Starbucks Marketing Plan
Current Situation
“Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in more than 50 countries,” (Starbucks Corporation).
Starbucks currently holds approximately 33% of the U.S. coffee market share (O’Farrell), with net revenues in 2011 of $11.7 billion (Starbucks Corporation). In addition to the U.S. market share, Starbucks ended 2011 with over 17,000 stores in 55 countries globally, with another 800 planned for 2012 (Starbucks Corporation). Starbucks has also focused on expanding its portfolio of products, all to expand market share.
Competitor and Issues Analysis
Starbucks continues to face growing competition in the coffee market, both in the U.S. and globally. Competitors such as McDonald’s have recently introduced “gourmet,” coffee shop style offerings to their product mix. Some competitors have effectively targeted customers looking for “lower-priced” and “on –the-go” options, made available by drive thru services. One element favoring Starbucks over competitors is its ability to be “flexible when it comes to its store size and layout” (Misonzhnik). This allows Starbucks to alter each individual store based on location, and to expand in to alternate territories such as grocery stores, rest stops, and so on.
Marketing Objectives
Moving forward, Starbucks is going to attempt to tell the company’s story through various marketing campaigns through various outlets including advertising, in store campaigns, social media, etc.
Marketing Strategy (4 P’s)
Product: While coffee remains the core product and focus of Starbucks, the introduction of various new products has expanded the Starbucks product portfolio. For example, the acquisition of Tazo Tea has allowed Starbucks to provide new offerings such as tea-only stores (Blessing). Also, as part of the marketing campaign, Starbucks is making a push for its store employees to provide customer with exceptional customer service. For example, part of the campaign is highlighting Starbucks willingness to remake a drink for a customer if it is not satisfactory. This will ensure that Starbucks is always putting the best product forward.
Pricing: Starbucks has always offered a range of products that vary in price. With the economy slowing starting to gain momentum, Starbucks’ main objective must be to keep prices on par with competitors. In addition, a market opportunity presented itself during the recession – at home coffee drinkers. In order to capitalize on this market segment, Starbucks must price there at home coffee selections closely to competitors such as Dunkin’ Donuts, while also balancing economic factors such as distribution costs, fair-market costs, and more.
Promotion: Starbucks will continue to adopt new promotional outlets in order to reach consumers. An active participation on Web 2.0 platforms, televisions advertisements, and email marketing will all be utilized to promote products and initiatives. Initiating contests for customers to participate in will be a main focus. These can range from coffee bag design contests, to social media contests integrating platforms such as Instagram and Twitter. One more promotional opportunity that will be utilized is participation in “Daily Deal” sites such as Groupon and LivingSocial, in order to associate the Starbucks brand with affordable deals.
Placement: The traditional methods of distribution will continue to operate the placement of Starbucks products to its’ consumers. One area which shall be investigated further is how to better penetrate alternate retail outlets such as grocery stores, in order to attract the market of at home coffee drinkers. Also, other potential sites for warehouses shall be scouted and considered in order to anticipate for potential growth.
Action Programs
-Initiate television ad campaign for new product launches
-Initiate coffee bag design contest
-Organize free in store tastings for new products
-Develop “Daily Deal” site offering that will require email list registration
Budget
In order to compete with the large marketing budgets of competitors, Starbucks will increase its marketing budget from $94.4 million (Morrison) to $150 million. If this increase yields significant results, then more funding could be proposed in future years.
Measurements
To measure the success of various campaigns, Starbucks will engage in metrics analysis tools to monitor lead generation, customer engagement, and sales curated. For online campaigns, Starbucks will implement the use of highly rated, industry-standard metrics monitoring software as well as a Customer Relationship Management database to effectively manage all Starbucks customers and leads. To track the ROI of in-store and offline marketing efforts, Starbucks will monitor and analyze sales results during specific campaign time frames. For example, during the free in store tasting days, Starbucks will monitor and analyze store traffic and sales trends, including referencing criteria such as geography in results.