International Marketing of Starbucks: PESTEL and Marketing Mix

This report provides a comprehensive analysis of Starbucks' international marketing efforts. It begins with an executive summary highlighting the importance of marketing and its role in business success, particularly within the context of globalization. The report delves into the rationale behind international marketing, emphasizing the impact of free markets and increased competition, and includes a PESTEL analysis of a selected foreign market (New Zealand), examining political, economic, social, technological, environmental, and legal factors. The core of the report explores the marketing process, outlining key elements such as strategy analysis, environmental analysis, marketing mix, implementation, and control. It also evaluates the costs and benefits of market orientation, comparing it to a product-oriented approach and highlighting the importance of customer-centric strategies. The report concludes by proposing specific targeting, segmentation, and positioning criteria for Starbucks' products and services, offering actionable recommendations for addressing existing market challenges and improving competitive advantage. This report is a valuable resource for understanding global marketing strategies, market analysis, and case studies.

Executive Summary
In any organization, there are many different departments and one of them is marketing. Marketing
plays an important role in the success of the company. Marketing through promotional strategies
introduces the products and services of the company to the customer. The sales and profitability of
the company mainly relies on the activities performed by the marketing team. Company can
generate higher profits with the help of dynamic marketing team. In this assignment, various aspects
of marketing of Starbucks have been discussed. The assignment also focuses on the concept of
international marketing. Many large organizations including Starbuck are adopting international
marketing as increased globalization has increased the level of competition making it difficult for
the organization to gain a sustainable competitive advantage.

Task 1
1.1 Explanation why international marketing is being developed by firms and the
presentation of the PESTEL analysis for the selected market in case of identified
services and the products.
When the services and products of the business are being directed towards the consumers in
countries other than those countries in which they are operating is known as international marketing.
It could be said that concept of the international marketing is same all over the world. However, the
environment in which the marketing plan is implemented could be different dramatically from one
country to another country. Some of the reasons are given below for which the companies opt for
international marketing.
Free market: it is that economy where less or even no legal restrictions are being imposed on doing
the international trade. It is determined by the participants in the free market that what type of
products are being made and how those products are made and then to whom those products would
be offered. Moreover, it will also be determined that what would be the price of the products.
Competition: there is more competition due to globalization. This competition could be related to
cost and price, the products and services, the company’s quick production and the fats response of
the customers. In a case of international marketing firms are more encouraged.
In the market, there is the large multitude of choices and due to which the behaviors are affected:
then want to get the services and goods in the more efficient way. So, the company must pay the
huge attention towards the preferences of the customers (Baines, Fill and Page, 2013)
The situation of world trade:
Over the past several decades the tremendous growth of international trade has been both the effect
of the international trade and the primary cause. In 2005 the volume of international trade increased
to $8 trillion, and it was $296 billion in 1950. A decline has been noticed in the recent year’s world
trade.

PESTLE Analysis of Foreign Market
Political factors
It was 1907 when New Zealand won the freedom from England, and it is the independent country.
It is knowns the independent state, and still, Queen of Great Britain is the chief of state, and the
leader of the government is one of one which has been selected by votes (CIA, 2014). There is less
chance of any risk if the government is stable because in short time legal rules and regulations
would not be changed.
Economic factor
During the last decade, the remarkable growth has been registered by New Zealand. This is known
as the high-income company. There is lower spending of the country in R&D activities which is
resulting in the external dependency in case of new technologies. There is a lower rate of inflation in
the economy which contributes to lower rates of interest and the purchasing parity would be
increased.
Social factor
It is the trade with in other countries on which the New Zealand’s economy is reliable extremely.
The economic condition of the country is effected by the change in lower demand. In R&D
activities there is lower spending of the country that results as in the external dependency in case of
new technologies. As being the Christian dominated religion, there are different cultures of New
Zealand. So, New Zealand is completely different in Christmas and other festivals.
Technological Environment
The education system of New Zealand is ranked by OECD's Programme for International Student
Assessment (PISA) at the 7th best in the world as the students of this country are performing
extraordinary well in this country. There are almost thirteen school’s years, and those are the public
schools and those are free for the students of New Zealand. From the age of 5th birthday, there is
permanent residence to the age of the end of calendar following 19th birthday. There is an adult
literacy rate of 99% and more than the half of the population is of the age between 15 to 29 hold a
tertiary qualification.
Environmental Factors
900 kilometers away from the Australia the country is located, and there is a unique ecological
system. All the educational population has the knowledge about the change in the weather, and they
are more ready for getting rid of such pollution. Latest techniques have been adopted so that they
could deal with garbage and do not allow it make the pollution in the atmosphere.
Legal Factors

After every three years, the government is changed, and new rules are made by the new government,
but in the county, the crime rate is very low. The corruption has been removed from the society so
that they could avail the basic facilities in the society. For starting the business, the international
companies are welcomed there is the wide scope for development there. In the country, there is a
full legal cover of the international business community, and without any fear, they could perform
their business.
1.2 Explanation of the elements of processes and the marketing concepts and the benefits
and the cost evaluation of the current marketing orientation.
In the world, Starbucks is one of the most prosperous companies which has been selected for a case
study. The marketing process has four key elements which are strategy analysis, environmental
analysis, control and implementation and marketing mix.
The Marketing Process
There are many steps in the marketing process which have been given below:
1 – after the whole analyses of the marketing opportunities it could be said that Starbucks has the
opportunity to get to known about the future and the marketing trends, the capabilities and the
current resources and the external and internal environment. The weaknesses and the strengths of
the organization are being defined by researching the environment and also the competitive forces
could be analyzed due to which the businesses are effected.
2 – in the next step, the customers would be selected who would be targeted for the products and
the services. The whole market would be segmented into the different arts according to the different
perspectives and then the bets one would be selected for the products and the services.
3 – after the target marketing has been selected then the next set is to make the market strategy
which is based on the positioning of the goods and the services, the targeting, value proposal and
then segmenting. These are the three factors on which the marketing strategy has been based which
are targeting, segmentation and also positioning. Moreover, it also provides the general vision to
Starbucks that how the goals could be achieved.
4 – it could be said that the marketing mix decision is the tactical tool which is used for attracting
the customers, beating the competitors and providing the better value for the customers and
enhancing the sales. The main elements and the issues include the 4Ps which include Place,
Product, Price, and Promotion. Moreover, they also include what is produced by the company and
how much price would be charged by the company and how the products and the services would be
delivered by the company. Due to the highly complexed and the developed market, there is also
another p which has been made that stands for people and recently the addition of two further p has
been made. So, it could be said that currently there are 7Ps of marketing.

5 – the fourth element of the marketing process is implementation and control, it allows the
organizations like Starbucks to evaluate that whether they had performed and planned diligently
throughout the production so that the customers need could be satisfied, and the right marketing
approach has been brought to the market (Thomas, Housden and Thomas, 2010)
Cost and Benefits of Market Orientation
Marketing orientation could be defined as the business model which has the main concentration to
make and deliver the products according to the desires and the wishes of the customers. Starbuck
would use either of two approaches one is the marker orientation approach, and the other one is the
product oriented approach.
When marketing oriented approach is being sued by the Starbucks, it means that it would make the
products according to the desires of the customers. This approach has the advantage of meeting or
focusing the stated or the hidden needs while so it could be said that marketing orientation is the
best orientation. Either it could be said that approach expresses the marketing perception which
considers the needs of the customers as the core area. Due to which the benefits are being taken by
the decisions which are made according to the needs of the customers inside of making the products
by the Starbucks which are considered the right for the customers according to its thinking.
But the market approach is being followed by the organization because this approach brings some
cost and benefit to the Starbucks. There are some other advantages of the marketing oriented
approach, and those are: this is the process of the consumer-centric and the Starbucks’s gives more
significance to the demand of the customers and the needs, to react according to the demand of the
customers will help Starbucks to create more value and develop the loyalty customers. The
products or the services developed by the Starbucks gives the competitiveness over its customers.
If the market-oriented approach is being used it means that Starbucks must spend to make what are
the desires of the customers and all the decisions should be made according to the information
regarding the will of the customers. And it should be not being considered that business should
make the products according to his desire that what is good for the customers. Starbucks market-
oriented approach needs to make the investment in the right services and the products as there is
need of better quality and the more variety required by the customers due to that reason there is need
of constant marketing and being more sensitive regarding the customers otherwise, there are
chances that the customers will move towards the competitors (Ryan, 2014)

1.3 Propose targeting, segmentation and positioning criteria for the services and the
products in response to existing issues and problems.
Segmentation
If the customer base is being considered by Starbucks, all the customers are grounded on the attitude
and the lifestyle. According to my observation, psychographic segmentation would be the best
observation strategy and due to this type of strategy would help the company in evaluating the
customer’s behavioral characteristic and also identifying the different preferences of the customers.
The prices of products offered by Starbucks is considered premium so for the purpose of surviving
in the industry they need the premium customers. The beverages offered by Starbucks have become
more tempting, and in the case of young users it has become the matter of style and also the
business executives like and prefer the brands due to the significance of the brand. With the help of
this Psychographic segmentation, it could be said that Starbucks could easily identify customers
according to their behavioral pattern. With the help of this, they could focus on the target customers
and prefer them more. We have to find the proper age group, the life style type and group’s
geographical locations. After these factors are considered and taken in to account there would be
large help made in precisely defining the buyers. This pattern of lifestyle is known as the core
decisive and towards the decisive factors and coffee buyer’s premium inclination is made.
 Socioeconomic Classification: the main target of the Starbucks is the segment of the
premium sending with limiting targeting the students. And this made for the surety that if
anyone wants to buy the products is also welcomed to the universe of the Starbucks.
 Here the main focus of the company is for those customers who have the desire to look the
good and they can send more and more money for their satisfaction. So, it could be said that
these customers are the outdoor oriented and the fashion oriented.
 The customers of the Starbucks are out going and fun loving and also more ambitious.
Targeting
There are three diverse strategies of the Starbucks which are used for targeting the customer base:
undifferentiated, concentrated and multi-targeting.
Concentrated:
With the help of this strategy of business, large efforts are being made by the company in selecting
the specific segment form the whole universe. The strategy assists the company with the
concentrated approach in paying the attention to the valuable approaches in which they always place
the needs and the demands of the customers in their mind.
Multi-targeting:
Starbucks uses this strategy so that it could attract both the earning executives as well those
students who can afford or have the capacity to spend extra on the coffee. The business has
expanded into different markets due to which it has brought this requirement of the strategy in to the

consideration. For the objective of attracting the s students and the earning executives this is the
strategy which is used as students can also sometimes afford the little extra on the coffee. I the
different markets the business expansion has introduced this strategy requirement in tie Starbucks
limelight.
Undifferentiated Targeting:
For the brand like Starbucks, this is not the suggested strategy, as it mainly dilutes the types of the
customers and the decisions could not be made by the company upon targeting the selected set of
the customers that is not good for putting the effort in the specific direction.
The efforts of the company could be directed towards the targeting the right customers based on the
three main factors:
 Initially the Starbucks has been made regarding the narrow age and very well defined
demographic. Their gauge has been weighted in the current period and the on the youth the
focus was made on those types of the customers who can afford to send more. So, for each
category, they still have some of the products.
 The upper and the middle class is being targeted by Starbucks and the urban population in
all the areas in which it is performing the operations.
 Here the main focus is to target the college going boys since they target the youth buyers.
Position
There are three handcrafted soft drinks which have been adopted by Starbucks which are Golden
Ginger Ale, Golden Ginger Ale, and Lemon Ale. This line of products was made by the company
so that they could maintain the continuous innovation forward and make the additions of the new
variety of the beverages. As the customized and the new drink, this could be positioned to the
buyers. For positioning, this product summer is the best season as one of the drinks which need to
be must have. As the style of retro are coming back into fashion so such drinks could also become
the style management due to the reason of the attraction of the retro style. Innovators would be the
main target like these are those buyers who want to taste new type of food and the food which is
being launched in the market. The buyers who prefer late buying also want such type of beverages.

Task 2
2.1 Evaluate international marketing research techniques for a chosen market, and use
them to analyze and evaluate methods for entering the chosen market.
2.1.1 The choice of distribution channels for export of identified products/services
INDIRECT EXPORTING
For Starbucks, the principle advantage of indirect marketing is that it gives the way through which
the foreign markets could be penetrated without the risks and the complexities of the direct
exporting. A range of export services is being provided by many types of the intermediary firms.
Distinct advantages are being offered by each type of firm.
Commission agents: For the foreign firms, the buying agents or the commission are the finders
which want to find the domestic products. They want to get the desired item sat the lower rates of
the prices and the by the foreign clients the commissions are paid.
Export management companies: For one or the many products, an EMC acts as the export
department of the services or the goods. In the names of the producers, it solicits and transacts the
business which it represents or in its name for the salary or the commission and also retainer plus
commission. There are some of the EMCs which provide the quick payments for the products of the
producer by either directly purchasing the products or either arranging financing.
Export trading companies: The export of domestic services and goods is being facilitated by ETC.
Like in a case of EMC, ETC could take the product title or either export for the own accounts and
also can also act as the export department for the producers. Therefore, EMC, ETC could be used
interchangeably. The group organized or operated by the producers is the special type of ETC. So
along with the single or the multiple industries, the group could be organized, and the producers of
the competing products could be represented.
DIRECT EXPORTING
In the case of the company, the disadvantage of the direct exporting includes more control over the
processes of exports, closer relationship and potentially the higher profits to overseas marketplace
and buyers. Normally the changes in the internal organizations are made when the company chooses
to export to foreign markets directly (Baines and Fill, 2014)
Organizing for exporting: If the company is new in the exporting, then that company would make
the export sales with no difference to that of the domestic sales using the structure of the
organization and the existing personnel. As inquiries and the international sales increases however
the company may separate the exports management from that of the domestic sales. There are some
of the advantages when the domestic sales are being separated from that of the international sales,

and these advantages include the specialized and expert’s centralization that is required for dealing
with the international markets and the advantages of focusing the marketing which is more likely to
lead to the export sales at the huge level.
Sales representatives: For the products presentation, the samples and the literature products of the
company are being used by representatives to the buyer potentials. Terms of scale, territory,
procedures and the reasons are being defined by the contracts. It is the sales representative who may
either operate either on the nonexclusive basis or the exclusive basis.
Agents: It is meant by the widely-misunderstood term agent ‘to be the representative" who has the
authority and at some places the power of attorney for making the commitments on behalf of the
firm to which he is representing. In the developed countries, such term is being stopped, and they
more reply on the term "representative."
Distributors: The merchant who buys or purchases the expertise from that of the exporters and the
resells the products on the profit. A range of nonexclusive but still the complementary products is
typically carried by the distributor.
Foreign retailers: The selling of the products may also be made by the company directly to the
foreign retailers, and in the case of such transactions, all the products are limited towards the
consumer lines. New opportunities have been made by the chain of the major growth in the markets
as Japan and Europe.
Direct sales to end users: In the foreign countries, the business may sell the services and the
products. However, the buyers could be the foreign governments, banks, institutions like the
hospitals and other businesses. At the trade shows the buyers could be identified through the
government contacts and the international publications.
2.1.2 Analysis of how foreign investment decisions are made.
There is need of tactical decisions and the significant strategies while making the entrance in the
international markets. Direct investment, joint ventures, licensing and franchising and some other
types of the strategic alliance could be considered as the modes of making the entrance in the
markets.
Joint Venture: The optimism of two firms is being represented by the joint ventures which could
unite for the achievement of the marketing goals, and there is nothing which could be achieved
alone. The production capacity could be secured by JVs, and the production cost would be lowered.
Different ways are being made for gaining the economies of scale.
Licensing: A licensor like Starbucks could provide the services and the products, technology, and
brand to a licensee via the agreement. The terms of strategic alliance are being described by this
agreement that will allow the licenser to afford and make the low-risk entry in the foreign markets.

While on the other hand, the license can get the access to the unique assets and the competitive
advantage the other firms.
Franchise: It could be simply defined as the method for the distribution and the expansion of goods
and the services through the relationship of licensing. All the products and the services would be
decided by the franchisors which will be being offered by franchisees. Moreover, it will also provide
the support, brand and the system (Ryan, 2014)

Task 3
3.1 Create an outline marketing plan for a foreign market. Your answer should include
your objectives for the plan, the marketing mix, and consideration of relevant the local and
environmental issues.
International Marketing Strategies
 At the international level to be the finest coffee retailer while working strictly and
maintain its originality according to the rules.
 To provide the dignity to the employees and gain their loyalty in return
 policies regarding the price maintenance
 to gather the different categories and the wide range of customers by diversifying the
stores with the large range of products.
 To get the first focus on enhancing the profitability
 Overshadowing the small chains of coffee and imprint the permanent taste on customers.
 To provide the ungraded goods which are hygienic to the consumers (Gurd, 2013)
SWOT Analysis
Strengths
 In the United States, the coffee business has been dominated and emerging globally.
 There is more than 40% increase in the net earnings.
 At their outlets, there is the best service.
 Parts of markets and the licensed stores.
 The company has cluster units.
 To behave well with employees.
 Development and research are progressively going on.
 At the outlets, the good music collection for attracting the customers (Kids center, n.d.).
Weaknesses
 In U.S and some other countries, the major share of the company is lagging behind, so it
could be said that expansion is not homogeneous.
 Huge reliance on beverages.
 On the innovation of products of other company, least attention is paid.
 Due to lack of concentration, the difficulties have to face in the international operations.
Opportunities
 Global expansion: there are many houses of coffee internationally, and most of those houses have
been located within the US. There are many regions in which there is a possibility of the
profitability branching out including Central Europe, India and some of the areas of Africa.