Starbucks Marketing PlanStarbucks Marketing PlanSidney Matthews, Michele Morehouse, Thomas Smith, Jackie Warner, Jay WillisUniversity of PhoenixMKT 421Rhonda VromanApril 27, 20091
Starbucks Marketing Plan2IntroductionOne of the core functions of marketing managers is to design and implement a marketingplan. Marketing teams have different tools and methods in any organization. Marketing planshave specific functions identified as an overview of the organization, a description of the newproduct or service, a SWOT analysis of the product or service and a marketing mix. Marketingresearch, segmentation, differentiation, and positioning are vital components of the marketingplan. Once these components have been researched and developed, a marketing mix, budget, andmeans of monitoring or control are established.Organizational overviewStarbucks Coffee Company was originally founded in Seattle, Washington in 1971.Starbucks has become the world’s leading retailer of specialty coffee and retail products.Starbucks retail stores are located throughout the 50 United States and 43 countries worldwide.The company mission statement, “to establish Starbucks as the premier purveyor of the finestcoffee in the world while maintaining our uncompromising principles as we grow,” is part ofoverall vision and goal to achieve 20,000 worldwide locations (Starbucks 2008). In addition totrademark coffee, other products sold include handcrafted beverages, assorted merchandise,selected food items, entertainment products such as CDs and innovative global products.Starbucks stock went public in 1992. The company’s stock is traded on the NASDAQ undersymbol SBUX.Two important elements of the Starbucks Mission Statement are “to developenthusiastically satisfied customers all of the time and to recognize that profitability is essentialto our future success” (Starbucks, 2008). Through remaining a leader in innovative ideas, the keyto success are new methods to capture and maintain customer interest. As part of an ongoing
Starbucks Marketing Plan3process to expand Starbucks’ capability, the following marketing idea identifies a service tofurther aid Starbucks in fulfilling its mission.Product DescriptionCurrently, Starbucks has a re-loadable gift card, available in fixed monetary amounts, tobe used for any Starbucks drink or product. Although Starbucks gift cards can be used as rewardscards, many of the current cards are not used. With only four existing options available forrewards, a new tiered approach to additional rewards is needed. Rewards in the form of cash orpoints allow consumers to purchase Starbucks products will be offered. The primary purpose of aStarbucks Elite card is to provide an incentive to consumers while securing customer and brandloyalty. By combining a new incentive rewards card program, consumers will experience theopportunity to earn reward points or cash for purchases. The new program will directly benefitconsumers while reinforcing the company’s mission statement and strengthening Starbuckscustomer base.Starbucks Elite Card Attributes Include:Cost Card is freeNo maintenance feesNo reload chargesMonetary Value Prepaid Visa Value of card only worth what the customer reloads onto the cardUsability Personal BusinessCustomization: Image: 2 options Design customized Starbucks card Choose a pre-made template design Customer can choose the limit for reloads
Starbucks Marketing Plan 6 different free offers a customer can choose from for customizingChoice of house syrups with any beverage orderFree dessert with the purchase of two dessertsFree beverage on FridaysAdditional Wi-Fi connection5% off of every 10 purchase10% off of every 15 purchaseOnline Access Register Starbucks Rewards Card Reload Starbucks card Reload another users card Set-up Auto-reload Manage card account Adjust custom settingsAvailability Points Sign up at any Starbucks location & OnlineCard never expiresAny Starbucks location can look card up for coupons & pointsWith every purchase points will be applied to rewards cardEvery dollar spent equals 5 pointsEvery 50 points earned, 5 dollars is credited to rewards card monetary valueThe points will be used in credit range of 10 to 100.Businesses will have a larger credit range when services are used in larger aspectsSWOT AnalysisThe following S.W.O.T analysis of Starbucks Coffee Company for this new and revisedservice offer to customers will directly enhance consumer experience. Starbucks name is part ofits strength and synonymous with the company’s reputation for quality and innovativeness. Thecompany’s reputation for introducing and maintaining the finest products and services toconsumers is unmatched by other competitors in the marketplace. As one of Starbucks corecompetencies, a strong relationship with customers and communities is achieved through thedevelopment of a diverse, well trained and experienced staff. Additionally, Starbucks provides4
Starbucks Marketing Plan5partnership opportunities with manufacturers to use a wide range of Starbucks products as clientincentives. Regarding weaknesses, Starbucks branding strength could hamper its diversificationinto other business ventures, rewards cards could remain underutilized, and customer cardactivation and reward options could be unclear. If clear and used, Starbucks ability to expand thedemographic base while providing greater value for consumer dollars spent will produce asynergistic effect for companies and consumers. The opportunity to gain greater insight intocustomer’s needs will facilitate a more personal relationship with customers.A threat to this venture is Starbucks exposure to the rising costs of materials and property.With the recent downturn in the stock market and a decline in consumer spending, ineffectivelyanalyzing trends to meet consumer demands and industry competition will provide the greatestthreat to Starbucks stability. Therefore, before marketing a new and improved Starbucks card,research and information must be gathered effectively to identify target markets.Marketing ResearchBy researching a marketing plan, data collected will provide insight into demographics,psychographics, and comparative intelligence of our target market. The use of scientific analysiswill serve as a primary tool for selecting a marketing strategy. Starbucks marketing researchprocess include 5 steps of orderly processes. The 5 steps are: (1) define the problem, (2) analyzethe situation, (3) getting problem specific data, (4) interpreting the data, and (5) solving theproblem. An effective marketing strategy will be developed and employed for the Starbucks EliteCard and Program.Marketing research must be completed by performing a thorough customer analysis of thetarget market for the Starbucks Elite card. How will the Starbucks Elite card benefit ourcustomers? At the annual meeting of shareholders, meeting customer’s needs for value and
Starbucks Marketing Plan6quality is a priority for Starbucks. The company CEO, Howard Schultz further states that “ourcustomers are telling us they want value and quality, and we will deliver that in a way that is bothmeaningful to them and authentic to Starbucks” (Food and Beverage Close-Up, 2009).Will this effort capture and retain the desired market? Demographic consumer analysiswill help locate and determine the best selected target markets. A demographic survey willdetermine what age, income, marital status, educational, and occupational data are represented inthis new campaign. A psychographic consumer analysis will help marketing researchers gainadditional insight. Before selecting a marketing option, collected data on consumer interests andopinions will be analyzed and used in determining the target market. Psychographic analysisreveals consumer lifestyles and how consumers spend his or her time. An analysis ofgeographical data supplies marketing departments with information on areas most likely to useand benefit from the Starbucks Elite card.Marketing research data will be collected by survey. Surveys will be available online andat Starbucks retail locations. Customers will also have the option to fill out a fill out a postageprepaid survey and mail it to a regional service center. Starbucks baristas will inform Starbuckscustomers on how to participate in the survey and upon completion will receive a coupon for acomplimentary Starbucks tall coffee and be automatically entered in a drawing to win 1,000.The marketing research data collection and analysis is similar to a previous marketingresearch data collection and analysis survey that Starbucks performed in June 2008. . During the2008 campaign Starbucks offered free WiFi for Starbucks rewards card holders. All 7,000Starbucks company owned stores offered free WiFi service. Customers had to purchase aStarbucks card worth 5 or more to be engaged in the Starbucks card rewards program.
Starbucks Marketing Plan7Cardholders received complimentary milk and syrup for some drinks, and free refills on coffee.Starbucks benefited by gathering data about customer preferences through their purchases.During this campaign Starbucks will collect and analyze data received from all stores.Nearly one third of Starbucks customers have reduced his or her number of visits to Starbucks(Morgan & Stanley 2008). Survey data suggested that if prices were lower customers wouldincrease their visits to Starbucks. The current Starbuck rewards card offering is intended to meetcustomers’ demands for a more aggressive customer rewards program.A competitive analysis shows that Starbucks main competitor is Dunkin Donuts. They arethe world’s largest coffee and baked goods chain. McDonalds is also a new arrival to thespecialty coffee industry. With the growth of the industry at a constant rate, Starbucks strives tostay ahead of the competition by holding on to their loyal customer base while trying to find newways to gain new customers.SegmentationIn marketing the Starbucks Elite card, areas of the marketing segmentation must beidentified and evaluated for maximum exposure. The selection of the target market will becomprised of segmentation data collected based on demographic, geographic, psychographic,and behavioral characteristics. The nature of the business requires that all four major variables inthe segmentation of consumer markets be explored.Demographically, coffee is enjoyed by a countless number of individuals regardless ofgender, age, nationality, and race, therefore a wide range of offerings to this group must exist.With a goal of 20,000 stores outside the United States it is vital that the rewards program beintroduced to all international markets (Richman 2008). In a 2008 Time Magazine article by BillTancer, the author discussed the use of a marketing behavioral web site called Mosaic to
Starbucks Marketing Plan8determine the typical United States Starbucks consumer as “the Urban Commuter Family.” Thisconsumer is described by Mosaic as “college-educated households containing dual incomecouples.” The upwardly mobile individual who resides in the working through upper classsocietal structure is groups to be targeted with this promotion. Focusing on this multiplesegmentation marketing strategy will enhance the overall marketing mix and provide Starbuckswith a specified target market for maximization of advertising dollars.Starbucks enjoys a stronger than normal brand loyalty factor which is an essential aspectof the marketing decisions for the new card offering. These loyal and even occasional consumerswill be targeted in the segmentation by researching the benefits loyal customers are seeking;whether it is extra cash, Starbucks or other products, gifts, or services. In understanding theexisting loyal Starbucks customer’s willingness to pay a little extra for their specialty blend, thecompany will be able to reach new, while keeping true to existing customers.Differentiation and PositioningThrough introduction of a new product or service into the market, the strategy needs toidentify the points which differentiate the new product or service from the competition. Whiledifferentiating the new service, the strategy must also stress the positive aspects of the newoffering in relation to the competition. In addition to the high quality of specialty blendedbeverages, atmosphere, and excellent service, Starbucks will give customers added value overthe competition with the issuance of the new card offering.The place a product or service offering occupies in a consumer’s mind on importantattributes in relation to products presented by competitors is referred to as product positioning(Berkowitz, Hartley, Kerin, & Rudelius 2006). In this case, repositioning will be needed tochange the mindset of the consumer and how they feel about the offerings of the existing card.
Starbucks Marketing Plan9Perceptual maps will be developed to identify important attributes, evaluate existing brands, andrate the ideal brands within Starbucks and the competition. As a result of the maps, a brochurewill be developed and available at the point of sale (POS); along with direct mailing of newcards to the existing card members with the new card benefit information. The marketing teamfeels the added consumer value of the new offering and repositioning of the service will achievethe goals set forth by the company.Marketing MixDeveloping and reevaluating the success of the Starbucks Rewards Card will be acontinuous process. Statistics related to trends and sales should be reviewed every 90 to 180 daysto ensure the correct marketing mix for the Starbucks Elite card program is in line with salesforecast estimations.The type of product identified earlier is a revision of Starbucks existing Rewardsprogram. The new card and associated program for individual and corporate clients features acombination the incentive and gift card features which enable consumers to earn cash forpurchases or rewards