Marketing Plan: Starbucks

Marketing Plan: Starbucks

A business with a marketing strategy or plan eases the sales for any business owner and helps to come out on top with a competitive advantage. Implementing a good marketing plan is the core sales and profits driver; without it, a business cannot make enough money to sustain the business long-term. It is a good marketing plan that enables Starbucks to stay afloat amidst significant competitors like Dunkin’ Doughnuts, Barista Coffee, and McDonald’s. Starbucks was started in the 1970s by Bowker and Baldwin. Their inspiration to sell whole coffee beans came from a Dutch immigrant who was a significant entrepreneur in coffee roasting (Garthwaite et al., 2017). In the 1980s, more stores were opened in Seattle, standing out for their finest quality beans. Schultz was employed later as the head of marketing. When he wanted to change their marketing strategy to a better one, Bowker and Baldwin were hesitant to change their traditional outlook (Garthwaite et al., 2017). They finally sold Starbucks and Schultz made it what it is today- the biggest coffee house in the world.

Starbucks Target Audience

In the initial stages, Starbuck’s focus was on women and men aged between twenty-five and forty. It was meant to create a fun space between the workplace and home where customers could have a relaxing experience. These are majorly individuals with developed careers and high income and makeup approximately half of their consumers. It is a target audience with consistent growth of 3% annually. Since the scope is not a particular gender, the company has a competitive advantage. As time progressed, Starbucks has positioned itself as a place where college students could have study sessions, write their term papers, meet people, and hang out. This population has consisted mainly of young adults aged between eighteen and twenty-four (Jang & Jung, 2013). This audience has been targeted mostly through the introduction of innovative ideas and technology. This technology is delved into social networking to create an active “cool” image and capture the young minds’ attention. This target market grows at 4.6% annually.

Technology and innovation are the current trends, and a business needs to tap into that to stay relevant. Starbucks has focused on boosting customer relations, experience, and loyalty through innovation. It has a program to ensure consistent customer bearing and increased efficiency in operations. Individuals can cater to their bills with loyalty cards as well as mobile payments. This has resulted in reduced use of credit cards, hence a hugely rewarding experience for the coffee consumers. Most of the production part is human-managed but entirely done through the application of technology while at the same time, orders execution has been improved.

Current Opportunities for Starbucks

All Starbucks ‘ target audiences are linked by a couple of similar characteristics, including high-income groups, environmental consciousness, and social status cognition. This way, Starbucks has leveraged on this by changing its traditional pastries. It decided to bring in baked products from La Boulange in San Fransisco. Customer relation has dramatically improved as well as their experience; thus, an additional point to gain an advantage over competitors such as McDonald’s. Starbucks also coupled with Nestle to develop the At- Home Cofee case. Apart from Nestle, Starbucks will be able to have branded goods packaged and produced by Nestle under the Dolce Gusto and Nespresso systems (Nambalirwa Kawuma & Marcovecchio, 2017). Their marriage is a tremendous opportunity growth for the Global Cofee Alliance (GCA), as these two companies work tirelessly and together to expand the novel markets.

Future Opportunities for Starbucks

While food is a significant part of what Starbucks has to offer, it is a beverage that differentiates them. This sharp focus is what has led to the dramatic increase in in-store sales from 1% in 2018’s third quarter to 7% in 2019’s third-quarter (Ferreira et al., 2018). With the drastic growth of cold-brewed coffee on the rise with expected sales of 1.63 billion dollars in 2025, Starbucks is not about to let the opportunity slide. The company is planning to introduce more with its latest introduction being the Irish Cream Cold Brew and plans to phase out Nitro cold brew.

Starbucks also continues to bank in digital initiatives. The company has plans underway to launch a virtual store in china to grow its coffee industry. It will partner with the Alibaba Group, and this strategic partnership will ensure a more seamless digital experience with Starbucks. In addition to this partnership, another alliance with Ele.me- China’s leading platform of on-demand food delivery with close to three million registered drivers, to ensure a world-class experience in delivery to the market. It is estimated to reach two thousand stores across thirty different cities in China. It will be followed by Starbucks pilot initiatives in both Miami and Tokyo with Uber Eats (Ferreira et al., 2018).

Current and Future Starbucks Threats

Despite the company’s loyal and broad customer relations, any food and beverage (especially coffee) is a force to reckon. New entrants are always a challenge for Starbucks because it does not have many substitutes. McDonald’s, as an example, other gourmet coffee shops alternative and quick service cafes threaten the market share of the company. Another threat is Starbuck’s high-end product price volatility. The coffee produced by Starbucks is a product of expensive coffee beans, the Arabica type, and not the easily affordable Robusta. Arabica coffee beans prices are highly unstable; hence, posing a considerable threat to the corporation. McDonald’s is pushing for its less expensive McCafe, which will automatically give Starbucks a run for its money.

Conclusively, a good marketing plan will only be as good as the cooperation’s understanding of their targeted audiences. Implementing a good marketing strategy ensures that there are increased sales and consequently, higher profits. To stay on top of significant competitors like McDonald’s, Starbucks has a challenge to better invest in a good marketing plan. When a business smartly targets its ideal customers, there are reduced marketing costs, but increased chances of leads convert to sales…