a) You should ‘propose’ items such as macro and micro environmental factors, targeting strategy, positioning, buyer behavior and segmentation criteria from your own original ideas and explain the reasoning behind the decisions.
In the present context marketing plan for Starbucks company can be considered wherein macro and micro environmental forces along with STP strategy of the organization would be presented in order to understand the reasons behind decision making process.
Macro environmental factors Starbucks
§ Political & legal: Legal and political factors concerning Starbucks would be related to the import of coffee beans from African countries and any legal of political change in these countries would affect the overall business for Starbucks.
§ Economic: Economic factors such as inflation would reduce the spending power for consumers. Starbucks need to reduce the employee cost by adopting the flexible workplace policies (Peter & Donnely, 2007).
§ Environmental and social: Starbucks does not only offer a cup of coffee for the customers but also provide the pleasant environment wherein customers can interact with each others.
§ Technological: Technology is helping consumers to book their order online and information is provided by Starbucks through online mediums.
Micro environmental factors at StarbucksCOMMUNICATING IN HEALTH AND SOCIAL CARE ORGANISATIONS
SWOT analysis can be carried out in order to understand the internal environment in the organization and can be given as under:
§ Strength: Starbucks is one of the most popular brand in the coffee segment and have huge customer base which is loyal to the products and services offered by the organization.
§ Weakness: Starbucks is facing stiff competition and due to this it is losing its customer base as several branded and non branded players have come to market so as to offer their products and services to consumers.
§ Opportunities: Opportunities faced by Starbucks are in terms of the global expansion and added number of food categories depending upon the customer need assessment towards the newly developed food categories.
§ Threats: Some of the key threats faced by Starbucks to their present strategy would include stiff competition in the marketplace, threat from alternative drinks and brand dilution due to offering multiple food categories.
Hence micro and macro environmental factors in organizational context to Starbucks are shaping the overall situation faced by the organization (Gupta & Lehmann, 2012).
Segmentation, targeting, positioning and consumer behavior for Starbucks can be given as under:
§ Segmentation: Starbucks target the consumers which are looking for premium coffee and pleasant store environment to spend quality time with their friends and family.
§ Targeting: Starbucks is targeting high end consumers having high spending income, visiting Starbucks for official meeting and having high spending income and lies in age range of 18 years to 35 years.
§ Positioning: Starbucks has premium pricing wherein company look for high end consumers requiring pleasant environment and space for spending quality time.
§ Consumer behavior: Consumers who are brand loyal to Starbucks choose it over other brands as they are loyal customers. Further consumers of Starbucks are not price sensitive.
b) You should also prepare a competitor analysis and fully explain all aspects of the extended marketing mix like distribution, pricing, promotional activity, as applied to the selected product or service or range of products or services
Marketing mix elements for Starbucks have been designed keeping in mind the consumer requirement for the particular products & services. Further marketing mix elements of Starbucks are such that they offer attractive product proposition to consumers so that consumers are attracted towards them in comparison to other brands dealing into same product segment.
Product offered by Starbucks mainly consist of several variants of Coffee but now a day Starbucks has started maintaining portfolio of food products which is sold along with coffee. The wide variety of food products have been selected keeping in mind consumer requirement for the food products. In terms of pricing Starbucks charges very high pricing wherein only high end consumers are targeted by the company by charging very high prices for its food products as compared to the prices charged by other coffee brands (Homburg et al, 2012). Place of offering product for Starbucks is mainly the physical stores but Starbucks is also offering home delivery for the online or telephonic orders placed by the consumers. This is helping the organization to expand its business model and provide competitive strength to Starbucks in comparison to other organizations.
Promotional activities adopted by Starbucks in order to promote their brand includes the integrated marketing campaign designed for Starbucks wherein company makes use of the different means for promotion such as the online marketing campaign, social media, outdoor media and broadband medium for promoting their products. Further Starbucks makes use of the personal selling tools in order to tie up with the bigger organizations and sponsorship is used by the organization as Starbucks tries to collaborate with several sports brand in order to improve their positioning.
a) Marketing mix for two different segments
In the present context two different market segments named A & B can be considered for Starbucks. Segment A consumers would lie in range of 19 years to 29 years and having educational qualification graduate to post graduate while these consumers are having low to moderate spending power. Consumer B segment consist of mature consumers in age range of 20 years to 45 years, generally married and looking for pleasant experience through coffee shop wherein they can spend time with their friends and family. Marketing mix for segment A and Segment B can be given as under:
§ Product: Coffee, tea and CD would be major offering for segment-A consumers and company should look at expanding the food categories as per their taste. Segment B consumers would be looking for traditional coffee with high quality and spending time with their loved ones.
§ Price: Pricing used for Segment A consumers would be moderate and these consumers would be sensitive to price and may shift with change in price. Segment B consumers would be having high income range and would be ineffective for price change (Gregson, 2008).
§ Place: Segment A consumers would prefer purchasing from physical stores as well as online ordering system. Segment B consumers would be mostly looking for in store experience hence these consumers should be offered experience of coffee store only.
§ Promotion: Promotion for segment ‘A’ consumers can be done through sponsorship, social media and tie up in colleges etc. Promotion in Segment B consumers can be done through personal selling, tie up with college or universities and broadband media.
b) Marketing products and services to businesses rather than customers
Marketing of products and services to the business users and retail consumers would be completely different in nature. Example of McDonald’s can be taken in order to understand the different in marketing products and service to the consumers and businesses. In terms of product there is possibility that McDonald would offer gamut of products to the businesses while to the individual customers there would be unique product offering made (Chambell et al, 2002). In terms of distribution business customers would be distributed through their premises or delivery to consumers while in case of retail consumers’ service or product would be consumed at original business place. Pricing for business consumers would be discounted due to bulk buying while for individual consumers pricing would be premium in nature. In terms of promotion, businesses would be targeted through advertisement made in business magazines and personal selling tools while individual customers can be targeted through mass media advertisement and outdoor promotion etc.
c) How and why international marketing differs from domestic marketing
Considering the case of Starbucks it can be said that international marketing is highly important as North America which is the home only count for 20% of the overall sales for Starbucks. International marketing issues faced for Starbucks would be highly different as compared to the domestic issues. Starbucks would face issues such as marketing channels, cultural issues and joint venture while advertising for the international marketing of their products. Domestic marketing would be easy for Starbucks as it is one of the reputed brands in domestic market and this offers competitive advantage for the organization while in new markets consumer may or may not be aware of the Starbucks brand (Kent, 2013). Competition faced in the international market would be highly competitive as compared to the competition which is faced in the domestic environment. Further in terms of the external environmental forces international marketing offers key challenges for any organization as compared to the internal or domestic marketing. Unit-15 ON-LICENSED TRADE MANAGEMENT
Homburg, C; Sabine K, Harley K (2012): Marketing Management - A Contemporary Perspective (1st ed.), London.
Gupta, S, Lehmann, D, 2012, Managing Customers as Investments: The Strategic Value of Customers in the Long Run, pages 70-77 (“Customer Retention” section). Upper Saddle River, NJ: Pearson Education/Wharton School Publishing. ISBN 0-13-142895-0
Peter P. & Donnely J. (2007) Marketing Management Knowledge Londong: 8th edition
Chambell D, Stonehouse G and Houston B, (2002) Business strategy: an introduction, 2nd edition, page 134
Kent B., 2013, The Pricing Strategy Audit, Cambridge Strategy Publications, p.41 ISBN 978-0-273-64938-0
Gregson, A, 2008, Pricing Strategies for Small Business. Self Counsel Press ISBN 978-1-55180-979-3