Marketing Essentials: Starbucks and Costa Coffee Report

This report provides a comprehensive analysis of marketing essentials, focusing on the roles and responsibilities of marketing functions, their interrelationships with other functional units within a business, and the development of a marketing plan. The report uses Starbucks as a case study, examining its marketing strategies and objectives. It delves into the marketing mix of both Starbucks and Costa Coffee, comparing their product offerings, pricing strategies, placement, promotional activities, people management, physical evidence, and operational processes. The report highlights how these elements contribute to the overall success and market share of each company. Furthermore, the report explores the importance of marketing planning and its impact on achieving organizational goals, providing a detailed overview of marketing principles and their practical application in the competitive coffee market.

Marketing essentials

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Roles and responsibilities of marketing functions ................................................................1
P2 Interrelationship of marketing with other functional units....................................................3
TASK 2............................................................................................................................................5
P3 Marketing mix of two different business organisations.........................................................5
TASK 3............................................................................................................................................9
P4 Prepare a marketing plan ......................................................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The core concept of marketing is all about creating value for customers; it is known as a
crucial function for management. Marketing is the heart of every business organization; it
captures various aspects, such as- advertising, promotion, sales and public relations. Marketing is
an activity which helps to introduce a product among potential customers. It creates awareness
for people as they can know more and more about it. In addition, marketing also fosters healthy
competition, its efforts or activities helps managers to reach large group of buyers (Askeland and
Wright, 2013). Starbucks is the chosen organisation in this present assignment, it is an American
coffee house chain. The firm was founded in 1971 and now it is currently serves in 24000
locations over the globe. In order to promote itself the firm adopts various marketing strategies
and policies. The overall operating income of the company is US$3.6 billion; the prime objective
of Starbucks is to deliver delicious taste of coffee to customers so as to gain high competitive
advantage. Apart from this, the report will be described different roles and responsibilities of
marketing functions. Readers will also come to know about interrelationship of marketing with
other functional areas of business organisations. Furthermore, a basic marketing plan is
developed to analyse market condition of the company.
TASK 1
P1 Roles and responsibilities of marketing functions
Marketing consists of management tasks and decisions directed at successfully meeting
opportunities and threats in a dynamic environment. It focuses on developing as well as
transferring a need in satisfying manner which offers ton customers in such a way that the
objectives of the organisation, buyers and society would be achieved. In other words, marketing
involves all activities, functions and efforts which are carrying out in order to render goods from
producer to its end users (Blacher-Wilson, Mense and Richardson, 2011). Along with this, the
prime objective of marketing is to create value for society so as to satisfy their needs and wants
in the best possible manner.
Below mentioned are the different marketing functions, such as-
Gathering and analysing market information – It is fundamental function of marketing
department of business association. Managers have to get and examine current market trends and
then produce accordingly. It involves – product price, quality, customers interest, advertisement
activities etc. It is essential for companies to analyse and examine this information so as to stay
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for long term period in market. Along with this, on the basis of marketing analysis company will
easily know which kind of products and services have to be produced which provides best
opportunity to company.
Marketing planning – In order to attain organisational goals and objectives, it is required
for business organisations to prepare a marketing plan. It provides proper information to
company about competitors and current market trends (Clow and James, 2013). Through which
Starbucks will easily develop its marketing strategy so as to effectively perform in target market.
For example- in upcoming years, Starbucks wants to increase its market share by 15%; in this
relation business is required to make a marketing plan and determine internal and external factors
which will hamper firm's future performance.
Product development and designing – New product development or designing also has a crucial
role in growth and development of a business organisation. In this dynamic environment,
customers needs and wants are rapidly change, thus companies have to generate new and
innovative products which are able to bring more customers. Starbucks continuously make new
improvements in its products, as this is the main reason that it is one of the famous brand over in
comparison of its competitors, i.e. McDonald, cafe coffee day and Costa Coffee.
Standardising and grading – It states that every company follows certain standards and
principles to perform effectively in target market. Whereas standards also sets towards design,
quality, colour, size, raw materials etc. in relation to a specific product. With this assistance,
company can sale its products on the basis of sample. Mostly, it is beneficial for traders as they
can show sample of the product and influence others to purchase it.
Branding – Every business organisation wants great market image or special identity at
marketplace. It this relation, they starts to give name or logo which is different from competitors.
Therefore, giving a name to brand it called branding which helps a company to get high
competitive edge (Desai, 2013). Starbucks always tries to improve its brand image; for this it
focus on generating hygienic products in their outlets. It aids company in increasing its sales and
profitability in a certain time period.
Promotion – Marketing and promotion both are two sides of a coin. The core concept of
promotion is to provide information to customers about the existing products. There are different
ways of promotion, such as- personal selling, advertising, sales promotion and publicity.
Effective promotion leads the number of customers, which also affect the decision making
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process of the company. In order to promote itself, Starbucks depend upon television, radio,
internet websites, social media and print media.
Transportation – It is required for every business organisation to carry out its products
and services to their end users. For this purpose, marketing managers are used transportation for
their physical distributions. Starbucks has its own transportation through which it can easily
deliver or handover its products to customers (Getnet, Kedir and Yousuf, 2014). Although, it is
also fundamental for business organisations to choose nearby places so as customers can reach
with these products. Thus, place utility created through transportation activities.
Buying and selling – It is the foremost function of marketing, i.e. buying and selling. In
which, buying is done to resale products whereas selling is done to increase profits. In other
words, buying is done to sell something innovative to customers. For example- Starbucks
purchase coffee beans and other raw materials in order to sell coffee to its customers. Therefore,
buying and selling is assistive in fulfil customers' needs and demands in the best possible manner
and achieve higher returns.
P2 Interrelationship of marketing with other functional units
In this competitive business environment, it is essential for every business entity to work
together. For this purpose, there is required proper communication among all managers which
improves decision making process of the company. In context of marketing, there are many
activities managed and organised so as to get better future outcomes. Therefore, it is essential for
marketing department to work with other functional areas for effective completion of all business
practices. It will also help company in accomplishing its goals and objectives in a certain time
period. There are several functional units within organisation, such as- human resource, finance,
research and development, operation and production. Below mentioned the interrelationship of
all these departments with marketing: -
Human resource department – The prime role of human resource department is-
recruitment, selection, managing and training employees so as to get better performance
outcomes. HR managers also deal with several issues regarding compensation, organisational
development, employee motivation etc. It emphasis on optimum utilisation of human resources
by improving their skills and knowledge (Griffitts, 2016). On the other hand, marketing require
large workforce who can promote company's products and services in target market. If Starbucks
has well trained and skilled staff members then they are able to influence customers towards
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purchasing products and services of company. Therefore, it helps organisation in raising the
number of customers, sales and overall profitability.
Finance department – Finance is the life blood of every corporate industry; it helps
organisations in making business activities and operations more effective. If company has
enough funds then it would generate value its offered products and services. Along with this,
finance department of Starbucks also responsible to generate or raises invoices on parties; it also
manage future risks, cash flow, taxes and investments. Although, marketing requires proper
knowledge, i.e. which is the most profitable sectors for investment purpose. Finance department
provides an accurate budget to marketing; through this knowledge, marketing department also
decides the actual amount which is going to spent on different activities, i.e. advertisements,
sales promotions, direct selling etc.
Research and development department – The major objective of research and
development division is to conduct market researches and get more and more information about
customers tastes and preferences. Starbucks annually spend US$2 million on research activities;
it also helps company to provide information about competitors strategies and policies. With this
assistance, marketing managers can easily improve the quality of their products and also modify
their current business tactics in order sustain high competitive edge (Jones and Rowley, 2011).
Furthermore, marketing research also helps in improving public relations of the company; it
results improvements in brand image in a certain time period.
Production and operational department – Operation is the basic functional area of every
business organisation which is liable for transforming inputs into outputs. The production
manager of the company set some targets in terms of quality standards which must be followed
by employees. It also ensure that stock is arriving at right time and right quality. All these
aspects helps a company to increase its sales and profitability at higher level.
Customer service department – The customer service department of the firm is liable to
recognise buyers' queries and problems so as to give them higher level of satisfaction. In
addition, healthy and positive customer services enables good public relationship within an
organisation; it results company will easily overcome with future risks and uncertainty (Jones
and Rowley, 2011). Good customer care also enhances brand image of the firm which is
beneficial for marketing department in terms of increasing sales and profitability.
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Information technology department – If a firm uses effective and advanced technology
in its production process; then it would help company to improve the quality of its products and
services. In addition, Starbucks is using several tools and techniques, i.e. online marketing for
managing sales and proficiency. The information technology department also liable for resolving
all technical issues and problems which can hamper firm's connectivity with its target customers.
TASK 2
P3 Marketing mix of two different business organisations
Marketing mix uses as operational or tactical part of a marketing plan. It helps managers
to put right product on right place so that firm can gain high competitive advantage. There are 7
elements of marketing mix, such as- product, price, place, promotion, people, physical evidence
and process. Below described the marketing mix of two different organisations, such as-
Starbucks and Costa coffee. The overall market share of Starbucks is 59.2% and Costa coffee has
14.4%.
(Source: Starbucks Marketing Mix, 2017)
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Illustration 1: Marketing mix

Marketing mix of Starbucks and Costa coffee: -
Basic Starbucks Costa Coffee
Product Starbucks is known as growing coffee
brand; the firm has unmatchable and
unbeatable experience towards its
offered products and services.
Although, the organisation specially
deals in coffee but now it has expended
itself in other sectors in order to cover
hight market growth and share
(Kennedy and Parsons, 2014). The
major products of Starbucks are – cold
coffee, hot coffee, tea, pastries,
smoothies, merchandise (instant coffee,
mugs) frappuccino beverages, caffee
latte, espresso etc. Cited coffee venture
always improves its product mix in
order to attract more buyers from target
market. Over the globe, Starbucks
provides more than 1000 variety of
products; it offers products from
season to season. For instance-
Frappuccino ice cream is served in
summer and caffe latte mostly serves
on Christmas.
Costa Coffee is also a famous brand
of Coffee; its outlets are located
globally. The main product of the
company is – coffee; which is offered
to customers in various flavours, like
Cappuccino, Flat white, Mocha,
Espresso and Americano etc. Apart
from this, certain ice blended
drinking beverages are also provided
by Costa Coffee. The business
organisation has its own coffee
machines which are available in
corporate associations and colleges
under the brand name. The company
believes to give wow moments to its
guests with its main product coffee.
Price Price of a products finds its value and
the firm is always emphasis to offer
best quality of products to customers.
Starbucks purchase best quality of
coffee beans from international market
Costa Coffee follows diverse prices
in marketing mix; although it is get
affected by market competition.
Products and services which are
offered by the company has valued at
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and ensure to hire well experienced
staff. Along with this, due to reflection
in its prices, Starbucks products are not
having low prices; it follows premium
pricing policy. For example- get high
competitive edge, the firm starts $1
bottomless coffee cups, which was
50% cheaper than its other products
and customers could refill it many
times as they want. On the other hand,
the firm also provides packaged
products at several grocery stores,
customers can purchase them on cheap
rates. Drinking beverages of Starbucks
are priced on the basis of their size and
quantity.
premium range due to its brand value
as well as quality of coffee. Prices of
coffee is increased on the basis of
added supplements, i.e. extra cream
and chocolate etc.
Place At present, Starbucks severed in 70
countries, like Africa, south and north
America, Europe and Europe. In
addition, the firm has over 6000
licensed locations; its maximum stores
are operated in USA. The official
website of Starbucks entails enough
information about every aspect of
manufacturing, varieties of coffee,
flavour details etc. Thus, here
customers can get complete
information about menu, locations,
stores, perks and benefits. Apart from
this, Starbucks has its own software
application which helps customers to
Currently, cost coffee have 3300
outlets over 35 countries. In UK only,
the firm has approx 2100 restaurants
and over 1000 outlets are located
overseas. Along with this, Costa
coffee has targeted upper middle
class people, as its restaurants are
majorly founded in malls and airports
(Lamb, Hair and McDaniel, 2011).
On the other hand, the business
organisation alter its menu as per the
tastes of customers in a country.
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provide facility as they can order
anything from there. Although, if
customers uses this app then they also
get attractive discount coupons. It helps
in attaining and retaining customers for
long term period with company.
Promotion Starbucks prefer to promote itself
through advertising. Promotion mix
elements refers various communication
strategies which is used firm in order to
disseminate relevant information to
customers. These are the promotion
strategies of Starbucks, such as-
advertising, sales promotion and public
relations. In order tom improve its
public relations the firm emphasis on
recognising their needs and wants.
(Lin and Wang, 2015) Apart from this,
Starbucks also uses television, internet
and print media so as to reach large
group of customers in a minimum time
frame. In 2015, Starbucks spend
around $4.5 million on advertising and
promotional activities.
It is premium brand so that Costa
coffee does not prefer to spend high
amount on advertisements and
promotions. Business follows a
marketing strategy of publicity
through of mouth.
People It is customer oriented company and
believes to deliver best quality
products and services to buyers for
creating imperative experience with
them. Its overall set up is maintained in
well being manner which helps
Costa Coffee is highly emphasis on
its human resources. There are over
200000 employees are currently
working with it. Its staff members are
well trained by having good
communication skills; it helps them
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company to stand over competitors. to interact with every cultural people
(Malhotra, Birks and Wills, 2013).
Apart from this, the firm also treats
its customers in well being manner.
Process Starbucks renders loyalty cards to each
guest which came in outlets; these
cards are upgrade regularly and aids
firm in drawing customers.
Furthermore, the supply chain process
of the company from procurement to
delivery is managed in ethical manner.
Starbucks uses high information
techniques so maintain its core values
and premium standards.
The company follows standard
process while dealing with customers.
It has nice sitting arrangements,
whenever a customer enter into its
outlet, they feel comfortable.
Costa coffee also provides online
payment facility to people when they
have no cash.
Physical
evidence
Starbucks stores, coffee mugs and
ambience are logo printed even paper
napkins and other items with comes
under physical evidence (Mihart,
2012). The business organisation also
uses its own machinery of coffee in
several locations.
The products and services are offered
by Costa Coffee are its physical
evidence. The firm also sells its
branded cups and variety of coffee to
customers.
TASK 3
P4 Prepare a marketing plan
Marketing planning serves as written document and provides direction to employees
regrading how to manage working activities in a given time schedule. Planning of marketing
activities allows business organisations to increase its sales and profitability. In this, all working
operations are aligned with business goals. Apart from this, market plan of Starbucks would aids
to forecast regarding sales through each efforts (Nguyen and Simkin, 2012). It forces managers
to review the quality of their products and compare it to other competitors.
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The marketing plan of Starbucks is defined as under by involving certain major stages,
such are describe as under: -
Introduction of the company – Starbucks is the leading coffee industry, but now it is not
limited with coffee products only. The firm has increased its market area, its major products are
– tea, baked goodies, sandwiches, French fries, smoothies, tea etc. In addition, the overall
revenue of Starbucks is US$19.16 billion and its total assets are US$12.45 billion. There are
over 250000 employees are presently working with it. Due to its attractive quality and delicious
taste, the firm has become now famous brand among customers. Its 17000 cafes are operating
around 50 nations involving over 12500 in United Kingdom, US and Canada. Starbucks has
covered 59.2% market share over the world.
Vision and mission of the company – The mission statement of Starbucks is nurture and
encourage human spirit- one person, one cup and one neighbourhood in a time. Apart from this,
the vision statement of the company is to implement itself as the premium brand of finest coffee
over the globe by managing uncompromising principles and ethics. In order to fulfil its mission
and vision statement, Starbucks focuses on continuously improvements its products and services
(Odunlami and Ofoegbu, 2011). It is trying to keep ahead in market competition in terms of
quality as well as quantity of coffee.
Situational analysis – The analysis can be done through SWOT and PEST analysis; it
helps managers to analyse internal and factors of environment which can influence business
operations and activities.
SWOT analysis of Starbucks
STRENGTHS
 Strong financial capabilities will help
Starbucks to occupying its stores over
the world.
 In 2015, Starbucks was values at $8.5
billion; it is a major key strength of the
company in comparison of its
competitors.
 The business organisation believes to
reinvest its profits into working
WEAKNESSES
 Depend on relationship with suppliers
 Health effects of consuming Starbucks
coffee.
 Natural disasters may also highly affect
supply.
 Employees report to two division head.
 A very quick expansion; risk of market.
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