • Extend supplier range • Expansion to emerging economies • Increase product offerings • Expansion of retail operations • Co-branding with other food manufactures • Rising prices of coffee beans and dairy products • Trademark infringements • Increased competition from local cafes and specialization of other coffeehouse chains • Market Saturation
- 8.
- 9. Dunkin’ Donuts: Strengthand Weakness Strength Weakness • Strong Brand Name • High Percent of Change in Sales • Over 100 varieties of donuts • Popular for a number of bakery products like coffee, tea, and hot chocolate • Innovative ways to retain customer by issuing coupon and discount • Constant rift with the franchisee owners and numerous instance of suing them • High competition in this industry makes them hard to gain more market share. • Lack of Products Choice • Limited Geographic Presence • Weak Advertising Strategy 9
- 10. Market Share ComparisonBetween 2011 & 2013 10 2011 2013
- 11. Positioning Price 11 Quality
- 12. Alternatives Options 1 • Status Quo Option 2 • Refocused on the Price Strategy Option 3 • Store expansion to boost up the % of change Option 4 • Refocused on Customer Experience and Distribution Channel 12
- 13. Recommendation 13 StarbucksApps and Customer Experience Expansion: Starbucks Mobile Store Development: Starbucks Culture Improvement: 2014 2015 2016 Marketing: Promoted through different media 2017
- 14.
- 15. Target Audience •Most of the Starbucks are located in big cities / shopping mall • Middle to Upper Class • Business associates • Either single / married • Have a tendency for a greater amount of disposable income • College Student 15
- 16. YOU WANT MOREAUDIENCE!!! Starbucks Customers 16
- 17. Phase I: Expansionof Starbucks Mobile Stores • Bypass some of the flow from store to truck • Goal: Make it internationally • In major cities’ commercial district • Irregularly to do promotion in College • Tasting Event for New Product • Offer “Buy one get one free” 17 Phase I • Expansion Phase II • Improvement Phase III • Development Target: 3 trucks in every city in 2017
- 18. Phase I: Expansionof Starbucks Mobile Stores 18
- 19. Phase II: CustomerExperience • Training Program (Focused on Customer) • Train the employees to remember the loyal or frequent customers’ names and orders, have conversations with customers, etc. • Creating customer intimacy • Customers to feel special and welcome 19 Phase I • Expansion Phase II • Improvement Phase III • Development Make your customer experience warmer and friendlier
- 20. How to encouragethe employee? 20 • “Star of the Month” • Allow the consumer to pick the best employee of the month • Reward the “Star of the Month” with bonus • Monthly Bonus: $100-200 • Increase employee’s loyalty • Increase the willingness to serve better L o l a
- 21. Phase II –Starbucks Apps 21 Phase I • Expansion Phase II • Improvement Phase III • Development Source: Google Play Website 1. Make it more user friendly 2. Top Ten Favorite Drinks 3. Allow Customer to Buy Products on Apps 4. Creating personalized promotions • Combining the customers’ personal / non personal about them • The amounts and types of purchases they make or any benefits they receive through Starbucks Cards Programs. 5. Add More Categories • Examples: Drinks Menu, Food Menu, Nutrition Menu
- 22. PHASE III –Create Starbucks Culture •Enhance the Store Experience •Increase the loyalty • Uniformity of “Name on the Cup” •Make it become a culture of Starbucks 22 Phase I • Expansion Phase II • Improvement Phase III • Development:
- 23. PHASE III –Promote the Starbucks Culture 23 Music Video TV program • Big Bang Theory • Broken Girl Movie Embedded Advertisements Phase I • Expansion Phase II • Improvement Phase III • Development:
- 24.
- 25. • Starbucks Seemsto be unstable 25 Finance – Sales Forecast • Dunkin’ Donut is more stable Starbucks’s Sales Dunkin’ Donuts’ Sale Year Sales % of Change 2008 8624 2009 8141 -5.6 2010 8943 9.9 2011 9205 2.9 2012 10007 8.7 2013 10654 6.5 Year Sales % of Change 2008 5572 2009 5706 2.4 2010 5921 3.8 2011 6433 8.6 2012 6774 5.3 2013 7150 5.6
- 26. Finance - GrowthRate Growth rate of Starbucks: 3.975% Growth rate of Dunkin’ Donut: 5.14% We hope to: • Make the growth rate more stable • Increase the growth rate gradually catch up with the growth rate of Dunkin’ Donut 26
- 27. Finance – SalesForecast 27 2015 $11,201.62 2016 $11,777.38 2017 $12,382.74
- 28. Finance - PhaseI • Target 3 trucks in every city in 2017 • $60,000 to get a food truck on the ground • 13 cities • Operating Cost for 1 truck $50,000 • First try to operate 1 truck in each city • Total budgets to buy trucks in 2014 - 2015: $780,000 • Cost of operating trucks: $650,000 Source: http://www.forbes.com/sites/investopedia/2012/09/27/the-cost-of-starting-a-food-truck/ 28
- 29. Finance - PhaseII Spend 1100 hour for making an apps Hire Specialist: $150 / hour Approximated Cost: $165,000 Source: http://appmuse.com/appmusing/mobile-app-development-costs-revisited/ 29
- 30. Finance - PhaseIII Average cost of TV commercial for one quarter:$109,000 Average cost of TV commercial for one year:$436,000 Cost of Making a tier 1 commercial:$5,000 Assume 4 commercial per year Total cost of making commercial $20,000 Source: http://www.adweek.com/news/television/their-prime-broadcast-spot-costs-soar-132805 30
- 31. Conclusion Attract more people by increasing exposure if food trucks Enhance our application to increase data exchange with customer Increase loyalty by increase intimacy with customer Increase customer by more aggressive advertising 31
- 32.
- 33. Appendix A –Starbucks Mission Statement in 2013 Our Mission To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Our Vision Our Goals Coffee It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care and improving the lives of people who grow them. We care deeply about all of this; our work is never done. Partners We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respect and dignity. And we hold each other to that standard. Customers When we are fully engaged, we connect with, laugh with and uplift the lives of our customers – even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection. Stores When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity. Neighborhood Every store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business. We can be a force for positive action – bringing together our partners, customers and the community to contribute every day. Now we see that our responsibility – and our potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead. Shareholders Every store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business. We can be a force for positive action – bringing together our partners, customers and the community to contribute every day. Now we see that our responsibility – and our potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead. Environmental  Understanding of environmental issues and sharing information with our partners.  Developing innovative and flexible solutions to bring about change.  Striving to buy, sell and use environmentally friendly products.  Recognizing that financial responsibility is essential to our environmental future.  Instilling environmental responsibility as a corporate value.  Measuring and monitoring our progress for each project.  Encouraging all partners to share in our mission. 33 Source: Company Website
- 34. Appendix B –Starbucks Financial Performance (2007-2013) 34
- 35. Appendix C –Dunkin’ Donuts’ Financial Performance (2008-2013) 35
- 36. Appendix D –Majority of Starbucks Retail Sales Specialty Coffee Beverage 61% Whole-Bean Coffees Food 16% 15% Coffee-related products 8% Specialty Coffee Beverage Food Whole-Bean Coffees Coffee-related products 36 Source: Company Website