2. History
70’s
• 1971- Starbucks
opens first store
in Seattle’s Pike
Place Market.`
80’s
• 1982-Howard Schultz joins
Starbucks as director of
retail operations and
marketing.
• He was so fascinated to
have coffee culture in US
• Few years later he buys
the company, and starts
selling premium-priced
coffee.
• 1992- 140 stores in
Chicago and Northwest.
• Mid 2002- established
as a dominant player
in the US market.
• At present, Starbucks is
largest coffeehouse in
the world with nearly
20,000 stores in a 60
countries.
3. STARBUCKS VALUE PROPOSITON
To create an experience around the consumption of
coffee.
To create an uplifting experience in “ customer intimacy”
To create an ambience based on human spirit, sense of
community and the need for people to come together.
6. Product positioning
The company has positioned its as premium coffee store
High price and quality with great experience
Target audience of age between 24-44 years.
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8. Major issues
Declining the customer base.
Delivery time of coffee.
Competition
No centralized department of marketing; didn’t focus on
marketing strategy and promotion of its product.
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10. $ 40 million investment plan
As the case tells investing this amount increase the
amount of labor and increases the services.
BUT…
Investment in the amount of labor also increase the
expense of the company
Should be invested in the internal strategic marketing
that will concentrate on marketing research, and the
marketing group.
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11. Most of the revenue comes from customized and
handcrafted beverages so investment on automated
technology.
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12. Recommendation
Train the partners for better customer interactions and
speedy performance.
Place automated and customized coffee machines
within the star bucks outlets as well as in other convenient
locations.
Introduce Starbucks privilege cards to its customers.(free
cup of coffee after every X number of coffees).
Engage in charity activities and gain trust from the
society and customers
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13. Cntd….
Introduce some funky tastes of coffee within a low price
brackets to attract and retain young customers.
The company should re-evaluate its product positioning.
Concentrate new store openings that will not cannibalize
existing sales
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14. Major Takeaways
Focus on the experience
Pay attention to your Brand awareness
Don’t accept conventional price ceilings.
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