Starbucks marketing

CHARLES BONGRAIN - CAMILLE LESAGEFREDERIC MONTOIR – XXX XXX

STARBUCKS

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

I. HISTORY OF STARBUCKS II. STARBUCKS CUSTOMERSIII. STARBUCKS IN THE WORLDIV. SWOT ANALYSISV. MARKETING MIXVI. STARBUCKS IN KOREAVII.CONCLUSION

CONTENT

STARBUCKS NAME

MOBY DICK

BALDWIN – BOWKER – SIEGL

SEATTLE, 1971 - FIRST STARBUCKS

58 years old

Grew up poor

His father had a hard life

Excelled at sports and won an athletics scholarship

Graduated in Business & Marketing

Joined Starbucks Company in 1982 as Diector of Marketing

HOWARD SCHULTZ – CEO OF STARBUCKS

1983 he went on a trip in Milan:Coffee bars existed on

every street200.000 in the countryServed as meeting places

His idea: bring the Italian coffeehouse tradition back to the United States

The pilot coffee concept was successful but the owners refused to develop the concept

HOWARD SCHULTZ – VISION OF A CEO

1985: Started his own coffeehouse: Il Giornale Coffee

1987: purchased Starbucks Coffee (6 stores)

Renamed Il Giornale Coffee with the Starbucks name

Expended aggressively first across the United States and then around the world

HOWARD SCHULTZ – VISION OF A CEO

HOWARD SCHULTZ – HIS PHILOSOPHY

2008: regained his status as a CEO of Starbucks

Co-authored: “Pour Your Heart Into It”

“Starbucks may become another soulless big chain”

HOWARD SCHULTZ – HIS FEAR

2009: 616 US Starbucks Coffee closed1/3 of the headquarters employees were fired2000 jobs lost

TOO MANY STORES…TOO EXPENSIVE

2011 - STARBUCKS NEW LOGO

HOWARD SCHULTZ – THE NEW LOGO

STARBUCKS TODAY

15.000+ STORES

50 COUNTRIES

1st ROASTER AND RETAILER

18-45 year olds

Youngsters who want to gather with their friends

Office workers and students who need to catch up

with their work

Those who feel that drinking coffee is "cool"  

People who are adventurous, willing to try new things

TARGET

Egypt

South Africa

STARBUCKS IN AFRICA

2 / 52 - (4%)

EAST ASIA• China• Hong Kong• Macau• Japan• South Korea• Taiwan

SOUTH EAST ASIA• Indonesia• Malaysia• Philippines• Singapore• Thailand

STARBUCKS IN ASIA

NORTHEN ASIA• Russia

WESTERN ASIA• Armenia• Barhain• Cyprus• Jordan• Lebanon• Kuwait• Oman• Quatar• Saudi Arabia• Turkey• United Arab Emirates23 / 44 - (52%)

NORTH AMERICA (100%)• Canada• USA• Mexico• Puerto Rico

CENTRAL AMERICA (3/52 - 14%)• Aruba• Bahamas• El Salvador

• SOUTH AMERICA (4/10 - 40%)• Argentina• Brazil• Chile• Peru

STARBUCKS IN THE AMERICAS

• Austria

• Belgium

• Bulgaria

• Czech Republic

• Denmark

• France

• Germany

• Greece

• Hungary

STARBUCKS IN THE EUROPE

• Ireland

• Netherlands

• Poland

• Portugal

• Romania

• Spain

• Sweden

• Switzerland

• UK

18 / 37 – (49%)

Australia

New Zealand

STARBUCKS IN OCEANIA

2 / 9 – (22%)

AN ADAPTATION STRATEGY

Names are translated into local languages

• South Korea: 스타벅스 (transliteration: seutabeokseu)• Arabic-speaking countries: ستاربكس  (transliteration: stārbaks)• Bulgaria: Старбъкс (transliteration: Starbâks)

AN ADAPTATION STRATEGY

Adapting their products

•Different muffin flavours, different cheesecakes

AN ADAPTATION STRATEGY

Adapting to their markets

• Products launched in limited international markets.• Sold in supermarkets and convenience stores

STARBUCKS FAILURES

2003: Starbucks closed all six of its locations in Israel due to difficult business environment

2007: closed its store in Beijing's Forbidden City2008: closed 61 of its 84 stores in Australia:

Starbucks failed to truly understand Australia’s cafe culture.

STARBUCKS FAILURES – ONLINE PETITIONS

“The Forbidden City is a symbol of China’s cultural heritage. Starbucks is a symbol of lower middle class culture in the West. We need to embrace the world but we also need to preserve our cultural identity.There is a fine line between globalization and contamination. But please don’t interprete this as an act of nationalism. It is just about us Chinese people respecting ourselves. I actually like drinking Starbucks coffee. I am just against having one in the Forbidden City”.

Product diversificationEstablished logo, developed brand, copyrights,

trademarks, website and patentsCompany operated retail storesInternational presenceValued and motivated employees, good working

environment

STRENGHTS (1/2)

STRENGHTS (2/2)

Good relationships with suppliers

Industry market leaderCustomer loyaltyWide spread and consistentKnowledge basedStrong BoardTrendy brand imageStrong financial foundation

Lack of internal focus (too much focused on expansion)

Cross functional managementProduct pricing is high

WEAKNESSES

Competition (restaurants, street carts, supermarkets, other coffee shops, other caffeine based products)

Market saturationCoffee price volatility in developing countriesNegative publicity from poorly treated farmers in

supplying countries

THREATS (1/2)

THREATS (2/2)

Consumer trends toward more healthy ways and away from sweet coffee beverages and cakes

Cultural and Political issues in foreign countries

Expansion into retail operations

Technological advancesNew distribution

channels (delivery)New productsDistribution agreementsBrand extensionEmerging international

marketsContinued domestic

expansion/domination of segment

OPPORTUNITIES

• Espresso beverages Caffe latte, Caffe Mocha, Caramel

machiato… Iced caffe Latte, Iced vanilla Latte…

• Frapuccino Coffee base, cream base and tea base

• Coffee and tea Hot chocolate, soya milk, tea

• Food Cookies, muffins, salads, sandwiches, coffee

bags…• Equipment: mugs, coffee machines…

STARBUCK’S PRODUCT RANGE

DepthLenght

Width

PRICE

COMPARATIVE VALUES OF STARBUCKS’ CAFFE LATTE

Towns & countries Price of a tall caffe Latte (€ and won)

Price of lunch in the neighbourhood

Paris, France3,70€

5880 KRW14€

22240 KRW

Dubai, UAE2,85€

4530 KRW5,70€

9050 KRW

Seoul, South Korea

2,40€3800 KRW

3,15€5000 KRW

PLACE: A PLACE FOR AMBIENCE & EXPERIENCE

Warmth, Comfort, Diversity

A place of quiet contemplation

Some kind of neighbourhood office

A gathering place for neighbours and friends

PLACE: A PLACE FOR AMBIENCE & EXPERIENCE

Friendly baristas Customized

beverages

PROMOTION: ADVERTISING

STARBUCKS DOUBLE SHOT ESPRESSO

PROMOTION: ADVERTISING

STARBUCKS FRAPUCCIONO COFFEE DRINKStaring Michael Bublé

PROMOTION: PRODUCT PLACEMENT

STARBUCKS IN MOVIES

The devil wears Prada

PROMOTION: PRODUCT PLACEMENT

STARBUCKS IN MOVIES

Meet The Fockers 4

PROMOTION: PRODUCT PLACEMENT

STARBUCKS IN MOVIES

Fight Club

PROMOTION: DIRECT MARKETING

SNS

SNS

PROMOTION: COMMITMENT TO THE WORLD

Environmental

impact

Creating “Grounds for

your Garden” 

Using recycled materials:

ranked 15 on the

U.S. Environmental

Protection Agency’s list of

Top 25 Green Power

Partners 

PROMOTION: COMMITMENT TO THE WORLD

Fair trade

Largest buyer of Certified Fair Trade coffee in North

America (10% of the global market)

Starbucks has given the FTC label greater visibility,

helping to raise consumer awareness in the process.

Payes above market prices for all of its coffee

Opens farmer support centers in Africa

PROMOTION: COMMITMENT TO THE WORLD

PROMOTION: COMMITMENT TO THE WORLD

Ethos water

Ethos bottles feature prominent

labeling stating "helping

children get clean water”

$.05 from each $1.80 bottle sold is

used to fund clean water projects

in under-developed areas.

Sales have raised over $6,200,000

PROMOTION: COMMITMENT TO THE WORLD

Product (red)

Raise awareness and funds to help eliminate AIDS in

Africa.

Starbucks’ Red products and Red card:

PROMOTION: COMMITMENT TO THE WORLD

Helping countries after natural disasters

STARBUCKS IN KOREA

Starbucks entered the Korean market in 1999

DUNKIN DONUTS

AMERICAN COMPANY

THE COFFEE BEAN AND TEA LEAF

AMERICAN COMPANY

CAFFEE PASCUCCI

ITALIAN COMPANY

CAFFE BENE

KOREAN COMPANY

ANGEL-IN-US COFFEE

KOREAN COMPANY

SEVEN MONKEYS COFFEE

KOREAN COMPANY

EDIYA COFFEE

KOREAN COMPANY

HOLLYS COFFEE

KOREAN COMPANY

TOM N TOM COFFEE

KOREAN COMPANY

NUMBER OF STORES IN KOREA

Caffebene Ediya Angel-in-us Starbucks0

100

200

300

400

500

600

PRICE COMPARAISONS

Size(ml) Americano Caffe Latte Caffe Mocha or mocha latte

Starbucks

Short(237) 2800 3300 3800Tall(335) 3300 3800 4300

Grande(473) 3800 4300 4800

Coffee bean Small(335) 4000 4500 5000

Regular(473) 4500 5000 5500

Angel-in-us Small(335) 3300 3800 4500

Regular(473) 3800 4300 5000

Caffebene 4000 4500 5000Pascucci Short(260) 3800 4000 4500

Seven monkeys Regular 3500 4000 4500

Ediya Regular 2500 2800 3000

Hollys Small(335) 3200 3700 4200

Regular(473) 3700 4200 4700

Dunkin donuts Small(300) 2000 2500 2500

Tom n toms Tall(335) 3300 3800 4100

Large(473) 3700 4100 4600

PRICE COMPARAISONS

Prices per 100ml (won)

Americano Caffe latte Caffe mocha

Pascucci 1461.54 1538.46 1730.77

Coffee bean 951.37 1057.08 1162.79

Starbucks 803.38 909.09 1014.80

Angel-in-us 803.38 909.09 1057.08

Tom n Toms 782.24 866.81 972.52

Hollys 782.24 887.95 993.66

Dunkin Donuts 666.67 833.33 833.33

Number of stores 529 339

Sales(million won)

102,256 242,133

Net profit (million wons)

11,225(14.8%) 16,853(9.3%)

Management 100% Direct

mgmtMostly franchise

MenuFocus on bever-

ageFocus on dessert

CAFFE BENE AND STARBUCKS’S STRATEGIES

Global company

Howard Schultz: Geocentric Orientation

Adaptation Strategy

Globally Successful

Future Oriented

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

STARBUCKS TODAY

THANK

YOU