Starbucks Marketing Strategy Overview
Starbucks Marketing Strategy Overview
STARBUCKS
COFFEE
IVANOVA Lyudmila
B- Expansion
a) In France
b) In the world
II- Analyze
- Economic constraints
- Political constraints
- Legal constraints
- Sociological constraints
- Technological constraints
- Environmental constraints
B- SWOT Analysis
A- Product
The Name
The logo
The different Starbucks drinks
The Sizes
By-products
The Shops
B- Price
C- Promotion
-Pub
Sponsoring
Media and Supports
D- Place
Location
Starbucks at Monoprix
Sales forces
Different charitable works
Human Resources
Starbucks on iPhone
VI.- Conclusion
I- Introduction
A- History of the company
The three men who love good coffee and are inspired by a mutual acquaintance, Alfred.
Peet (himself the creator of Peet's Coffee & Tea in 1966 and the initiator of coffee by
custom roasting in the United States) opened their first store in 1971 in Seattle.
Inspired by the marine world, the three men named their business Starbucks, a name
of a character from Moby Dick and chose the siren as the logo.
Following a trip to Italy where he enjoyed the atmosphere of espresso bars, he wanted
introduce this café-bar concept in the United States.
But this innovative idea will not have unanimous support from the three initiators, notably
Baldwin who would prefer to focus on the trade of coffee beans and the buyout of
Peet's stores for which they will go into debt in 1984.
This action then led to Howard Schultz's departure. He believed in his idea of a bar.
At Espresso, he decided to open his own business "Il Giornale".
But that does not mean he distanced himself from his early collaborators, because Starbucks
became the main shareholder of Il Giornale.
It was in 1986 that the founders of Starbucks sold their assets to Schultz to
concentrate on Peet's stores. To provide the 3.8 million dollars needed to
the buyout of Starbucks, Schultz benefited from the financial support of William Henry Gates II
father of Bill Gates and founder of Microsoft.
He also concluded a non-compete clause for a duration of 4 years with the new ones.
acquirers of Peet, which will prevent Schultz from expanding his brand in the market of
California.
Starbucks Corporation was born in 1987 from the merger between Il Giornale and Starbucks. The logo of
the siren will be kept but the original brown color will be replaced by the green color of
the newspaper.
However, the success is not sudden, and the brand will experience a difficult period with
a limited success. However, the brand will continue to proliferate with an average of 28 cafes
opened per year between 1988 and 1992.
In 1989, Jeffrey H. Brotman (founder of Costco Wholesale Corporation) joins the committee
of direction followed by Craig Foley and James Shennan, two of the initial investors of the
mark. Cafes are mainly open in the regions of Chicago, Portland,
Seattle and Vancouver and the brand closed its first positive fiscal year since its acquisition.
1991 is marked by the brand's entry into California and by the introduction of a system of
stock option (nicknamed Bean stock). Starbucks Corporation then became the first
non-listed company to adopt this system where employees can, under certain
conditions, buy shares of the company.
In 1992, the non-compete clause finally reached its end, Howard Schultz can
start your new conquest by beginning with San Francisco. The chain then has
165 signs.
That same year, the group entered the Nasdaq (stock exchange) and partnered with Barnes & Noble.
(important bookstore chain in the United States.)
In 1996, Starbucks continued its expansion by exporting to Asia. The chain opened its
premier café in Tokyo, Japan.
Risky bet because coffee primarily benefits from a Western image but the brand
became a fashion phenomenon and his bet was a success.
Japan became the second most important market for the brand after the United States.
After that, Starbucks increased its number of outlets across Asia, Oceania,
Middle East and also Europe.
In 2000, Howard Schultz stepped down from his position as CEO (while remaining president) to
dedicate to the most recent position of CSO (Chief Strategy Officer) and focuses on
the brand's expansion. The following year the first Starbucks opens its doors in
Continental Europe in Switzerland.
Many joint ventures will sprout thereafter in Europe: Starbucks Coffee
Germany, Starbucks Coffee Spain and Starbucks Coffee France with Grupo Vips (group
specialized in the food service industry commerce.
At the end of 2006, Starbucks had over 12,000 stores worldwide and was planning
to open 2400 more the following year. His net income was 7.8 billion dollars and
recorded a growth of 22% compared to the previous year.
Starbucks has become the most widely present coffee chain in the world and the most
important.
B-Expansion
a) In France
Since the brand c'estétoffée offering 'the Starbucks experience' to more than 10 million
consumers in 55 cafés, including two in Lyon, one in Marseille.
Starbucks Coffee's confidence in the potential of the French market has been rewarded.
on September 1, 2009, when Starbucks acquired the entire capital of Starbucks Coffee
France LLC.
b) In the world
Starbucks is the largest coffee company in the world, with over 16,858 stores.
in 50 countries, including more than 11,000 in the United States, over 1,000 in Canada and more than 700
in the United Kingdom.
Africa Egypt
North El Salvador Canada, Mexico, Puerto Rico
America the Bahamas United States
Oceania Australia New Zealand
America of Argentine Brazil Chili, Peru
South
Asia Bahrain China Hong Kong Macao,
Taiwan Indonesia Japan Jordan,
Lebanon Kuwait Malaysia Oman
Philippines Qatar Saudi Arabia
Singapore, South Korea Thailand
United Arab Emirates Vietnam India, Israel.
Europe Austria, Belgium Bulgaria
Czech Republic Denmark, France
Germany Greece Cyprus Hungary
Ireland, Netherlands Poland Portugal
Romania, Russia Spain Sweden
SwitzerlandTurkey United Kingdom Jersey.
II- Analysis
In order to better understand the sector in which Starbucks operates (the coffee market),
we will use the PESTEL model.
This tool provides an overview of the political, legal, and economic factors.
sociological, technological, and environmental factors that can influence society
present on the market.
The Micro environment includes raw material suppliers (in the case of
Starbucks, the coffee suppliers) that supply the Company (and sometimes its competitors)
who themselves supply the distributors that eventually sell their products to the
consumers.
Economic constraints:
The price of coffee is very volatile (e.g.: Freeze of 1994 in Brazil, the price of coffee goes from
1.26$ per pound at 1.80$/pound or in 2010 when coffee prices surged dramatically
spectacular due to climatic problems in the major countries
exporters.)
Starbucks is therefore forced to align its prices with the market rate to avoid
store too much loss.
There is a development of fair trade between the North and South countries.
Political Constraints:
A large part of the coffee-exporting countries are developing countries.
often in conflicts (Colombia, Cuba, Ethiopia, Nigeria,...)
Moreover, some conflicts occur between exporting and importing countries, such as
Ethiopia is asking for the origin of coffee to be noted on their product, which
risk of leading to a boycott of Starbucks products.
Legal constraints:
Starbucks uses fair trade coffee in all its locations.
he must use a specific label 'Fairtrade: MaxHavelaar' and must comply
certain constraints such as appearing before the Max Havelaar administrative council
and before the administrative council of the FLO (Fairtrade Labelling Organization).
Sociological constraints:
Having stores in different countries, Starbucks must face constraints.
sociological and cultural. The approach will be different if a Starbucks store is
found in China, in the United States or in France. Because they did not take into account the
sociological character of the French, for example, that Starbucks has had some
problems making profits in this country because the French are fond of
moments of relaxation favored on-site cafes rather than takeout.
Some countries prefer a strong coffee, others a light coffee; one must know how to adapt.
with the different cultures in order to increase its clientele.
Technological constraints:
With competition being fierce, the company Starbucks must continuously increase its budget.
in research and development. Not to mention the increase in the market for
espresso machine (such as Nespresso) and the ease of making good coffee thanks to the
pods (like Senseo). These machines allow for a quality equivalent to
the café bar experience at home. Starbucks must continuously innovate to stay relevant.
its loyal clientele.
Environmental constraints:
The raw materials that Starbucks uses are mainly dependent on
climate. The main raw material, coffee, the main exporters are the
Colombia, Brazil, and Vietnam have suffered significant climate damage that has
slow down production.
In 2009, Vietnam experienced a rather intense rainy season which slowed down the
In production, Brazil experienced a decline of 20%.
Moreover, every two years, the Arabica coffee plants should no longer be exploited.
to give them time to regenerate which affects production.
B-SWOT Analysis
Forces Faiblesses Opportunités Threats
Notoriety Standardisation New products The coffee market is
Quality On implantation and services can be not a market
Beautiful and strong image Massification (on proposed as particularly stable
products that comply with and the company is
Personalization find a Starbucks
fair trade dependent.
Profitability at every street corner Starbucks has been suffering from
The company can
Global brand of and sometimes one of them
easily extend to a few years ago
renowned café just across from the foreigner and take advantage of rise in coffee prices
its employees the other) opportunities that it gives him and milk
strong values High prices offer The competitors of the
ethics remains vulnerable to Carry out brand are very
adopt an attitude of innovation partnerships with numerous
socially presents to the States other companies and -The scandals with the
responsible Unis franchise your brand coffee producers
the entrance lessons -The company is for goods and could tarnish the image
services that have a good from the brand Example:
emphasizes the dependent on a
potential The trade conflict
details main advantage Will of the opponent of Ethiopia to
Utilize each competitive what is the consumer Starbucks in 2006.
critique for coffee sales to buy a product By becoming a
to improve performances having a multinational added value,
the possibility of financials of the group not only Starbucks has chosen
burn CDs in The economic crisis tasting, but as a model of
certain shops negatively affect also beneficial development the
The company chooses its financial results for the environment, standardization of its
his health...etc. The cafés, of its products and
even his coffee. from the company and
consumer would be its modes of
The company especially its resources
so ready to pay a consumption. This mode
has 4 factories in financial that are additional cost, if of growth opposes
York, Kent, Carson and reduced, as well as the the products that we necessarily at certain
Amsterdam and the liquidity of ["propose","possess"] local habits of
many other sites the company's of a all these consumption.
of roasting. generally characteristics. Market saturation
-Owns its own the value of the Asia has potential American and weak
company of brand is running out of breath of huge growth, market growth
transport, what Sizes that are close to the particularly China, European in terms of
allows for a gain of ridicule in name and in thanks to the evolution of coffee consumption
tastes of its inhabitants. Concern of
time, money and volume (" tall,
Customer waiting consumers on the "
Management. Large, Venti » and one to have access to a junk food
diversifies its market new size the wider range of too sweet drinks
by creating his label thirty which contains food products calories, caffeine, etc.
musical about 1L of drink or related services Boycott for
Wide range of political reasons
distribution channels (conflicts in the Middle
of the coffee: Orient who can
Café/restaurant, large evoke feelings
distribution anti-Americans
distributors -Maturity phase of
European markets and
American
III- Marketing Mixte
A-Product
The Name
The first came from the name 'Starbo' which was the last mining camp of this century.
It was located on Mount Rainier, 90km from Seattle, the hometown of the Starbucks company.
The second comes from Moby-Dick recounting the adventures of Captain Ahab.
Gordon Bowker, one of the three creators of the brand, liked "Pequod" like the boat.
in history but this idea was rejected.
But from this idea, they arrived at the conclusion of Starbuck, the first lieutenant.
of Captain Ahab.
This origin is officialized by Howard Schultz who supports it in the book Pour Your
Heart Into It: Starbucks Built a Company One Cup at a Time
Moreover, the story of the marine name brings us back to the logo that represents a mermaid with two.
queues.
-The logo
The logo comes from a Scandinavian wood engraving dating from the 15th century. One can also
draw a comparison with the Greek siren, half woman/half fish, seductive and alluring
the sailors by her song. The Starbucks siren at her creation was nude, alluring.
Subsequently, the logo underwent several changes, going from brown to green following the
fusion with Il Giornale and becomes more puritanical, the mermaid's breasts are hidden by her
hair but the navel remains visible. The features also become simpler, the logo loses
of its complexity.
In 1992, for the company's IPO, the logo is modified again, the two
The mermaid's tails are less visible.
In 2011, the logo was revamped for the 40th anniversary of the brand. The name Starbucks is
removed, only the siren remains on a green background and not black.
The brand has made a step forward and can be recognized only by its logo without.
no typology now.
The different Starbucks drinks
Starbucks offers a wide range of coffees and espressos, unlike some cafes.
From teas that stick to three or four types of coffee, Starbucks offers eight.
different cafes, as well as frappé ice creams and other alternative drinks for those who
do not like coffee (tea/chocolate).
Coffee obtained in
Very strong coffee Creation
making go through
with a strong Starbucks :
obtained aroma slowly from Cappuccino
by doing boiling water
raised by
to pass the water in a filter
filled with coffee Vanilla syrup,
under high decorated with a fillet
ground.
pressure on
through the café Exists in of caramel.
finament décaféiné.
Cappuccino American coffee
milled.
Coffee, with
Espresso
heated milk at Diluted with water
the steam for
hot.
give this
Mocha Coffee foam aspect. Caffe Latte Chocolate Cappuccino
Frappuccinos are the most popular drinks at Starbucks. Iced beverage and
flavored frappé of your choice:
Java Chip, Mocha, Chocolat, Caramel, Vanille, Fraise, Mangue-Passion, Framboise Cassis
and limited edition perfumes of the moment.
Frappuccinos also exist in a lighter version.
The Sizes
The choice of product sizes is quite varied, with 4 counted in the world and one
5thin the United States (the Thirties). The names have Italian sounds and are
identical everywhere in the world except in Quebec (Tall is replaced by Mezzo).
The packaging
Starbucks offers us two different packaging options whether for consumption on-site or to take away.
- For take-out drinks, the brand offers white cardboard cups with
the logo appearing in the middle. Simple and aesthetic.
Moreover, the brand is committed to recycling and using recycled materials.
recyclables for its cups.
In its packaging, Starbucks combines two of the ten consumption trends.
from today.
The requirement for simplicity, the packaging is not overloaded, a basic color.
(white), the important information and the logo.
The requirement of virtue, people prefer to consume products from a company
responsible
The Boutiques:
Starbucks stores are just as much a part of the product as the coffee or related merchandise.
to the brand. Indeed, above all, Howard Schultz wants to sell us a place, the 'third
place » as he calls it himself after home and the workplace.
More than a coffee chain, it wants customers to feel in a familiar place.
comfortable without social constraints.
That is why we find dark and sober colors that are calm and relaxing.
dark characteristic of the brand, brown and chestnut reminiscent of coffee, wood and
wrought iron giving an industrial and exotic feel to the whole.
You can find tables and chairs like in any traditional café, but in addition there,
find comfortable leather or fabric armchairs and sofas, giving the idea of being
in our own living room among friends.
This is how the chain stands out from its competitors, such as McDonald's which relies on
the youthful and popular side, the Starbucks brand preferred to focus on young professionals with
a more chic and mature decor that corresponds more to the prices she offers as well as to
the more responsible image it wants to convey through Fairtrade.
In addition, Starbucks has focused on HR to retain and impress its customers in the States.
In 2008, the brand closed 7,100 stores for three hours in order to train its staff.
partners for a better customer experience.
In addition, at American and Canadian Starbucks, Wi-Fi is free without the need for
special connection but on the other hand it remains paid in all other countries.
B-Price
This is due to the increasingly significant rise in the price of coffee (the highest point
since 13 years ago) that Starbucks decided to raise its prices in 2008 and again in 2011.
Company accounting:
Fees of
staff NC NC NC NC NC
Result
Operational 603 716 795 340 294 532 582 952 959 363
Taxes 245 081 289 571 108 666 127 079 368 788
Net income 425 807 507 593 238 086 294 910 715 617
RN starts from
group 425 807 507 593 238086 294 910 713 579
Revenue
10000000
8000000
6000000
4000000 Turnover
2000000
0
2006 2007 2008 2009 2010
It can be noted that Starbucks sells its products at a higher price than the competition and
yet Starbucks maintains a certain enthusiasm.
In 2011, Starbucks decided to raise its prices to cope with the increase in costs.
of coffee but the competition being tough in the coffee distribution market, Starbucks
could lose a large part of its customer base to its competitors (mainly
McDonald's for France, more popular).
So the brand decided to vary its prices where the demand was least elastic.
(low elasticity).
It is then noticed that the prices for coffees such as espressos and cappuccinos in sizes
"Tall" and "Grande" have remained unchanged or have sometimes even decreased. Product where
elasticity is the strongest, as a price increase leads to a significant decrease in
the demand is therefore a decrease in revenue.
But it is also noticeable that Starbucks has played with the prices of Frappuccino and
"Venti" and "Trenta" sizes where demand had the lowest elasticity. Being the only ones
on the market to offer these products, the brand did not have to worry about the competition
And if the brand has lost revenue, the loss has been smaller and the quantity demanded.
has only slightly decreased.
Unfortunately, this system does not exist in France, but it exists in the United States and.
Great Britain. The Starbucks loyalty card is paid for but that doesn't stop customers.
bought. Established in Seattle in 2006, this alone year 15 million cards have
Purchased summers have generated nearly 170 million in profits.
In 2009, the Gold card was introduced for Starbucks coffee addicts. This card
works like a credit card (or Moneo) that needs to be recharged using one's card
credit or major new feature of its iPhone and it costs $25 for a year, it allows for a
10% discount on all purchases with the purchase of the Starbucks card.
drink as well as for birthdays and the customer benefits from exclusive offers and
discounts.
C-Promotion
-Pub
Starbucks benefits from a lot of advertising, diverse and varied. There are many spots.
advertising, but they are mostly found on the internet and countries like France do not
do not benefit on public channels.
Simple, Starbucks promotes itself through word of mouth, many stores that
do not go unnoticed and can be found everywhere, in movies, in books, and in
magazines. The trend is to go out with a Starbucks cup in hand among the stars,
Jessica Alba, Claudia Schiffer, Paris Hilton, Katie Holmes, etc...
Even more fashionable than the 'it bag', it's truly THE item to wear.
highlighted to enter the not closed circle of cool people!
Sponsoring
It is with full knowledge that Toby Daniels, an American entrepreneur, founded the
Betacup, a competition to find an ecological solution to reduce pollution
formed by these billions of waste.
The competition reached a higher level when Starbucks decided to sponsor the
project.
On February 11, 2008, Starbucks Corp announced its separation from T-mobile as
WiFi provider to partner with AT&T, which is the largest service provider.
telephone numbers of the United States
Media and Supports
For this, the brand created an interactive dialogue box allowing its customers to
to give their opinion and to receive a response to their comments from Starbucks.
The brand has over 705,000 fans on Twitter and more than 5,428,000 on Facebook.
Users of this network feel that they have a role in the decisions of
the company and feel like part of it.
Often these are wealthy cities (therefore less afraid of high prices) where the
Inhabitants are more accustomed to this kind of concept.
Not to mention that the capitals attract the most tourists, temporary clients are
so important and additionally benefiting from the status of multinationals, tourists prefer this
that they know rather than the unknown of the new country.
The distribution of Starbucks is therefore very well organized and allows it to convey to its
consumer a responsible and useful company image with active participation
in the development of countries or regions in difficulty.
Starbucks today has more than 17,000 coffee shops located all over the world.
America, Europe, Asia, and the Middle East. They can be found everywhere, in the centers.
commercial; airports, hotels,... But the chain does not intend to stop there,
In 2010, the brand signed an agreement with Sun Hotels in South Africa allowing them to
brew coffee from the brand in their stores.
She partnered with the largest plantation
from Coffee in India (Tata) for a strategic alliance
allowing them to open Starbucks cafes in the
hotels and retail stores owned by Tata.
A stroke of genius for sure, with the growth of China the brand rules a market
promising, not to mention that, in general, Asian labor is much cheaper
that the Western cell and society can acquire a new culture, add new ones
flavors to its traditional espressos.
Starbucks has thus increased its profits by conquering a continent that some would have
deemed impossible for a coffee brand.
Starbucks at Monoprix
According to the management of Starbucks Coffee, the choice of a new distribution channel is
propose another "opportunity to taste high-end coffee at home".
The choice of this new distribution channel is not a real novelty for Starbucks.
On the brand's website, you can see that in countries such as Great Britain.
Brittany or the United States, this strategy has already been adopted.
Moreover, while in France one only finds packages
coffee beans at Monoprix, in other countries the range
is wider because it has 4 lines of different chocolates,
4 choices of ice creams, and 10 types of
Frappuccino coffee drink.
Sales forces
Red
Unicef in the Philippines, the brand has installed a box in its stores for the
gifts to provide childcare and assist in the development of
the poorest communities.
The Japanese Red Cross, Starbucks has set up donation boxes a little
all over the world to help Japan following the catastrophe of 2011.
The brand has created a Volunteering system to help the population of the new
Orléans to be rebuilt after the
passage of Cyclone Katrina.
Starbucks & Care aims to
fight against poverty. By
example by organizing a
race to help Haiti.
Human Resources:
Starbucks on iPhone
One can observe that Starbucks is a multinational that has a good marketing sector.
and who knows how to use it without spending too much money on advertising and other frills to sell
these products. Thanks to more or less free advertising through word of mouth, the
social networks and stars addicted to cardboard coffee, Starbucks can afford to
to buy a brand image to attract more customers.
In conclusion, Starbucks is far from bankruptcy but some adjustments need to be made.
how to stop the over-implantation of Starbucks stores (for example, Santa Fe has 560)
Starbucks within a 40km radius) and to review its location policy in countries
foreigners.
For the over-implantation, it's a good idea but it leaves many markets unaddressed.
exploited, such as in France where about fifty stores are open
in the Paris region and only two others in Lyon and one in Marseille, to open in
Less one in the largest cities in France would yield more profits.
For the policy of establishing operations in foreign countries, we can take France again,
While it is a success everywhere, Starbucks has some issues in becoming profitable.
maximum in France, yet a large coffee-consuming country... but the sector
Marketing had not taken into account that in France we do not drink our coffee like in the States.
In fact, the French consumer does not seek fast coffee as in the United States.
where we have our espresso and go to work, a good part of the French like to settle in
in a warm and friendly setting, what Starbucks cafes offer but taking your time
clients prevent customer turnover thus less revenue.
We can also find problems in Israel where several Starbucks were forced to
closed due to rather dark stories.
But in general, Starbucks has a good marketing policy and follows it more or less.
all the trends in this sector.
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