Case The Coffee Shop Market Starbucks Marketing Essay

Case The Coffee Shop Market Starbucks Marketing Essay Starbucks Corporation is an international coffeehouse chain, founded in 1971 in Seattle, Washington. Starbucks serves a variety of beverages including brewed coffee, tea, hot chocolate, espresso and a selection of bottled drinks. Starbucks also sells whole bean coffee and a variety of ready-to-eat snacks. The first Starbucks location to open outside of North America was in Tokyo in 1996; and from then on Starbucks became an international brand, expanding both nationally and globally. This report will attempt to examine the situation of Starbucks in Japan. It will bring out the marketing strategy to be adopted for a rise in profitability of Starbucks Japan in the next two years. In addition, it will attempt to explain the use of marketing mix to aid the chosen strategy. SWOT ANALYSIS: 1.1 STRENGTHS: 1.1.1 Strong brand image: Starbucks brand name, quality customer service and store ambience are its key strengths. It has maintained its international operations to ensure consumer recogn ition. Starbucks is renowned for its high quality products and has maintained a consistently positive consumer experience that has helped Starbucks build a strong brand image. Starbucks spends less than 1% of revenue on advertising and promotion each year which indicates they rely on an established company image (P. Ghauri, International marketing case study: Starbucks-Going Global Fast). Starbuck’s key competitor in Japan-Doutor coffee, had taken advantage of Starbuck’s brand image and copied its logo, while replicating the experience rendered to customers in its retail outlets. (Ono, 2003). This shows that the Starbucks image is a strength worth mimicking. With a well-established brand image in America, it was sure to expect recognition in the Japanese market, because the consumers there have a fondness for everything western. (http://azjatycka.wordpress.com/2009/11/05/international-marketing-strategy-of-starbucks-in-japan-success-or-a-failure/) 1.1.2 Commitment to c ommunity: Starbucks contributes a considerable amount of its resources to corporate social responsibility programs (Kotabe & Helsen, 2004). According to Butler (2006)-â€Å"CSR programs influence 70% of all consumer purchasing decisions, with many investors and employees also being swayed in their choice of companies†. As a result, Starbucks involvement in the CSR programs helps its competitiveness in the business world. 1.1.3 Widespread Presence in International Markets: Starbucks has ventured into foreign markets with astonishing pace opening its outlets in 40 countries with 2068 stores worldwide. This widespread expansion has allowed its presence to be felt across the globe. 1.1.4 Retail outlets present at convenient and accessible locations: Starbucks has opened a number of coffee shops at convenient locations like shopping malls, libraries, university campuses, office buildings etc. They are typically located in high traffic, high visibility locations.(Starbucks annual r eport, 2008) 1.1.5 Presence of a variety of food items & Beverages in addition to Coffee: Starbucks stores offer a choice of regular and decaffeinated coffee beverages, a broad selection of Italian-style espresso beverages, cold blended beverages, iced shaken refreshment beverages and a selection of premium teas. Starbucks stores also offer a variety of fresh food items, including healthier choice selections focussing on high-quality ingredients, nutritional value and great flavour. 1.1.6 Well Developed Corporate Strategy and Good Marketing skills. Weaknesses: 1.2.1 Lack of internal focus: Starbucks focuses too much on over-expansion, at times tending to ignore the problems arising within–consistent employer dissatisfaction.