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Marketing is human activity directed at satisffying needs and wants through exchange processes. Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
EXECUTIVE SUMMARY STARBUCKS COMPANY Starbucks Company Starbucks company is an American coffee company and coffeehouse chain Starbucks was founded in Seattle, Washington in 1971 The headquarters in 2401 Utah Avenue South, Seattle, Washington, U.S As of 2018, Starbucks is present on continents and in 75 countries and territories, with a total of 27,339 locations Starbucks open its first coffee store in Seattle in the early 1980s Starbucks locations serve hot and cold drinks, whole-bean coffee, microground instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea products and so on On December 1, 2016, Howard Schultz resign as CEO and would be replaced by Kevin Johnson Howard Schultz retired to become Chairman Emeritus 47 ACHIEVEMENTS Starbucks welcomes 33 million coffee lovers weekly at more than 9,000 stores all over the world to provide its customer with an excellent experience Here are some of recent achievements Starbucks company: - One of the “Most Admired Companies in America” Fortune – 2003–2015 - One of the “World’s Most Ethical Companies” Ethisphere – 2007-2015 - One of the “Best Workplaces in Canada” Great Place to Work Institute – 2011-2014 - One of the “World’s 50 Most Innovative Companies” Fast Company – 2012 - One of the “World’s Most Valuable Brands” Forbes – 2013-2017 - 100% Rating on the Corporate Equality Index Human Rights Campaign Foundation – 2015-2017 - One of the “World’s Most Ethical Companies” Ethisphere – 2007-2017 PURPOSE OF THE REPORT The Vietnamese coffee market is very vibrant with the participation of dozens of famous and popular coffee brands, as well as hundreds of other nonbranded coffee products 47 In order to maximize profits and take advantage of the ease of use in the country, most coffee products in Vietnam not hesitate to mix impurities, chemicals, flavors, colorants, preservative management in coffee All these "indispensable ingredients" form a unique "Vietnamese" coffee range with a range of hazards not limited to the health of consumers So that, Starbuck company launched new products, that is tea coffee Tea coffee is a unique combination of coffee beans, rose tea and sweet grass The unique aroma of Tea coffee will definitely make you happy like a cup of light coffee, or even better Tea coffee will help your brain to wake up to a full-blown morning And finally, the aim of this report is get the setting that are important to achieve the goals of the company in the market and to increase the rate of sales in the markets by producing and making several changes in policies and strategies to grow new product andincreasing number of customers that can get attracted towards new products This product is expected to be launched in Vietnamese coffee market before expanding service worldwide This section outlines a specific and comprehensive strategy base on some following factors: - Value for customers - Target markets - Positioning - Product strategy - Pricing strategy - Distrybution strategy 47 - Marketing communications strategy and marketing organization Table of Contents CURRENT MARKETING SITUATION Market Discription Product A Review Of Competition A Review Of Distribution 12 THREATS AND OPPORTUNITIES ANALYSIS 15 OBJECTIVES AND ISSUES 18 MARKETING STRATEGY 20 ACTION PROGRAMS 36 BUDGETS 38 CONTROLS 40 CONCLUSION 46 47 REFERENCES 47 CURRENT MARKETING SITUATION Currently Starbucks position is as the leading coffee organization depends highly around the globe expansion policy Expansion of Starbucks around the globe is still in the early stages and Starbucks has the great opportunity for future growth Starbucks main objective was to launch itself as the most renowned and respected brand in the world The company main objective was to the expansion of its branches all over the world, to broad its retail business, develop new techniques, product and introduce new distribution channels in order to achieve its goals MARKET DISCRIPTION Starbucks target market was 18 years to 24 years young professional because they are not yet been loyal with coffee industry Starbucks strategy comprises to locate its stores at picky places such as the first floor of blocks of offices, underground main entrance and urban areas Starbucks sales totally depends on company operate retail stores and certified retail operations, Starbucks sells coffee and tea products through many others channels like distribution targeting restaurants, hotels, colleges and universities and other work places Beside that, with large companies, the demand of customers is also great So, Starbucks always responds to this demand by improving stores, new products, employees and more about everything suitable for a great quality Starbucks are also interest to many other factors such as: Atmosphere, Quality Coffee, Customer Service, and Partner Satisfaction Starbucks sought to be a place where people could lounge with a good drink and friends or maybe just a book This atmosphere was created to establish a friendly and welcoming environment 47 Every time you walk into a Starbucks, you know you will be greeted with a smile and a friendly attitude The training of the staff, in both how to be personable with customers and knowledge of the product offering provide will a superior experience for you and Starbucks, that's also a part important for company turnover And another factor that also affects the Starbucks company is the environment The following are the most typical factors in the new product including: Political, Economic, and Environmental • Impacts of Political Factors on Starbucks The main political factor is about sourcing the raw materials, the company wants to adhere to social and environmental norms It is difficult to find the quality of raw materials This is gives importance to fair trade practices • Impacts of Economic Factors on Starbucks Some other economic factors which can affect Starbucks are: - Local currency exchange rates - Local economic environment in different markets - Taxation level • Impacts of Environmental factors on Starbucks are: - Environmental rules and regulations - Environmental disasters and in other store produce coffee - Starbucks must ensure does not violate any laws and regulations in the vietnamese coffee market - The competition of other famous brands PRODUCT Starbucks has a big menu like beverages, bakery food, fruit & snack plates, breakfast and Nutrition but the major product is brewed coffee With more and more drinks and food products being launched, Starbucks products are increasingly available to meet the needs of our customers And as of May 2018 Starbucks reports better-than-expected revenue: The coffee chain estimates revenues to reach $ 100 million, with total revenue of $ billion and forecasts that the stock will reach a trading range of $ 0.53 per share 47 The following are some illustrated products and revenue charts in 2018 and in the future of the starbucks company Coffee Americano Coffee Latte Coffee Mocha Caramel Latte ( 70.000 đ) ( 75.000 đ ) ( 80.000 đ ) ( 80.000 đ ) Cappuccino ( 60.000 đ ) ( 65.000 đ ) Chocolate Roll Caramel Macchiato ( 65.000 đ ) Fruity Cinnamon Roll Nutella Marble ( 50.000 đ ) ( 55.000 đ ) Earl Grey Chamomile Blend ( 30.000 đ ) ( 35.000 đ ) ( 50.000 đ ) Speermint Green ( 35.000 đ ) Asian Dolce Latte ( 60.000 đ ) Slice Coconut Mango ( 50.000 đ ) English Breakfast ( 20.000 đ ) 47 Hazelnut Latte 47 A REVIEW OF COMPETITION Starbuck vs Trung Nguyen Coffee Starbucks Corporation has been the most successful coffee chain in the past few decades using their aggressive expansion strategies to push out much of its competition They are currently leading the retail coffee market with selling their coffee for a premium price to increase their profitability One of Starbucks major competitors in this ad campaign was Trung Nguyen Coffee In Viet Nam, Starbucks coffee is a stand-out brand,new trend to catch,but quite luxury,very confined class to enjoy… + Teenagers : prove and feel proud of themselves + Young aldult : widen knowledge, experience and evaluate international brand + Foreigners : look for local home tastes and enviroment In Viet Nam, Trung Nguyen coffee is popular, trust worthy, suitable for most classes… *TRUNG NGUYEN* - The first Vietnamese franchise of coffe houses, built a franchise network of more than 10,00o cafés in the country - Wide distribution channels Have coffee shops inside famous buildings and malls which have large amount of employees and people - High potential to improve in world's market Easy to penetrate Asia coffee's market Expand brand - Good quality products such as Creative Coffee no 1, 2, 3, 4, 5, Legendee, Passiona and Weasel - Captured and successfully launched a series of consistent youthful style - Apply price discrimination 47 - Cannot control all the partners - Missing a top leader in the field of creative and innovative style to keep the system consistent - Focus too much on wide development of the brand and forget to develop image and style, design furniture, etc =>Lose unique advantages that have helped them leveled up - Remains on the list of leading coffee companies in Vietnam - Become the International brand Trung Nguyen also has many opportunities and advantages among foreign comers to attract capital and better cooperation with Asian countries - Create and improve images of stores Improve franchises in Asia - Confusion of policy and strategy as well as management - Lost market share, loss of orientation and confusion of policy and strategy as well as management - Improve quality and create new flavors - After a few years being used to Vietnam market, foreign comers will be more powerful - Sponsor for variety show ( Dancing celebrities, Inside VN, Giving strength to exam seasons Tiep suc mua thi ) • Broadcast weekly on TVs • Promote products • Brand recognition - Capture the tastes of consumer, produce the product aims to please the average taste of undifferentiated audience - Upgrade positions - become the 3rd home ( besides consumers' house and company) to help customers feel themselves at home, relaxed and comfortable 47 Trung Nguyen saw a growth rate of 50 per cent last year They will restructure their sales and increase new products Trung Nguyen aims to develop Buon Ma Thuot city as a ‘Kingdom of Coffee' they aim to dominate the domestic market and improve market share as well as increase coffee consumption in Viet Nam 47 and services Starbucks is giving training to its employees in order to manage cultural diversity At the international level company is emphases on brand marketing MARKETING COMMUNICATIONS STRATEGY AND MARKETING ORGANIZATION Buiding the relationships with customers is very important It determines the success of a brand To create an impression for customers, a new product not only needs a good form and good quality, but also must come with good service and most importantly customer sympathy Accepting the use of free wifi is one of them We can also promote our products by offering small gifts to our customers the same as a keychain which have a featured imagery of starbucks brand and the product (tea coffee) The service timing has to be quick and effective that can deliver customer delight We strive to be accessible; therefore, customer service has to be top priority We aim to maintain the good working relationship we have with Target Corporation By assuring that shipments arrive on time and making sure shelves are stocked at all times with Starbucks products, our customers can always find what they’re looking for Keeping the establishment of a quality working relationship is always an ongoing process We here at Starbucks Corporation plan to continue honoring these working relationships to provide a quality product to our customers The suppliers of Starbucks are provides of coffee bean and it uses quality of beans to make its products The major suppliers of the company are Africa, Latin America, and Asia and all have significant influence on its operation There is risk for company if suppliers fail to deliver goods at time In this way it can be said that the bargaining powers for the company is very high The political factor of different countries in which Starbucks operates business such as taxation & social welfare policies, Government stability and trade regulation have a high influence on its operations The company has to consider all political influences in different countries and has to maintain good relations with countries that produce coffee beans The organization has to monitor all the factors such as inflation & interest rate, unemployment and the supply of money in the country All these may affect customer consumption capacity Buying power of consumers also affects the business of Starbucks 47 The various factors like demographic profiles, lifestyles, cultural values, income distribution influence the Starbucks coffee business Nowadays, customers are going towards healthy food; this is an opportunity for company to get success in different markets.In coffee house industry, technology refers to development of new and healthy products Technological factor which affects business of Starbucks are such as emergence of innovative technology in the industry, biotechnological developments and developments in agriculture industry The customers are becoming more environmental friendly The company is considering environmental factors such as waste disposal systems and energy consumption At all stores and out of the stores Starbucks keeps dustbin to reduce the wastage in company 47 As Starbucks is operating in many countries so it has to take care of laws regarding production capacity, minimum wages, product design & safety, pricing and promotion The company is also facing the problem of duplication of products as in the industry many rival companies are and offering duplicate products ACTION PROGRAM Howard Schultz is the chairman, president and chief executive of Starbucks He is in charge of everything that happens within the company Shultz oversees everything that goes on in Starbucks including the marketing, operations, financing, creating company culture, and human resources, to say a few Schultz was a manager at another coffee shop before he had an idea that led him to break away from his current job and create the international growing restaurant known as Starbucks One of Schultz’s accomplishments that he has done for Starbucks was to turn it into a café Before Schultz, Starbucks sold only the beans and items that people would need in order to create their own coffee The whole business changed when Schultz bought it out Sales have increased at an astounding rate since Schultz bought the company Starbucks is adding a new drink to its official menu Next season, Starbucks customers will be able to order the new drink,called Tea Coffee A tall version of one of Starbucks new drinks will retail between $3,5-$4 This winter, Starbucks will introduce the new drink, the first espresso beverage recipe to use tea The Tea Coffee will be introduced in July, the following are summaries of the action programs we will use to achieve our stated objectives In September, we plan to run a TV ad featuring the tea coffee flavor We have estimated that our fixed costs will be $500,000 We recognize that this may be a lower number than reality would likely show That $500,000 would include a budgeted $100,000 for marketing and promotional concerns October is projected to be a good month for us We will be continuing the fall TV ad as well as placing ads in Target’s print ads We will also be doing a lot of advertising and PR via social media outlets With an increased awareness of our new product, as well as a high demand for fall flavor offerings, we expect to sell an estimated 770,000 cups, up from 640,000 in the previous month 47 In November, We will also add a new push in advertising for the summer theme flavor However, we recognize that this is no longer a brand new product to the market, and after the initial buzz period, there may be dip in sales before things start to level out With these things in mind and because of the combined sales of the remaining tea coffee flavors, as well as the new boost in sales from the tea coffee offering, we expect sales to reach 730,000 cups We expect a slight increase in sales during the December month The demand will increase as Christmas approaches and consumers will be flocking to purchase the tea coffee flavor specifically The cold weather and the numerous holiday parties are sure to help push our numbers up We estimate that unit sales during this month would be 740,000 This quarter will be the highest in sales every year 47 We expect the surplus in sales during this time to carry us throughout the rest of the year so we can continue to thrive and see our product grow throughout the years to come BUDGETS In 2018, estimated budget for new product of the company as follows: Advertising Internet Outdoor Each area sales Promotion Public Relations (pr) Charitable activities Channel/ advertising program Facebook Locations Total cost Around the world 890.000.000vnd twitter Around the world 1.000 000.000vnd Instagram Around the world 960.000.000vnd Advertising panel 50 tables 780.000.000vnd Posters car stickers 500 posters 878.000.000vnd Perform sales program HANOI and HO CHI MINH City 700.000.000vnd Other area 500.000.000vnd The first day Everywhere for new drink 900.000.000vnd “Happy New Year” 4.600.000.000vnd 1/1/2019 47 Media Form of advertising Summer and Everywhere fall season 3.220.000.000vnd Product research costs 2.445.000.000vnd Cost of changing product design 2.000.000.000vnd Materials 8.800.000.000vnd Tax The costs incurred (service, manufacturing,… ) Total cost 1.500.000.000vnd 6.000.000.000vnd 35.173.000.000vnd 47 Season CONTROLS Starbucks will engage in metrics analysis tools to monitor lead generation, customer engagement, and sales curated For online campaigns, Starbucks will implement the use of highly rated, industry-standard metrics monitoring software as well as a Customer Relationship Management database to effectively manage all Starbucks customers and leads To track the ROI of in-store and offline marketing efforts, Starbucks will monitor and analyze sales results during specific campaign time frames For example, during the free in store tasting days, Starbucks will monitor and analyze store traffic and sales trends, including referencing criteria such as geography in results In 2017, Starbucks' revenue amounted to approximately 22.39 billion U.S dollars So, this year it will grow to more 25% Starbucks has also introduced a Mobile Order & Pay (MOP) feature This allows customers to order their drinks in advance and pay within the app This reduces waiting times and allows for labor savings On introduction, comparable stores were up seven percent due to a three percent increase in traffic The company is also introducing the Starbucks Rewards Prepaid Card via Chase Bank Starbucks will monitor and analyze sales results during specific campaign time frames For example, during the free in store tasting days, Starbucks will monitor and analyze store traffic and sales trends, including referencing criteria such as geography in results Starbucks will also make a “satisfaction survey” to the customer such as How often you visit Starbucks? At least once a week At least once a month Once every few months Never Do you find Starbucks' service prompt? Yes 47 No Do the baristas greet you with a smile? Yes No On a scale of 1-10, how would you rate the ambience at Starbucks? E.g Lighting, music (1: Very bad 10: Very good) On a scale of 1-10, how would you rate the environment at Starbucks? E.g Cleanliness, tables cleared fast, litter-free (1: Very bad 10: Very good) Did the service provider provide any recommendations or introduce new products/promotions? Yes No Are you aware of Starbucks' loyalty programme ? Yes (Proceed to question No (Skip question 8, proceed to question 9) Does the loyalty programme encourage you to patronize Starbucks more often? Yes No What you like about Starbucks? (You may pick more than one) Cakes/pastries Drinks Ambience Accessible outlets Efficient service 47 Good place for studying/chilling Good service quality Popular hangout spot 10 On a scale of 1-10, please rate your overall satisfaction at Starbucks (1: Least satisfied 10: Most satisfied) Loving to hear customer’s thought, all questions, comments and feedback are always welcome Starbucks made “customer’s feedback” form such as Starbucks made some pages and websites on Facebook, Google, Twitter, etc… to discuss to track the efficiency of marketing strategy such as https://ideas.starbucks.com/ https://vi-vn.facebook.com/starbucksvietnam/ https://www.facebook.com/StarbucksIndonesia/ https://www.facebook.com/StarbucksFrance/ 47 https://twitter.com/starbucks to figure out some products features that don’t meet customer’s goal Starbucks made a survey about “customer reference” such as How often you drink coffee ? o Daily o Weekly o Monthly o Occasionally o Never When you drink coffee ? ( you could choose more than one ) o Morning o Afternoon o Evening o Midnight Where you drink coffee most often? o Home o Coffee shop o Food Court o Other (please specify ) For what reasons would you drink coffee? (you could choose more than one ) o o o o o Release stress Refreshing Social occasions Drink habit Other (please specify ) When think about buying a cup of coffee at coffee shop, which brands come to mind ? ( please list them in order of recall ) 47 What attributes are important to you when consuming coffee at coffee shop? o o o o o o o o o o o Taste Variety of coffee flavors Quality of coffee beans Price Friendly services Speed of services Sales promotion Convenient locations Spacious environment Cleanliness of the shop Enjoyable atmosphere Have you ever drink Starbucks coffee before ? o Yes o No Do you like the taste of Starbucks coffee? ( if no, please proceed to question You could choose more than one ) o Good with sweetener o Balanced acidity o Long and satisfying aftertaste o Other (please specify ) The reason why you dislike the taste of Starbucks coffee ? (You could choose more than one ) o Excess sweetener o Roasted too dark o Roasted too light o Flat aroma o Other (please specify ) 47 10 What size of Starbucks coffee you prefer ? o Short ( 10 OZ) o Tall ( 12 OZ ) o Grande ( 16 OZ ) o Venti ( 20 OZ) 11 Do you feel satisfied with the environment of Starbucks coffee shops ? (You could choose more than one ) o o o o o o o Yes No, because it is Noisy Crowded Dirty Poor decoration Other (please specify ) 47 12 What extent would following promotions influence you to purchase Starbucks coffee? o Loyalty card o Free voucher o Early bird discount o Membership discount o Set meals o 13 [ recommendation ] how could Starbucks coffee shops improve itself for you ? CONCLUSION Industry wide broadness and uniqueness of the products are the elements of differentiation strategy which is used by Starbucks as part of its market strategy Innovation of new product ideas is the heart of company's competitive strategy that puts a company in the position to charge premium prices as compared to its competitors Provision of good and pleasant environment, healthy trends in the lives of its customers is the prime focus of the company The company used differentiation strategy in its products, quality of coffee beans, brand, taste, roasting and pleasant environment of café Company is facing difficulties in retaining its premium brand image due to slow down of economy but comparatively it has bright opportunities in China and India Company has implemented strong HR practices to satisfy employees so they act as brand promoters of company and manage effective customer relations The company is consistently engaged in improving the quality of its products which lead the improvements of the lives of its customers The rush of customers at the company stores, increasing sales and profitability is the demonstration of the company's marketing success in achieving its objectives From Oct 20-23, Starbucks locations will feature new drinks created This is the second weekend in the month the company will feature this promotion Called TEA COFFEE, these new drinks are made from ingredients already found in stores, but other than being limited to using on-hand items, the drink makers have a free hand In addition to the short-term boon of having people visit to try beverages created This promotion also serves as a way for the chain to test hundreds of new beverages in a short period If any locally created drink proves especially popular, Starbucks could offer it regionally or nationally 47 With TEA COFFEE, Starbucks gets to highlight its menu flexibility while also seeing whether its customers enjoy a whole bunch of new beverages That may ultimately lead to the discovery of the next Pumpkin Spice Latte, but even if it does not, the promotion pushes a key branding message while also spiking sales for a weekend and perhaps building the relationship between customer and Starbucks REFERENCES https://www.ukessays.com/essays/marketing/the-history-and-introduction-tostarbucks-coffee-marketing-essay.php https://en.wikipedia.org/wiki/Starbucks http://www.superbrands.com/turkeysb/trcopy/files/starbucksing_3921.pdf https://www.starbucks.com/ https://www.statista.com/statistics/219513/starbucks-revenue-by-product-type/ https://www.starbucks.com/business/international-stores https://www.forbes.com/sites/walterloeb/2013/01/31/starbucks-global-coffee-gianthas-new-growth-plans https://news.starbucks.com/leadership/howard-schultz https://in.reuters.com/article/us-starbucks-japan-idUSKCN0HI2I820140924 https://www.starbucks.com.my/about-us/starbucks-malaysia https://www.forbes.com/sites/greatspeculations/2015/11/09/what-are-the-keyfactors-driving-growth-for-starbucks/#7abf63847a4f http://panmore.com/starbucks-coffee-vision-statement-mission-statement http://panmore.com/starbucks-coffee-swot-analysis 47 https://investor.starbucks.com/ir-home/default.aspx ... - previous year Before launching the product, the company will post ads for new products on - TV, social networking sites and media Began displaying and selling products in starbucks stores around... of revenue for the company was about 20% of its initial capital - Next step: ( 10 months) The new product of Starbucks will be popular in the world Starbucks Coffee’s Vision Statement Starbucks. .. the products are most important to Starbucks primary raw (coffee beans and tea) and the formula will decide the quality of the new product 47 First of all, we need an impressive design for the new