Strategic Brand Management: Starbucks Brand Audit and Strategy

This report provides a comprehensive brand audit of Starbucks, a leading coffeehouse chain. It begins with an executive summary highlighting Starbucks' mission, target market, and key challenges, including premium pricing, competition, and declining consumer perception. The report is divided into two main parts: Brand Inventory Analysis and Brand Exploratory Analysis. The Brand Inventory Analysis covers Starbucks' product range, packaging, distribution methods, pricing strategy, promotional strategies, seasonal impacts, and points of parity and difference with competitors. The Brand Exploratory Analysis examines Starbucks' target market, brand awareness, substitute products, and customer perceptions. The report concludes with strategic recommendations for enhancing Starbucks' brand strategy, particularly focusing on opportunities in the Asian market and improving marketing plans to address competitive pressures and evolving consumer preferences. The report utilizes secondary research and provides a detailed overview of Starbucks' operations and market position, offering insights into its strengths and areas for improvement.

Running Head: Strategic Brand Management
Strategic Brand Management
Report
System04104
8/17/2019

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Executive Summary
Starbucks Corporation is the leading and most popular Coffee house of USA. Starbucks is
also popular in some other countries like Australia and some of the European countries.
Starbuck is known for its quality coffee products and beverage food products. However, the
company focuses on provide quality coffee for the people that nurture and inspire the human
spirit through one cup of coffee, one person, and one neighbourhood at a time. This is the
mission of the company.
Starbuck is limited its operation in few countries where mass number of people belongs to
western culture and have a great amount of money to spend. The target customers of the
Starbuck are young adults having a great amount of wealth or high income to spend with
family and friends in a coffee store like Starbucks. However, this is the reason that company
do not have more stores in Asian country where most of the country is developing countries
except than Japan and Russia. Starbuck needs to enhance its business in the Asian market for
further development and growth in the Asian market. Apart from this, the premium pricing
strategy, high competition in the coffee market, and decreasing consumer perception level
about Starbucks are also some major concern for the Starbucks.
To ensure future growth and development and to face the competition in the coffee market,
Starbucks need to improve its marketing plan and should accept the opportunities that are
available in the Asian market. The increasing demand of coffee instead of tea in Asian market
is also a big opportunity for Starbuck to expand its business in the developing countries of
Asia.

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Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Overview of Company...........................................................................................................3
Part-1 (Brand Inventory Analysis).............................................................................................4
Starbucks Product Range........................................................................................................4
Product Packaging and labelling............................................................................................4
Methods of Distribution.............................................................................................................5
Distribution Channel of Starbucks.........................................................................................6
Pricing Strategy of Starbucks.................................................................................................6
Promotional Strategies............................................................................................................7
Seasonal Impact on the Coffee Products................................................................................7
Points of Parity and Points of Difference with other Brands.................................................7
Part-2 (Brand Exploratory Analysis).......................................................................................10
Target Market of Starbucks..................................................................................................10
Brand Awareness and Brand Strength..................................................................................11
Substitute products...............................................................................................................11
Perception of Customers about Starbucks............................................................................12
Brand Strategy Recommendations...........................................................................................12
Conclusion................................................................................................................................13
References................................................................................................................................14

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Introduction
Starbucks Corporation is known for its best coffee products and large coffee supply chain
stores. Starbucks is operating its business almost half countries of the world. Starbucks is a
big brand name in coffee products and Food and beverage industry. This report provides
brand audit of the Starbucks that include brand inventory and brand exploratory analysis of
the company. The brand inventory analysis of Starbucks include the analysis of various
marketing activities of the company such as its products range, pricing strategy, promotional
Strategy, and POP and POD analysis of Starbucks with its competitors. The second part of
the report includes the brand awareness and strength of Starbucks. The Brand exploratory
research includes various secondary researches and find out the perception of customer about
the Starbucks. In the end of the report, some key recommendations for brand strategy have
been added followed by a short summary of the report.
Overview of Company
Starbucks is an American coffee company that operates its business operation in more than
30000 locations in 75 countries (Starbucks, 2018). The company has its own coffeehouse
chain. Starbucks was founded in 1971 in Washington (USA). The funders of Starbucks were
Jerry Baldwin, Gordon Bowker, Zev Siegl (Starbucks, 2018). The company is known for its
tasty roasted coffee and this product gave a unique experience to the customers of coffee taste
that makes the company popular among the coffee lovers. The company buy the quality
coffee beans from all around the world to roast and sell in different locations. The company
sells varieties of coffee beans and coffee drinks. Some of the famous products of Starbucks
are Hot and ice teas, freshly brewed coffee, Hot and iced espresso beverages, etc. Starbucks
also provides backed food items and sandwiches for the customers. Apart from this, the
company also known for its CSR activities and support to coffee farmers (Lee, 2017).
The current Chairman of the company is Myrone E. Ullman and CEO of the company is
Kevin Johnson. The total revenue of the company was US$24.71billion in 2018, while the net
profit of the company was US$4.51billion in 2018. There are more than 290,000 employees
are working in different locations in the company (Starbucks, 2018). The mission of the
company is to “inspire and nurture the human spirit- one person, one cup, and one
neighbourhood at a time” (Starbucks, 2018).

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Part-1 (Brand Inventory Analysis)
Starbucks generally focuses on its quality of products and brands. The company uses the
ethical sources for its coffee beans and use the beans to produce tasty coffee for people.
Starbucks are known for caring people and their stakeholders who are associated with the
Starbucks such as suppliers, farmers, customers, supply chain stores managers etc. Starbucks
treat their suppliers and partners with respect and dignity, as they are involved in providing
the tasty coffee products for the customers (Low, Rahman, and Jamaluddin, 2015).
Starbucks Product Range
There are number of products available at the Starbucks coffee stores. The Company provides
coffee products such as iced coffee, Latte, Espresso etc., Tumbler such as Starbucks tumbler,
Straight tumbler, design your own, Curved tumbler, etc., in food product item the company
provides muffin, sandwich, salads, croissant, etc. Apart from this, the company also focuses
on better services at the coffee shop for the customers (Campbell and Helleloid, 2016).
(Source: Mason, Cole, and Goza, 2017)
Product Packaging and labelling
Starbucks provides the coffee in various packaging style. The company provides coffee in
coffee mugs. The custom mugs are available in all the big malls and Starbucks coffee centres.
The company also focuses on quality and attractive packaging style for its products that

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secure the products for the long time even in the summer season. These packages are
recyclable. Starbucks is a social responsible company that always cares about the
environment and about the community in which it operates its business. That is why the
company uses the renewable materials for the packaging of products (Gupta, Nagpal, and
Malik, 2018).
(Source: Mason, Cole, and Goza, 2017)
Methods of Distribution
The company generally uses three mediums for distribution of its products. These three
medium for of distribution channels are as follow:
1. Retail Outlets: The Company sell its products from more than 30,000 retail outlets in
all over the world. The retail stores provide the best services to its customers with
great welcome. Every retail shop has its own lounge for people where people can
enjoy the ship of coffee with their family and friends. The facilities at the show were
awesome for the customers (Wu, 2017).
2. Wholesalers: The wholesalers of Starbucks supply the coffee in bulk quantity to
retail stores. The Company is connecting with wholesalers with each year and
encourage them to supply the coffee in bulk to the retail sellers and Starbucks coffee
houses.
3. Online Sales: In 2016, Starbucks launched its own mobile app that encourages people
to order their coffee online. For the convenience of customers, the company allow the
customers to select their nearby Starbucks coffee houses. Apart from this, the

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company has its own pay app through the customer can immediately pay the cost of
the coffee they ordered (Snell, Lemley, Snell, and Yemen, 2017).
Distribution Channel of Starbucks
Starbucks purchases the coffee beans directly from the farmers. The company removed the
concept of intermediaries in purchasing fresh beans of coffee and provide all the facilities,
and support amount of intermediaries to farmers. Apart from this, the Starbucks always try to
pay the advance money for the coffee beans to the farmers. Then the beans arrived at the
manufacturing facilities of Starbucks where beans are roasted by the coffee machines and
packaged by the packaging department. After all this process, the products delivered by the
Starbucks to the wholesalers and retailers and then it arrived to customers in form of tasty and
delicious coffee (Ferreira and Ferreira, 2018).
(Source: Ferreira and Ferreira, 2018)
Pricing Strategy of Starbucks
Starbucks charges premium price from the customers. Starbucks charges the high prices for
their high value or high quality products. The company believes that people are always ready
for paying high cost for the products if they get real value of their money. It means that
company thinks that it is the behaviour of customers that they are ready to buy high priced
products if they get quality products, which yield maximum satisfaction to the customers.
However, the products of Starbucks are more costly than its competitors brand like McCafe,
Costa Coffee, Dunking Donuts, Danes coffee etc. It can be said that Starbucks is the master
in value based pricing strategy and maximise its profit from last two decades (Devia, Aisjah,

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and Puspaningrum, 2018). However, Starbucks is not ever trying to compete with the cheaper
brands rather it increases the price of its mostly demanded products and reinforce the
premium pricing strategy in all over the world. Starbucks charges variable pricing even in the
USA. The products of the company generally maintain an inelastic demand curve. The
product pricing of the Starbucks is also based on the current market share in the location.
Promotional Strategies
The company uses the various promotional mix tools for advertising its products and
services. The TV advertisement and newspaper advertisement is very common as Starbucks
can spend huge money on promotion of its products (Lemus, von Feigenblatt, Orta, and
Rivero, 2015). The company also establish relationship and ask for feedback from its
customers that help the company to establish a strong relationship with customers. Every
Starbucks provides free Wi-Fi connectivity to people for social connectivity and establish
public relation. In the sales promotion, Starbucks deals in meal offers or combo offers that
attract the customer to buy the products of Starbucks in bulk quantity. It also facilitates the
customer to visit on retail chain stores of Starbucks with family and friends that promote the
public and social relation with customers (Glowik, 2017).
Seasonal Impact on the Coffee Products
Cultivation and farming of Coffee requires specific temperature and rainfall. Farming coffee
is not an easy way of farming like other things or grains. The farming of coffee requires
timely processing of beans and when season ends, the farmer needs to remove the pulp from
the coffee beans. Then coffee beans are roasted and dried for preparing the coffee products.
Although, it can be said that season directly affect the farming, manufacturing, and selling the
coffee products, but Starbucks purchased the coffee beans from various countries where
season for coffee is depending on particular time of the year (Purkayastha, Sahu, Seshaiah,
and Tripathy, 2019).
Points of Parity and Points of Difference with other Brands
Starbucks has many competitors in international coffee product market, but its thinking
makes the company different from other competitors. The company believes in innovative
thinking and its pricing strategy tactics (Voigt, Buliga, and Michl, 2017). However, the
analysis of competitors can be done in these following points:

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Points of Parity: The customer perception about the company is that Starbucks yielding
value of their money with quality and tasty coffee products. However, its competitors brand
like McCafe, Costa Coffee, and Dense Coffee etc. providing the same value to the customer
in their respective prices for product. The convenience of the company is also similar like
other coffee competitors company (Donner and Loh, 2019). However, some of the local café
provide same taste and quality of services like Starbucks in cheap rate that is a threat for the
company and increases the competition in various countries.
Competitors POP POD
Fast food stores or
other Convenience
stores
 Provide similar
convenience to the
people
 Providing same value
 Quality is better than
other competitors
 Starbucks has more
experience than others
brands
 Have more variety
products than others
 A good brand image
among the people
Supermarket brands
for home
 Provide similar
convenience to the
customers
 Providing same value
and people can easily
buy at their near
supermarkets
 Quality is better than
other competitors
 Have more variety
products than others
 A good brand image
among the people
Local Stores  May have similar
experience
 Price is mower than
Starbucks
 Provide same value
 Serve the same
community
 The large number of
stores of Starbucks more
convenience to
customers than local
retail stores
 Cleanliness
 Quick and fast services
 The large number of
employees and better

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connectivity to farmers
of for coffee beans
provide an edge over
local farmers
(Vanharanta, Kantola,
and Seikola, 2015).
Point of Difference: Starbucks is known for its taste and best services to its customers. The
online orders for coffee products provide only few coffee companies while the company has
its own pay app that provides convenience to the customers. The trust and loyalty of customer
is a major difference for the Starbucks in coffee product business. However, some
supermarkets or local shops are also proving the coffee products in low rate but the quality
and trust of customers make Starbucks different from other competitors (Dorn, Messner, and
Wänke, 2016).

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Part-2 (Brand Exploratory Analysis)
Starbucks is generally known for its marketing innovation strategy and for its premium price
foods. Starbucks serves normally the western culture people who belong to upper middle
class of income group of upper income class groups (Bliss, 2017). The Starbucks generally
target the young generation people and to those people who have receptive civilization and
life style.
Target Market of Starbucks
Starbucks targets those people who live in western culture life style. Therefore, the most of
stores of Starbucks are in USA and other European countries. The company is struggling in
the Asian market where it has very less command on the coffee market. Apart from this, the
company wants to expand its business in China, India, Japan, Indonesia etc. but the poverty
of people and poor economic conditions of these countries is a threat for the company (Kim,
Kim, and Lee, 2019). However, the Starbucks focuses on Adults people and it is really an
opportunities for the Starbucks in the Asian market, especially in south Asia where most of
the population belongs to young people.

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It is also considerable that Starbucks is missing the name of India in the above list, which is
one of the developing countries in the Asian market. However, in the USA and Australian
market company has strong hold than Asian market. The company is continuously increasing
the numbers of stores in these countries (Qian and Xing, 2016).
Brand Awareness and Brand Strength
Starbucks has strong hold in the European and American market. Although people are well
aware of this brand in these countries, but people outside of these countries are not aware
about the name of Starbucks. Especially in rural areas of USA, most of the people are
unaware about the Starbucks facilities and their services. The Company needs to work on
improve its brand awareness in the Asian and African countries where company has no hold
(Snell, Lemley, Snell, and Yemen, 2017).
The Starbucks entered in Asian market almost a decade ago but the company is still fighting
to increase its market share in the Asian market. It is known that more than 3.5 billion of
world population resides in Asian countries. Therefore, the company needs to strong strategy