Forecasting Sales, Gross, and Operating Profit of Starbucks

Starbucks' financial performance has been consistently strong, with operating income reaching $3601 million in 2015 and $3081.1 million in 2014. The company's total net revenues have also shown a steady increase, with percentages of 18.8% in 2015 and 18.7% in 2014. Furthermore, the company's net earnings have grown, reaching $2557.4 million in 2015 and $2068.1 million in 2014. The forecasting of sales, gross, and operating profit is crucial for management to develop an effective marketing plan, analyze future sales and profits, and manage marketing operations in the food and beverages sector. According to the annual report, the company's present sales and gross and operating profit are $19162.7 million and $3601.0 million, respectively, with a growth rate of over 10% in the past three years. The future sales and gross and operating profit forecasted for 2017-2019 indicate continued growth, with future sales reaching $21079 million in 2017, $23186.9 million in 2018, and $25505.7 million in 2019.

MARKETING PLANNING

Table of Contents
INTRODUCTION...........................................................................................................................1
Q.1 Product focus........................................................................................................................1
Q.2 Marketing programme .........................................................................................................3
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

Illustration Index
Illustration 1: Revenues and sales of corporation............................................................................6
Illustration 2: Operating income and expenses................................................................................7
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Index of Tables
Table 1: present sales and profit of Starbucks.................................................................................8
Table 2: Future sales and profit of corporation................................................................................8
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INTRODUCTION
Marketing plan is organizational blueprint which provides effective help in developing
advertisement and marketing practices of corporation in the future. It contribute effective role for
organisation to achieve its goals and objectives by following planned strategies in the market
(Craig and Campbell, 2012). Starbucks is cafe chain organisation which provide better food and
beverages to consumers in the United states of America. The present report describes about the
SMART objectives, segmentation, targeting as well as positioning strategies of corporation in the
market. It also includes the marketing mix and financial data projections like past and current
sales revenue, gross and operating profit as well as forecasting sales of three years for Starbucks
in food and beverages industry.
Q.1 Product focus
Project focus helps the Starbucks organization to design its objectives, segmentation,
targeting and positioning strategies in the market.
SMART objectives
SMART objectives of Starbucks is explained below in the table.
Factors Objectives Analysis
Specific To develop market sales in
various European nations
countries.
Starbucks will consider requirements and
wants of customers in many countries.
Further, organization will focus on market
entry strategies to establish its business in
international market (Chaharbaghi and
Lynch, 2010).
Measurable To enhance the sales of Starbucks
by 20 % till the year 2020.
According to market condition, Starbucks
will emphasize to enhance 20 percent
sales till the next three years in the
market.
Attainable To target young and teenagers for
increasing its market.
This goal will play important role for
Starbucks to boost its market share,
growth ans sales as compared with past
years (Dasgupta and Ghatge, 2015).
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Realistic To focus on effective promotion ,
advertisement as well as product
development as per requirement of
consumers.
Promotional and advertisement strategies
of Starbucks will be developed effectively
to produce better knowledge about
products. This objective will contribute
effective role for Starbucks to enhance its
income and revenues in the food and
beverage industry.
Time Bound To increase domestic and
international market share 3 and
5 percent respectively within three
years.
For this process, Starbucks can develop
marketing strategies and other efforts in
three years (Fullerton and Merz, 2012).
Segmentation: Management of Starbucks can use many strategies like demographic,
geographic and psycho graphic segmentation in the market. As per suggestion, organization will
use demographic segmentation to divide its consumers on the basis age, income and gender in
European and other countries (Hammervoll, 2013). This strategies will help the Starbucks to
complete its goals and objectives international markets.
Targeting strategies: There are many targeting strategies like differentiated,
undifferentiated as well as concentrated which can be used by corporation. According to
suggestion, management of Starbucks will use undifferentiated marketing strategies to target
teenagers and young people in the market. So this process contribute effective role for
corporation to increase frequency of consumers in appropriate manner.
Positioning strategies: Starbucks can use many positioning strategies like competitive,
price-quality as well as -product characteristics to effective image in mind of consumers in the
market (Pitta, 2012). As per suggestion, corporation will use price-quality positioning strategy
which will help to increase its market share and growth by providing food and beverages to
customers.
Differentiation: Starbucks can use differentiation approach to create unique image by
providing effective features. In addition to this, corporation will provide effective better taste in
food and beverage by using effective quality of raw material and innovative cooking style. This
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process will play important role for Starbucks to achieve effective competitive advantages in the
domestic and global market (Yu and Ramanathan, 2012).
Q.2 Marketing programme
Marketing schedule helps the management of corporation to cover various factors like
marketing mix and financial data.
Marketing mix
It is categorised in product, price, place and promotion which help to manage its
marketing operations. It is represented below in the points.
Product: Organisation will use effective techniques to design products of food and
beverages. In addition to this, Starbucks will also provide better quality to its consumers which
will help to increase its product range in the market (Layton, 2011). This aspect will aid
corporation to enhance its sales in food and beverages sector.
Place: Organisation will use effective places like higher populated areas to cover
maximum areas which will help to increase numbers of consumers. Along with this, it will
emphasize on the effective distribution policies which will help Starbucks to expand its business
in the European and another nations.
Price: Management of Starbucks can consider many pricing strategies like market
skimming, oriented, penetration as well as cost plus to increase its sales in food and beverages
sector (Craig, and Campbell, 2012). As per present condition, corporation will use market
oriented pricing strategies which can contribute effectively to complete its goals and objectives
in the market. Further, it will also help the organisation to get better competitive advantages as
comparison of its rivals.
Promotion: Starbucks can consider various promotional strategies to generate effective
awareness about food and beverages products. In addition to this, management of corporation
will utilize social media, television, newspapers, magazines as well as discount strategies to
promote its products in a appropriate manner within market (Chaharbaghi and Lynch, 2010).
Financial data and projections
Financial data and projection contribute effective role for the Starbucks to develop
effective marketing plan for expanding as well as increasing its sales in the market.
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This diagram shows total revenues of corporation of past four years which will help the
corporation to get appropriate financial knowledge. Further, total revenue of Starbucks is
19162.7 $, 16447.8 $, 14866 $ in 2015, 2014, 2013 years respectively (Annual report. 2016).
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Illustration 1: Revenues and sales of corporation
(Source:Annual report. 2016)

As per above diagram, operating income of Starbucks is 3601 $, 3081.1 $ in 2015 and
2015 years respectively. Further, total net revenues in percentages of firm is 18.8%, 18.7 % in
same years. In addition to this, Net earnings of corporation is 2557.4$, 2068.1$ within 2015 and
2014 years respectively (Annual report. 2016). Further, total net revenues in percentages of
organisation is 14.4% and 12.6% in the same years. (All data profits are shown in millions).
Forecasting of sales, gross and operating profit
Forecasting of sales, gross and operating profit contribute effective role for management
of Starbucks to develop effective marketing plan. This process help the organisation to analyse
future sales and profit in the market. In addition to this, these approaches aid the corporation to
manage marketing operations in food and beverages sector.
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Illustration 2: Operating income and expenses
(Source:Annual report. 2016 )

Present sales gross and operating profit
Table 1: present sales and profit of Starbucks
Year Sales of three years (Millions) Gross and operating profit
(million)
2015 19162.7 $ 3601.0 $
2014 16447.8 $ 3081. 1 $
2013 14866.8$ -
As per table present table shows sales and gross and operating profit of Starbucks in the
market. These statistics can play important role for management of corporation to analyse future
sales and profits in the upcoming years (Annual report. 2016).. In addition to this, on the analysis
of three years sales, sales growth of Starbucks is greater than 10 percent in the food and
beverages sector. Further, gross profit of organisation is higher than 15 percent in the market. So
these factors will help the management of Starbucks to analyse sales and profit in upcoming
years.
Future sales gross and operating profit
Table 2: Future sales and profit of corporation
Years Future sales (10%) (Millions) Gross and operating profit (15%)
(Millions)
2017 21079 $ 4141.15 $
2018 23186.9 $ 4762.32 $
2019 25505.7 $ 5476.66 $
As per the table, management of Starbucks future will exceeds 21079 $, 23186.9 $,
25505.7 $ within 2017, 2018 and 2019 years receptively in the market. In addition to this, Gross
and operating profit of corporation will increase 4141.15 $, 4762.32 $, 5476.66 $ in 2017, 2018
as well as 2019 receptively. Along with this, these statics contribute effective role for Starbucks
to design effective marketing plan. Further, it will help the organisation to manage corporate
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operations which will contribute effectively to enhance its efficiency and performance in a
appropriate manner.
Conclusion
From the report, it is found that SMART objectives helps the management of Starbucks
to develop effective goals and objectives in the market. Further, Segmentation, differentiation,
targeting as well as positioning strategies contribute effectively to manage its marketing plan
and business activities in a appropriate manner. In addition to this, marketing mix helps the
management of Starbucks to develop effective strategies to get success in food and beverages
industry. It can be concluded that forecasting of sales important role for organization to manage
its resources for marketing plan.
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REFERENCES
Books and Journals
Chaharbaghi, K. and Lynch, R., 2010. Sustainable competitive advantage: towards a dynamic
resource-based strategy. Management Decision. 37(1). pp. 45–50.
Craig, T. and Campbell, D., 2012. Organisations and the Business Environment. 2nd ed.
Routledge.
Dasgupta, S. and Ghatge, A., 2015. Understanding the Stickiness of Corporate Social
Responsibility Reporting as a Post Globalization Digital Marketing Strategy: A Study of
Multinational Automobile Companies in India. Indian Journal of Science and Technology,
8(S4), pp.283-292.
Fullerton, S. and Merz, G.R., 2012. The four domains of sports marketing: A conceptual
framework. Sport Marketing Quarterly. 17(2). p.90.
Hammervoll, T., 2013. Niche marketing research: status and challenges. Marketing Intelligence
& Planning. 31(3). pp.272 – 285.
Layton, R., 2011. Marketing: is management all that there is?. Journal of Historical Research in
Marketing. 3(2). pp.194–213.
Pitta, D., 2012. The challenges and opportunities of marketing to Millennials. Journal of
Consumer Marketing, 29(2).
Yu, W. and Ramanathan, R., 2012. Effects of business environment on international retail
operations: case study evidence from China. International Journal of Retail & Distribution
Management. 40(3). pp.218–234.
Online
Annual report. 2016. [Pdf]. Available Through: <http://investor.starbucks.com/phoenix.zhtml?
c=99518&p=irol-reportsannual>. [Accessed on 4th May 2016].
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