MARKETING2 Contents Introduction......................................................................................................................................2 Analysis...........................................................................................................................................2 Market Research..............................................................................................................................3 Value chain analysis........................................................................................................................3 Key factor that impacts on the promotion of the New Product.......................................................5 Unique positioning...........................................................................................................................6 Financial Resources.........................................................................................................................7 Market Entrance strategy.................................................................................................................7 Potential Risks.................................................................................................................................8 Conclusion.......................................................................................................................................8 References......................................................................................................................................10
MARKETING3 Introduction In the year 1971 the two teachers of Seattle’s Pike place Market had opened the first retail shop called Starbucks. The company used to sell the ground coffee, bean, spices and tea. The company now has around 20,000 of stores around the World that is from Columbia to Monaco and many others. The company has been famous for its innovation and that is the reason of the constant growth of the company. Starbucks is a unique for its ethical sourcing initiatives, health benefits to the employee stock options. The company evolution is continuous in all over the World. The company had a global marketing phenomenon and reinvents their operations that suits their ambitions of growth but remains always honest for serving the coffee in the atmosphere which is friendly(Glowik, 2017).In the coffee house industry the company is the first who had pioneer in many regions around the World. The company by virtue had introduced the concept of coffee mainly in the Asia Specific countries.The company has also reinventing itself in the countries where the culture of coffee house is very sophisticated like European countries. It becomes compulsion for the company to analyze their strategy before entering into any new market. In this report the market strategy of Starbucks will be discussed that how it will enter into a new market in the country of Morocco and what will be their strategy before entering into Morocco. In this report market analysis will be done entering into a new market of Morocco and the Starbucks newly launched ice cream that how it will work in the market(Taecharungroj, 2017). Analysis Starbucks focuses on the market analysis before entering into any country. The strategy that has been followed by the company is differentiation strategy. The differentiated products strategy had been used by the company within the target consumer market(Alwaleed, Huwail, Singh, and AlMejhem, 2019). The company for the expansion its operations in the international market they are offering a premium quality coffee experience to the international customers and with aesthetically designed ambiance. The company is assured and there is the uniformity in their marketing strategy as they only use the third party mediums for their marketing strategy (Sholihah, Ali, Ahmed, and Prabandari, 2016).
MARKETING4 Market Research Starbuck had earned the reputation by possessing the excellent network of distribution that is between the specialty of the coffee industry which is very different from its growth strategy (Harrington, Ottenbacher, and Fauser, 2017). The company has the strategy before entering into any market firstly the company do the in depth research of the market. It helps the company in penetrate easily and in an effective manner. The company also by this process gets the attention in the targeted market(Lakshminarayanan, Maggio, and Best, 2017). Value chain analysis Inbound LogisticStarbucks inbound logistics had been refer to those coffee buyers who are appointed by the company to select the best quality of the coffee beans from the producers in the Asia, Africa and Latin America. In Starbuck case the unroasted or green are directly procured from the farms of the Starbuck buyers (Samper, Giovannucci, and Marques Vieira, 2017). Outbound LogisticThere are very few or having no presence of the intermediaries in the selling of the product. The products are majorly sold either by their own or by the licensed stores only. By having a new venture or the company sold through some of the retailers who has the lead in the market(Ramaswamy, and Ozcan, 2016). Operations:In almost 75 markets Starbucks operates, either the company itself owned stores or by through franchising the stores. The company has 24,000 stores all around the World.The company includes Starbucks Coffee,Seattle’sBestCoffee,EvolutionFreshandTeavanaretail locations. The company earns revenue around 79% from the stores operated by the company(Ramaswamy, and Ozcan, 2016). ServicesThe aim of the Starbucks to build loyal customers through the stores by
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MARKETING5 providing service to the customers. The company in itrs annual report stated that it will be the leading retailer by targeting the market and selling the best quality products, also provide the unique Starbuck experience(Ramaswamy, and Ozcan, 2016). Firm InfrastructureThe firm infrastructure includes the departments like finance, legal and management, etc. that are all are required so that the company stores operation should take place. The Starbucks having pleasing stores and well-designed that are complemented with the best service provided by the company(Wu, 2017). HumanResource Management The workforceplaysa key rolein thesuccessof the company. Starbucks has grown over the years due to its committed workforce. Starbucks motivate their employees by generous incentives and other benefits. Starbucks is known for caring of their people and it is the main reason behind the low turnover of the workforce of the company thatindicatesthecompanyhasthegreatestHumanResource Management.The company conducts various training programs that sets a work culture that have created the staff efficient and motivated (Wu, 2017). Technological Development In the technology the company is well known for utilizing it. The company not only use the technology for the process relating to coffee but it also makes the connection with the customers. Many of the people use the stores of the Starbuck for the place of meeting or as a makeshiftofficeduetothereasonoffreeandunlimited Wifi(Ramaswamy, and Ozcan, 2016).
MARKETING6 The reason behind the success of the Starbucks is always been people. The model set by the company is all about the people in the Worldwide. The company used the best payment plans and various other benefits packages for their farmers and for their local employees. The company had the idea that if they will please their employees better than they will automatically pleases their customers in a very good manner(Li, 2018). Starbucks always put customer service on priority. The people attitude coupled with innovative and good quality products had made the company successful in the market. The company has offered and increased the number of products that they offer and it has been done to please the loyal customers of the company(Voigt, Buliga, and Michl, 2017).The company manage location in a very strategic and the activities drive by the company as frame the market opportunity, analyze the scope in the market,value position been managed, unique source system of the organization been managed, articulation the model of finance and integration been managed(Atzori, Shapoval, and Murphy, 2018). Key factor that impacts on the promotion of the New Product There are various key factors that will impact on the promotion as they are: Nature of Product: One of the newly launched products of Starbuck is Starbuck ice cream. Therefore, advertising as well as publicity are more suitable for the consumer goods, especially the convenience goods. Nature of Market: It has been analyzed that in the market the company is launching that what is the taste of the consumer in that market is the very important factor. If the company is launching its product in the Morocco than the factors that are affect by the culture of the country. Also it has been seen what the demographics of the country is. Availability of funds: the marketing budget decides the promotion mix. Huge funds are available for the promotion that helps in creating large level of promotion to the certain extent. However, Starbucks will choose promotional tool wisely that will help in utilizing the resources in more efficient manner.
MARKETING7 Readiness of Buyer and Sellers: The Company also saw the buying and selling power of the suppliers and the buyers in the country. It will evaluate that whether the region will adopt the new product or will continue with the old policies that all will be depends on these factors (Sholihah, Ali, Ahmed, and Prabandari, 2016). Unique positioning The company is reinventing the coffee experience with a touch of ice cream. The company not selling ice cream in a scoop or by other system that the other ice cream companies sells their ice cream. The company is testing affogato that is an Italian style of dessert. In the shot of hot espresso the scoop of ice cream is drowned to have a great experience of coffee and the ice cream. Not only affogato the company will also offer the cold brew malts and brew floats. There are some unique qualities and the varieties of the newly launched ice cream of Starbucks that are:- Classic Affogato:Reserve small-lot espresso two shots poured over the vanilla ice cream. House Affogato: Reserve small-lot espresso two shots with a touch of syrup called Demerara which is poured over the vanilla ice cream which will be dusted with the ingredients of cinnamon. Cold Brew Float: cold brew reserve small-lot with a normal scoop of vanilla ice cream. Cold Brew Malt: Reserve small-lot cold brew with an ultra-thick spindle-blended malted milkshake , chocolate bitters and vanilla ice cream There are some new affogato-inspired offerings at the locations of Starbucks: Classic Espresso Affogato: In the vanilla ice cream two shots of espresso had been poured over. StarbucksCold Brew Float: Over the vanilla ice cream Cold brew poured over. Starbucks Cold Brew Malt: With the scoop of ice cream with the Cold brew been blended, chocolate bitters and malt (Spencer, et.al., 2016). The company product is very unique in terms of the ice cream as the company had given the ice cream touch in the coffee which is the very unique concept and no any other company had
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MARKETING8 invented this type of product. In the Moroco the market is very large and the people of the country love to experiment a unique product(Dorn, Messner, and Wänke, 2016). Financial Resources The company received the heavy funding from its stockholders. After the year 1972 the company went to the public for the creation of the new perception of the business value. The company has over the year had made a solid place in the stock market that helps the company for the expansion in the international market. The company to enter into the market of Morocco required that finance from the public which the company can raise from the Stock Market. The company internal fund is also very strong as in the past the company has expanded its presence in the in international market by using their cash flows that states that company can also utilize their funds for the entry in Morocco and for the launching of the new product. The company newly innovate product Starbuck ice cream can be very effective for driving a future growth and that helps the company to raise funds easily from the market.There are various companies which fund the new and innovative products and for that the company can raise huge funds from them for the entry and promoting the new product of the company in the market of Morocco. Market Entrance strategy Technology and Globalization had become two main elements in the modern world and mostly companies used this market strategy for entering into a new market.To expansion of the company internationally is not only the success indicator but also it becomes necessary to survive in the competitive World. Either the company in exports, ventures franchises, FDI or taking over the other companies had become the strategies of every other company in the World. The companies before entering into a new market it is required that all factors are carefully evaluated regarding the decision of the expansion in the region. The company initiate in the business in Morocco they adopt strategy by making a joint venture with local retailers of the country(Snell, Lemley, Snell, and Yemen, 2017). The company when enter into the country like Morocco it see what products are in demand, what technology should been utilized and what are skills of human of that country and all other
MARKETING9 resources that are required by the company for the operation. The human and capital investment of the company for the expansion in the new region is decided ultimately that what will be the profitability in that region for the company(Harrington, Ottenbacher, and Fauser, 2017). Potential Risks The company due to its innovative products had made his name in the market but this innovative thing sometimes becomes the risky for the company. The company raised funds from the market which has not been tested in that region before and in the case of failure of the product in that region that affects the company capital in a huge way(Taecharungroj, 2017). The company’s pricing is very high although the company has able to maintain its customers and people get ready for paying that amount. But in the recent times the company is facing a huge competition from the other companies in pricing and quality. The companies like Costa and many new emerging companies are providing quality products at reasonable rates. Therefore in the future the company’scustomer can move towards them and that will be the big crisis for the company. The other potential risk for the company is manpower because the company will not get in every country the same skilled labor and with that cost what they are paying in other countries.In Some countries and especially in the country the retention rate of employees is very less that can be riskier and costlier for the company in Morocco and that has been the big risk for the company (Gupta, Nagpal, and Malik, 2018). Conclusion It can be concluded that Starbucks is the world’s biggest chain of coffee and the company has been famous for innovative products. The company product is quality is the finest in the market. The company before entering into any market firstly analyzes the market and then enters into that market. The company first focuses whether the company can generate the profit in that market and what is the condition of that market. It has been analyzed from the report that the company conducts a market research before entering into any market that what is the position of the market and what are the taste of the customers in that market. The company had launched a new product is Starbucks ice cream and that will be analyzed that what factors can affect that product in the market. The value chain of the company describes that what is inbound and outbound and how operation takes place and it has been found that company had operated in a
MARKETING10 very good way. The company is famous for taking care of their employees and that is the reason behind the success of the company.The company newly launched product has various innovative products that make the company different from others. It has been found that product has the unique positioning in the market. The company had made various strategies to enter in the market of Morocco and to launch the newly launched product called Starbucks ice cream. However there are various risks in the market of Morocco which the company has to take care and enter that h been analyzed in this report.
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MARKETING11 References Alwaleed, N., Al Huwail, N.H., Singh, S. and AlMejhem, A. (2019) A Case Study on STARBUCKS.Journal of the community development in Asia,2(2). Atzori,R., Shapoval,V.and Murphy,K.S. (2018)MeasuringGenerationYconsumers’ perceptions of green practices at Starbucks: An IPA analysis.Journal of foodservice business research,21(1), pp.1-21. Dorn, M., Messner, C. and Wänke, M. (2016) Partitioning the choice task makes Starbucks coffee taste better.Journal of Marketing Behavior,1(3-4), pp.363-384. Glowik, M. (2017) 4.7 Case study: Starbucks.Global Strategy in the Service Industries: Dynamics, Analysis, Growth, p.156. Gupta,P.,Nagpal,A.andMalik,D.(2018)Starbucks:globalbrandinemerging markets.Emerald Emerging Markets Case Studies,8(4), pp.1-22. Harrington, R.J., Ottenbacher, M.C. and Fauser, S. (2017) QSR brand value: Marketing mix dimensionsamongMcDonald’s,KFC,BurgerKing,SubwayandStarbucks.International Journal of Contemporary Hospitality Management,29(1), pp.551-570. Harrington, R.J., Ottenbacher, M.C. and Fauser, S. (2017) QSR brand value: Marketing mix dimensionsamongMcDonald’s,KFC,BurgerKing,SubwayandStarbucks.International Journal of Contemporary Hospitality Management,29(1), pp.551-570. Lakshminarayanan, S., Maggio, E. and Best, S. (2017) Kofi or Coffee-Starbucks Enters the Indian Market.Journal of Case Studies,35(2), pp.44-55. Li, C.Y. (2018) Consumer behavior in switching between membership cards and mobile applications: The case of Starbucks.Computers in Human Behavior,84, pp.171-184. Ramaswamy, V. and Ozcan, K. (2016) Brand value co-creation in a digitalized world: An integrativeframeworkandresearchimplications.InternationalJournalofResearchin Marketing,33(1), pp.93-106.
MARKETING12 Samper, L., Giovannucci, D. and Marques Vieira, L. (2017) The powerful role of intangibles in the coffee value chain.Economic research paper, 9(39). Sholihah, P.I., Ali, M., Ahmed, K. and Prabandari, S.P. (2016) The Strategy of Starbucks and it's Effectiveness on its Operations in China, a SWOT Analysis.Asian Journal of Business and Management (ISSN: 2321–2802) Volume. Sholihah, P.I., Ali, M., Ahmed, K. and Prabandari, S.P. (2016) The Strategy of Starbucks and it's Effectiveness on its Operations in China, a SWOT Analysis.Asian Journal of Business and Management (ISSN: 2321–2802) Volume. Snell, S.A., Lemley, A., Snell, S.A. and Yemen, G. (2017) Starbucks: Schultz Back in the Brew.Darden Business Publishing Cases, pp.1-18. Spencer, M., Gupta, A., Van Dam, L., Shannon, C., Menees, S. and Chey, W.D. (2016) Artificial sweeteners:asystematicreviewandprimerforgastroenterologists.Journalof neurogastroenterology and motility,22(2), p.168. Taecharungroj, V. (2017) Starbucks’ marketing communications strategy on Twitter.Journal of Marketing Communications,23(6), pp.552-571. Taecharungroj, V. (2017) Starbucks’ marketing communications strategy on Twitter.Journal of Marketing Communications,23(6), pp.552-571. Voigt, K.I., Buliga, O. and Michl, K. (2017) Globalizing Coffee Culture: The Case of Starbucks. InBusiness Model Pioneers(pp. 41-53). Springer, Cham. Wu, H.C. (2017) What drives experiential loyalty? A case study of Starbucks coffee chain in Taiwan.British Food Journal,119(3), pp.468-496.