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Starbucks Marketing Policy
Starbucks Corporation is an American company selling coffee and a coffee shop under the same brand name. The management company is Starbucks Corporation. Starbucks is the largest coffee company in the world. The product mix includes roasted and handcrafted high-quality coffee, tea, and some fresh food items and beverages (Grant & Jordan, 2015). The business model of the company is complicated as along with the branded coffee houses, there is also a franchise, which earns the company’s main profit. The paper investigates the elements of the marketing policy that have caused the company’s global expansion.
Starbucks Company has experienced market loss due to the economic crisis and the problem of the customers’ buying capability. Coffee houses of the brand had to be closed since the company focused on the worldwide expansion. As a result, the quantity of its shops in the USA also reduced. Moreover, there is a growing number of other players in the coffee market who propose good quality but at lower price than Starbucks does.
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Within the rapidly changing global environment, companies and consumers are increasingly suffering from global forces, which are sometimes uncontrolled. However, the company has proven to have the ability to adapt and meet the requirements of the rapidly changing market. The company’s brand identity and ethics helps Starbucks to remain the leader in the market (Sholihah, Ali, Ahmed, & Prabandari, 2016). The threat of new entrants in the market is moderate; however, it still exists. Moreover, there is a threat of emerging substitutes. In the modern world, tea and other beverages are gaining popularity fast and getting rapid promotion. Starbucks is trying to meet the threat by including new items to the menu to satisfy the requirements of the customer (Sholihah et al., 2016). Competitive rivalry in the industry is another threat for the future development of the brand. Therefore, Starbucks should focus on this factor of the external environment.
Starbucks has proven to have significant standards of corporate culture, which form the atmosphere of the brand. The core competence of the company is its ability to be effective in leveraging their cornerstone product differentiation. The front door at all coffee houses of Starbucks faces east or south so that visitors can enjoy the daylight without straight sunrays (Sholihah et al., 2016). Individual treatment is expressed in addressing customers by name when they receive a drink. Starbucks also has outstanding relations with their employees. It is the only coffee house where all employees of any level are called “partners” (Grant, 2016). However, the high level of prices and self-cannibalization through the crowding in the coffee shops are the weak sides of the company. Only a combination of efforts to improve the situation could help Starbucks improve the situation with its external environment.
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Key Industry Success Factors
The biggest factor of success in the coffee industry is the ability to prove that coffee of the company’s brand is better than that of its competitors. Special attention to customers and loyalty programs for returning ones is another factor of success (Ahlstrom & Bruton, 2010). Therefore, when attempting to please the customer, all employees should feel pride in being a part of the business. Baristas, salespeople and other members of the team in a coffee house form another success factor. In addition, marketing is helpful in creating a good image of the brand; therefore, it is essential to remember this last but not the least factor of success.
One of the best strategies chosen by Starbucks since its inception is product differentiation. Thus, coffee houses of the company offer a significant number of items of premium quality. Moreover, the location and high customer service has led to the creation of a premium brand that is expensive to follow by competitors (Sholihah et al., 2016). Another outstanding strategy, namely caring for customers and the environment, has become a factor of success in the industry. Thus, a special ring of corrugated cardboard on the glasses was designed with the aim of protecting customer’s hands from heat. Moreover, using the corporate position “Everything for the Environment,” Starbucks prompted a new solution, which also works against competitors. Thus, when buying coffee, the customer can choose a free corrugated cardboard ring or a beautiful polyurethane glass with a Starbucks logo with a small surcharge to use it the next time (Glowik, 2017). Even if the customer uses a ring with another brand, he or she has a reminder of Starbucks in his hands. Another important growth strategy for Starbuck is expansion to new countries and geographically different countries.
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The quality of Starbucks coffee is high, which attracts customers. Thus, the company has become a subject of much discussion on the media, many recent reviews and surveys, which is beneficial for the company. The company shows the most significant growth in the international segment. Therefore, there is a need in developing this area (Grant, 2016). In the framework of the international strategy, untapped rural markets should become the focus of the company for getting additional penetration (Glowik, 2017). With the growing popularity of the healthy lifestyle, it is essential to tailor menu to the new requirements of customers (Grant, 2016). Starbucks could also work on the loyalty of their customers by introducing the concept of home delivery.
The main goal of the corporation is to support Starbucks as one of the most famous and respected brands in the world. In order to achieve this goal, the corporation continues expansion of the total number of its stores in the world in such markets as the US, China, and some new regions as well as optimizes a combination of its own managerial and licensed stores in each market (Sholihah et al., 2016). Moreover, Starbucks has awareness of new technologies and thus has developed a loyalty program to attract new customers. In the scope of the modern world, the digital strategy is aimed at involving a client in the use of mobile applications, which allows obtaining maximum information about the client (Glowik, 2017). Starbucks confidently solves two key tasks that companies face in the modern world: financial stability and customer understanding.