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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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  • Number of pages: 2

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Starbucks is an American coffee company and coffeehouse chain which rose to profitability and popularity in the 1980's. Founded in Seattle, Washington, Starbucks now has over twenty-three thousand locations worldwide. Most of these locations are in the USA. Starbucks is a prime example of “second wave coffee”, and happens to be the main coffee chain like such. “Second wave” coffee is coffee establishments made for the enjoyment of specialty coffee, as specified by Starbucks serves almost everything you could want from a coffee chain, including but not limited to hot and cold drinks, whole bean coffee, “VIA” (pre-ground instant coffee), La Boulange pastries, Teavana tea products, sandwiches, chips and crackers. You can even find Starbucks product in grocery stores, and appliances, mugs and tumblers are also available at select locations. Seasonal drinks are no stranger to Starbucks and continue to be fan favorites as well. In addition, Starbucks also has branched from classic coffee chains by offering “Starbucks Evenings” which include beer, wine and appetizers. Starbucks focuses on their dark roasted coffee and also has a rewards program complete with ‘rewards stars' and mobile ordering capabilities. An efficient marketing plan is what consistently has this successful company on top, attracting more customers and boosting profits enormously. Advertising is one of Starbucks' strong assets as they use this to make all of the customers feel personally involved in the company's actions.

The industry Starbucks is a part of is called “Second wave coffee”, or coffee chains that are made for the enjoyment of specialty coffee. Their main industry is retail coffee and snacks. Starbucks is the industry leader with a 37% market share, Dunkin being the runner-up with 25%. The industry Starbucks belongs to experienced a decade of rapid, consistent growth which became interrupted by the recession in 2009. Consumer preferences changed. Revenue in the retail coffee/snack industry was nearly at a standstill, as consumers began to spend less money on little luxuries such as specialty coffees and dining out. This declined the revenue from 6.6% to $25.9 billion. This industry is projected to annually grow at a rate of 3.9% throughout the next five years. Since our economy is improving, this growth forecast can potentially reach $35.1 billion in revenue just in America alone. Consumer confidence and menu updates can be held responsible for this. Starbuck's target market is men and women aged twenty-five to forty, most of which have relatively high income and professional careers. They account for forty-nine percent of company sales, making young adults (aged eighteen to twenty-four) the runner ups at 40% of sales. The Starbucks Coffee Company accesses the adult age group through contemporary themes in its locations and advertising, and keeping products up to date in accordance to status symbols. The young adult audience is captured through techonology and networking. The ‘cool' image is important to this company and rapidly introducing new technology keeps teens (young adults) on the same wave as the company.

Starbucks keeps its loyal following of customers returning in a multitude of ways. Their high quality products that use premium ingredients of the finest quality is what the brand's equity is built on. By selling such fine, luxury quality products, they create the “Starbuck's Experience”. Understanding what exactly the “Starbucks Experience” means is crucial to understanding what the company's objective is when it comes to marketing. The “Starbucks Experience” starts with a clean store that provides you with superior customer service and giving each customer a unique experience. The maintenance of their locations as well as the cleanliness are a big part of this experience. They want to build top-notch customer loyalty, which will result in a positive reflection of each location's community's culture and create a ‘cult following' type of repeat customers. The company wants to essentially make a morning trip to Starbucks a staple in everyone's schedule, and not just their schedule, but that of their children, friends and colleagues. They even create repeat, loyal customers by organically expanding into international markets through alliances with their suppliers. The company's desire for strong customer loyalty is prominent as they are one of the most respectable and worldly brands on earth.

Marketing in the Starbucks Coffee Company doesn't end there. Their entirely personalized experience they provide each and every customer is their greatest tactic in creating repeat customers. They want their clients to communicate, they want their store to have discussable content and they want to utilize social media to the fullest extent possible. They use this by accessing customer opinion through social media. Customer feedback can improve any company in any industry, and the act of accessing feedback through social media from some of Starbuck's most loyal customers has shown the company that there is always room for improvement. Their public Facebook page has well over thirty million subscribers, which aids the brand with publicity. A project the brand launched through their Facebook page provides anybody, even employees, a chance to share their personalized take on the improvement of coffee or the brand itself. Through examining these ideas, many of them get implemented by Starbuck's selecting popular results. This gives customers the chance to go from a basic client or employee to having a voice in the company. Just like the act of the baristas asking for each customers first name and hand writing it on their order, this makes customers feel included and appreciated. Their advertising campaign via social media reached millions of people and provided the brand with great insight. This is an extremely good marketing tactic, as involving the clients allows for positive (or negative), but true, experienced feedback. The wider the audience, the broader the results.

The most unique aspect of the brand and their products is that they create the “Starbucks Experience” as mentioned earlier. This experience is always complete with personal touches, cleanliness, and an attractive environment. Starbucks designs this to make their coffee shop more inviting and unique than the competition, even giving a more high-class and luxurious feel to the whole experience. This experience continues to become more high tech. Starbuck's locations worldwide have now introduced wireless charging stations compatible with most devices, and mobile ordering. Their mobile ordering is efficient and convenient, making for a luxurious and desirable “Starbucks Experience” on or off site. Another important aspect that defines Starbuck's unique nature is their highly-customizable experience. If you can dream it, the odds are that your local barista can do it. The endless choice of flavors, drink types and other customizable options such as ice quantity and drink temperature creates a rainbow of options for everyone who orders. This is what ties together the customizable, consumer friendly experience that Starbuck's aims to create and nails every time.

Their market position and global recognition is key in Starbuck's SWOT analysis and the company's success. Their presence in the industry and the fact that their brand is globally recognized is advertisement for the company in itself. They easily maintain their thirty-six percent market share in America, making them a leader consistent with their expanding operations in many nations across the world. They're ranked number ninety-one in the best global brands of 2013, additionally making them the most recognized brand in the coffee house segment. Their global presence and market position gives them an extremely competitive advantage when it comes to both international and domestic markets. Their brand recognition also aids them in expansion. The company has obtained a high level of distribution channels as well as positive supplier and customer relationships through their global brand recognition which has done nothing but favors for the brand.

An additional strength of the Starbuck's brand is their high quality products. The only thing more important than the quality of their products is the fact that the quality is consistent at every location and every visit. Standard is not an option for Starbucks. Their convenient locations and extremely aesthetically appealing stores are another strength of the company. Their locations are always strategically placed in high traffic and visibility locations. These locations can be found anywhere from suburban strip malls and downtown settings, to universities and businesses. The brand is committed to offering a cool, contemporary vibe in each location that always includes a warm, inviting atmosphere which is temperature controlled for optimized comfort and is completed with free wi-fi, music, and a sense of community. They are additionally committed to being the ‘third place'. Home, work, Starbucks. The knowledge of their employees and the commitment of their Human Resources department is also a strong company asset that contributes greatly to their consistent, un paralleled success. These employees are assets of the company and treated as such, and receive retirement accounts and great benefits. Starbucks Coffee Company is number ninety-one on Fortune Magazine's “100 Best Places to Work For.” The Starbucks Card is their ‘value card program' which drives loyalty and promotes gift-giving as well. This also helps raise store visit frequencies amongst consumers. Their diverse products, technological mobile options and customer loyalty are just more assets on the list of company strengths of Starbucks.

The expensive products offered by the company doesn't do them any favors. In economically weak times, this drives loyal Starbucks customers to competitors. Their premium price list also poses issues for them developing in other countries or keeping daily customers as people will begin to see such an expensive coffee or snack as a ‘treat' rather than a daily necessity. Large crowds that are often difficult to accommodate in a timely matter also pose a weakness for this brand. With over eight thousand locations, Starbucks is no stranger to overcrowding. Starbuck's large-corporate image and heavy dependence on the market of America tops the list of weaknesses amongst the company. They're heavily sensitive to the needs of the USA due to the fact that their primary revenue is consumed through our country. This also poses a weakness in international affairs, as American tradition and standards may not be as well received in other countries. This is also known as the “coffee culture clash”.

Opportunity is something easily accessible to Starbucks. Expanding what they carry fresh and daily in their stores has assisted them in many ventures, such as their new and increasing lines of tea and juice, setting them apart from a classic coffee joint. Another potential opportunity for the brand is expanding their retail product line. Their pre-packaged coffee, bottled iced coffee and other merchandise globally sold in grocery stores always has room for opportunity, to improve and expand. While the brand has already combined their store loyalty card with mobile ordering, there is always an opportunity for more technological advances, especially in such a globally recognized and successful company. This growing mobile industry would provide the Starbucks brand with more business. The brand's widely recognized label can also contribute to the opportunity of expanding their brand. This can prevent the possibility of the brand diluting.

While Starbucks is an internationally recognized and powerful company, threats are still always posed. An increase in competitors is by far the most prominent threat to the brand. Since Starbucks is in a mature stage, competitors like Dunkin Brands and even mom and pop coffee shops continue to grow, with Dunkin Brands right behind Starbucks' 36% share with their very own 24.6%. The constant change and evolution of consumer tastes can put the Starbucks brand at great risk. If coffee and coffee shops turns into a fad, other companies may take over leaving Starbucks with a dangerous future. Economic crisis' such as the recession of 2008 in America could also have Starbucks struggling to stay afloat, as in such case a morning coffee would turn from a daily necessity to a once-in-a-while luxury.

Conclusively, Starbucks is a very successful international company which has successfully marketed itself into America's top coffee chain since its rise in growth in the early 1980's. Their marketing plan doesn't even need to have an overabundance of obnoxious advertising due to the nature of the company. The overwhelming dedication Starbucks Coffee Company has to the “Starbucks Experience” and the personal relationships with its loyal customers has bought them the top spot in American coffee chains for many years, and their contemporary vibe and cool environment will continue to stay on top due to their strat

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