Analyze the marketing strategy of Starbucks
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A marketing strategy is a long-term plan for achieving a company's goals by understanding the needs of customers and creating a distinct and sustainable competitive advantage. It includes understanding the environment the business operates in, customers, competitors, laws, and regulations plus planning a marketing strategy to build a successful business. A marketing strategy entails segmenting the market, deciding on which customer to target and what message the targeted customers should associate with the brand. With a marketing strategy, an organization can define how it wants to position itself in the marketplace, the types of products it produces, the strategic partners it makes, and the type of advertising and promotion it undertakes. This report used secondary research to examine the marketing strategy of Starbucks and how it has contributed to its success. The company's internal and external environment were analyzed in order to understand how they affect the company's marketing strategy. Its segmentation, targeting, and positioning strategy were also analyzed. According to the findings, Starbucks has been able to achieve its dominance without using much traditional advertising. The company has focused on investing in improving its customers' experience, something that has boosted buzz around the brand and boosted word-of-mouth marketing. Starbucks' marketing strategy case study discussed and offered deeper insights into the company's strategy and how it has given it a competitive edge in the competitive market.
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Group Project 1 (50 Points): Market Research (2500 words)
You will pick a company and you are expected to complete the following steps.
Company Analysis
- Discuss the mission, history, and growth of the company.
- Perform a SWOT analysis for the company.
- Discuss the segmentation, targeting, and positioning strategy used by this company.
- Identify at least two trends in the macroenvironment for this company.
Key Learning Outcomes
By the end of this exam assignment, students should be able to:
- Understand the role of a mission statement in the strategy formulation of an organization
- Perform SWOT analysis and understand how internal and external factors can influence a company's marketing strategy.
- Understand marketing and the key elements of a successful marketing strategy
- Understand the key metrics measured in examining a company's growth
INTRODUCTION
Founded in 1971 in Seattle, Washinton by Jerry Baldwin, Gordon Bowker, and Zev Siegl, Starbucks is a global coffeehouse chain and coffee company based in the United States. In 1987, employee Howard Schulz bought the company and began its rapid expansion. It is this global expansion that enabled Starbucks to nearly double its number of locations over the past decade. As of 2022, Starbucks had 35.7 thousand stores worldwide making it the world’s largest coffeehouse chain, connecting with millions of customers every day in more than 80 markets.
The company has through the years experienced tremendous growth and made lots of transformations. Its menu has expanded, and cold coffee drinks that often include add-ons now account for 60% of orders year-round. Rather than going to the counter, today, more customers are going through the drive-thru or using its mobile app.
The company has invested in technology in order to increase its competitive advantage in the increasingly competitive market. The company has planned to roll out Automated ordering, a move that is meant to give employees more time to interact with customers and relieve them of the more mundane parts of the job (Lucas 2022). A quarter of Starbucks transactions now come from mobile app orders, driven by the company’s loyalty program. To keep growing its base of loyal customers, Starbucks has extended its loyalty program technology to licensed cafes, which include locations in airports and retailers like Barnes & Noble. Roughly 20% of its roughly 7,000 U.S. licensed stores are using the technology already.
Globally, Starbucks anticipates approaching 45,000 stores by the end of 2025 and is already on track to reach at least 55,000 stores by 2030. Driven by priority investments that boost store efficiency, industry-leading digital programs, an engaged and growing Rewards membership base, product innovation, and a rapidly expanding global footprint, Starbucks has forecast its global revenue growth from 10% to 12% annually between 2023 and 2025.
In its fiscal year ending in September 2022, Starbucks spent$ 416.7 million on advertising, an increase in global advertising investments compared to 2021 when it spent $305 million on promoting its products and services. On a global scale, in 2022 the Starbucks brand was valued at 45.7 billion U.S. dollars (Statista 2023).
Despite the increased spending on marketing, the coffee giant is still way behind its major competitors when it comes to marketing spend. However, the coffee chain enjoys a healthy score on the American customer satisfaction index. In fact, it is the perfect example of how important word-of-mouth marketing is. Starbucks has been able to achieve its dominance without using much traditional advertising.
Using secondary research, the report discusses the marketing strategy of Starbucks by assessing the segmentation, targeting, and positioning strategy used by this company. The company's internal and external environmental factors are also assessed to see how they affect Starbucks' marketing strategy.
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