Product diversification, company’s logo, operating with retail stores, customer based loyalty, well-built financial basis are the strengths of Starbucks. As far as weaknesses of the company is concerned, it includes lack of internal concentration, enlarge number of competitors, expensive pricing strategies. Likewise, Starbucks expansion into retail markets, agreements with new distribution channels in international markets and development of new products are the opportunities faced by the company. On the other hand, stiff competition, changing trends of customers and cultural and political issues are severe threats to the business of the company.
Porters Five Forces
Starbuck is experiencing real threat of substitutions from its competitors. The same has been observed in the global as well as domestic market. The company is also facing the issue of rivalry in the context of its competitive price strategy. The company has been deciding not to deal with the suppliers who are not following the same business strategies and ethics as Starbucks. Due to this, the company is facing a real threat to lose its suppliers. write my assignment
Starbucks was critics by various NGO’s urging the company to obtain the certified coffee beans only restricted by certain political and social conditions. Further, in the period of economic recession, company faced a severe decline in the revenue margins. The company is found to be continuous searches on technological development for finding the ways to satisfy customers. WI-FI technology has been introduced in every outlet. The company has been diversifying its operations to capture different segments of the society.
Thus, from the above analysis of Starbucks, it could be observed that the marketing conditions are severely affecting the business of the company. The political and social issues are putting negative implications on the business.
Marketing Strategy for Starbucks
Segmentation: Since the inception of the Starbucks, the marketing strategy of the company has focused on few principles including providing quality cup of coffee ensuring customer satisfaction with relaxing environment and creating brand identity through innovative marketing (Pham-Gia, 2009 ). The proposed segmentation for the Starbucks must divide the customers by their gender, income level and interest. The reason to propose the three-level segmentation for Starbucks is that taste of consumers can vary in gender, while identifying the customers by their income level can help the company to achieve its marketing objectives (Ferrell& Hartline, 2008). In addition, the interest of the customer can be important to recognize because Starbucks must target the customers who have greater interest in the coffee and they often like to drink coffee.
Target: With special consideration of market expansion, Starbucks must reconsider its target market such as Starbucks should not just focus on the well-educated, white-collar pattern and affluent customers between 25 to 44 years, to expand the market, company should focus on the customers between 14 and 24 (Kotler& Keller., 2008). Applying new market strategy for youngsters, the company can expand the market as younger, less educated with lower income is one of the biggest market (Lamb et al., 2008).
Positioning: Over years, Starbucks has positioned itself as premium quality coffee in the market by creating high standards and bringing creativity in the products and consumer services. In order to expand the market, the company must consider positioning its products not only as the first choice of the potential customers but also create loyal customers (Terrill& Middlebrooks, 2000).
Marketing Mix for Starbucks
Products: In order to target the youngsters between 14 and 24 years, Starbucks should need to bring innovation through variety in its products. It is found that consumers between 15 and 25 years are likely to change their lifestyle with the new trend, such as trend to live healthy life has affected the coffee consumers and coffee consumers prefer to drink fresh water and juices rather than coffee. To persuade the target customers, Starbucks must be innovative and should consider the health factor in its market campaign.
Price: The price of the product can have immense effect on the marketing campaign of the Starbucks because the amount of money buyer pays for the products he relates the paid price with the quality of products (Kotler& Keller., 2008). Since price and quality are closely related and price can play important role in the determination of value of the products, therefore, Starbucks should not compromise over the matter of product value in the eyes of the consumers (Lamb et al., 2008). However, when Starbucks was launched it was very expensive and it is not being suggested to adopt same high price strategy but to have moderate pricing strategy.
Place: Over years, Starbucks have adopted smart marketing strategy and from the distribution point of view, the company has always selected most visible locations. To become more visible and innovative, Starbucks must consider the diversification of locations because over years, many competitors are getting into same location idea to distribute their products.
Promotion: However, Starbucks has been promoting through innovative marketing strategy such as organizing community events and offering especial offers in seasonal events (Kotler& Keller., 2008). Since, there are numbers of competitors in the market and many of them are using somewhat similar marketing strategy for promotion, if company does not choose innovative and differentiation in the marketing strategy, its marketing plan can fail. Therefore, Starbucks should access the customer directly at their places such as workplace, university and colleges and promote the products.