Starbucks 1
Title
Author
Institution
I have answered the following questions basing on Starbucks as one of the brand of Alshaya
group of companies.
Question 1
A company designs an integrated marketing mix made up of factors under its control–product,
price, place, and promotion (the four Ps). Describe the marketing mix of your chosen brand of
Alshaya. (25marks)
Starbucks 2
Products
Starbucks Corporation has a good marketing mix which has made it stand out to be a
leading firm worldwide in coffee business. The marketing strategies employed by Starbucks
have hence helped it develop a brand and boost its popularity. With a focus on food and beverage
market, the company has innovated new business ideas to maintain relevance to products such as
filter coffee, Frappuccino blended beverages and bottled soft drinks (Rahman, 2021). The
company is most famous for the high quality coffee it offers.
Price
In research from Greenspan (2019), Starbucks uses premium pricing strategy that uses
the fact that people will pay more for the product, especially when it is top quality. They charge
higher on coffee products as compared to those from competing companies like MacDonald. The
strategy makes the company to win big while also maintaining a high status in the business
world. Despite having such a successful strategy, the company is still devising alternative
approaches in maintaining top quality products, all the while improving on customer experience.
Place
The places from which a customer can access Starbucks products are coffeehouses and
cafes, including other modern forms of delivery. The company has incorporated the use of
technology to improve on their business, for instance, the use of mobile apps to locate the nearest
retailers and help customers to place online orders. Technology has made the business to
significantly grow because of increased mobility.
Promotion
The communication approaches used by Starbucks to market their products vary from
advertisements, sales promotions, to word-of-mouth marketing (Greenspan, 2019). The company
employs verbal communication to encourage its customers to speak well of the company when
outside the premises and this enhances customer experience. Advertisements include
popularizing the company through television adverts, in magazines, social platforms such as
Facebook pages, among others.
Question 2
A SWOT analysis allows a marketer to evaluate the company’s overall strengths, weaknesses,
opportunities, and threats. Identify:
Areas that need improvement (7marks)
In order to counter challenges such low growth rate, market cannibalism, Starbucks ought
to have some subsidiary retail shops to cater for the ordinary customers. Especially in countries
like America, where the coffee drinking culture is more pronounced.
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Areas where competitors have an advantage over your selected brand (7marks)
Diversity
Starbuck’s primary products are beverage and so several food accompaniments that a
customer may need are unavailable. Research by Azriuddin et al.,(2020) suggests that the
company should decaffeinated coffee to boost their market strategy because many people are
choosing it because it is safer health wise.
Technology
Starbuck has not fully incorporated all their activities within a digital environment in
most areas as compared to some of its top competitors, like MacDonald, which has more robust
digital systems for their daily operations.
Core strengths of the business (5.5 marks)
Starbucks has established itself as a top quality brand and enjoys a high status in the
business world. In research from Chuang (2020), the company’s influence grew significantly in
China, despite many the Chinese population not used to taking coffee. The company treats its
employees as “partners”. The employees are thus given coffee and partner vouchers for free,
including health insurance cover for the employees’ parents.
Potential opportunities for growth in the market (5.5 marks)
The quality services offered by Starbucks attract a good number of the young population
within the age bracket of twenties up to thirty, which is a major boost to their clientele. That
majority of the world population is young, especially in some market zones like China projects
growth of Starbucks as a brand. Starbucks has been involved in increasing their coffee
production by supporting coffee farming in countries like Colombia and Ethiopia and China.
Question 3
STP marketing is an acronym for segmentation, Targeting and Positioning – a three-step model
that examines your products or services and the way you communicate their benefits to specific
segments. Illustrate the following for your chosen brand:
Segmentation (breaking your customer base into smaller groups). Explain how culture and
psychographic factors can affect the purchase decision. (10 marks)
Starbucks has extended its dominance globally beyond its country of origin (America)
and is still striving to keep the pace alive. The company has had hurdles in some Asian countries,
like China, where the coffee culture is not prominent. Therefore, it has taken time for the
company to establish a reasonable market share. In contrast, it has had significant success in
America because people have that culture of having coffee to steer up activeness. Coffee is also a
stimulant and is normally served in several offices to cheer up employees. These factors have
improved the purchasing power in such regions.
Starbucks 4
Target (Market targeting involves evaluating each market segment’s attractiveness and
selecting one or more segments to enter)
Starbucks mainly targets the middle to high-class individuals who have like top-tier
services. Therefore, they have made it their culture to maintain the high quality of their products
and also equally charge for the services. They mostly attract college students and young rich
individuals who like the high status.
Positioning (Arranging for a product to occupy a clear, distinctive, and desirable place
relative to competing products in the middle of target consumers) (10 marks)
Starbucks has made efforts to strengthen its position by encouraging growth of coffee in
various parts of the globe. The company does their own processing of the coffee berries and
produces a high-quality brand of coffee that acts as its signature. That it has specialized in
beverage makes it easy to focus and maintain a strong market position.
Question 4
It is important to gather information for gaining insights about the marketplace and
customers. Customer insights are fresh marketing information-based understanding of customers
and the marketplace that become the basis for creating customer value, engagement, and
relationships. Explain any 5 ways in which your chosen brand can gather customer and market
information to increase its market share. (25 marks)
Understanding the direct competitors:
The larger part of Starbuck’s success has been because of regular improvements over the
past years. By getting information on the weaknesses and strengths of its competitors, it is easy
for the company to understand areas that need to be developed to keep up with the international
standards. The company can hence increase its growth rate by strategizing based on the market
information of its competitors.
Innovation and testing new ideas
Because Starbucks has tried to improve over the past years, there is still intense need to
put more ideas into test and to come up with well thought-out strategies that will help the
company grow even further. By conducting pilot studies of new technological improvements,
research, the company will handle unexpected situations like in case of pandemics where
movements are restricted.
Engaging with customers closely
Keeping close ties with customers has been one cornerstone of Starbuck’s success and
thus it is necessary to improve on such interactions to make the brand grow. The company can
use social platforms to gather customer feedback and even opinion boxes within their facilities to
always be updated on any sort of problem on their side and the needed improvements, if any.
This way, the chances of the company making tremendous progress in the future are higher.
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Establishing a distinct area of Specialization
Starbucks is well known for top quality coffee drinks that sets it apart from the rest of its
competitors. However, there is a very thin line between products like beverage, cookies, pastries
and other snacks. In order to slow growth as a result of so many services offered from one point,
the company can have divisions to handle every major aspect of concern. This will bring smooth
and independent operations.
Monitoring trends.
This mainly deals with the element of technology. The world is being revolutionized by
technological developments, especially in the means of doing business. Therefore, it is necessary
that Starbucks make it a priority to adapt quickly to changing times and incorporate services
within a digital environment. Customers, suppliers, employees and other stakeholders can find an
easy and mobile way to carry out their needs.
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References:
Azriuddin, M., Kee, D. M. H., Hafizzudin, M., Fitri, M., Zakwan, M. A., AlSanousi, D., ... &
Kurniawan, O. (2020). Becoming an international brand: A case study of Starbucks.
Journal of the Community Development in Asia (JCDA), 3(1), 33-43.
Chuang, H. J. (2019). Starbucks in the World. HOLISTICA–Journal of Business and Public
Administration, 10(3), 99-110.
Rahman, M. (2021, June 7). Starbucks Marketing mix – Marketing mix of Starbucks.
Howandwhat. https://howandwhat.net/starbucks-marketing-mix-marketing-mix-of-
starbucks/
Research-Methodology. (2017, April 16). Starbucks Marketing Mix (Starbucks 7Ps of
Marketing). https://research-methodology.net/starbucks-marketing-mix-starbucks-7ps-of-
marketing-2/
Greenspan, R. (2019, February 27). Starbucks Corporation’s Marketing Mix (4Ps) Analysis.
Panmore Institute. http://panmore.com/starbucks-coffee-marketing-mix-4ps-analysis
Tsai, P. H., Lin, G. Y., Zheng, Y. L., Chen, Y. C., Chen, P. Z., & Su, Z. C. (2020). Exploring the
effect of Starbucks' green marketing on consumers' purchase decisions from consumers’
perspective. Journal of Retailing and Consumer Services, 56, 102162.
