Starbucks IMC Journey: Crafting A Coffee Culture Revolution

Your task is the following:

Work for this assignment must be conducted individually and its preparation and planning must commence early.  Each student needs to identify a real organization and product to promote. You must then prepare a Marketing Communications Plan for that organization.  

Depending on the company you choose, you may have access to extensive information such as the company’s marketing strategy through the company website and, possibly, annual reports and accounts. You may need to make assumptions, but these should be based on full and sensible analysis of existing material such as advertising campaigns, case studies, journal articles and other media coverage.

Integrated Marketing Communication (IMC) is stated to be a effortless concept. It guarantees that all structures of messages and communication are carefully associated together. In the most basic level of IMC, it is about incorporating of the promotional tools for them to work in synchronization. All these tools of communication would be working better if they are being allowed to work together in harmony rather than being in seclusion. Integrated Marketing Communication takes in lot of efforts in delivering certain benefits. It can generate competitive benefit, boosting sales along with profits while saving money and stress. IMC wraps the process of communication around the customers helping them in moving through the several stages of the process of buying (Williams, 2015). The organization concurrently merges its image, improving a dialogue and nurturing its relationship with the customers. This paper would be dealing with the IMC plan of Starbucks in the Canadian market, a world famous coffee organization that was created in the year 1971.

Starbucks was recognized in the year 1971 with presently having locations globally. The first of its store was released in the Washington State at the Seattle’s Pike Place Market. Since its inauguration, Starbucks has developed over 17,000 stores existing within more than 50 countries on global basis. Starbucks ventured into the Canadian market in the year 1987, with its first store being in Vancouver, British Columbia. In Canada only, Starbucks exists in 940 locations. Starbucks have been an organization that takes pride in providing the best quality products to its consumers and is highly committed towards corporate social responsibility (CSR) and conservation of environment. The mission of Starbucks has been in inspiring and nurturing of the human spirit- one person, one cup and one neighborhood at a particular time. Starbucks is apparent as a company producing high quality coffee comparative to its competitors in the Canadian coffee industry. Starbucks at present do not have an Integrated marketing Plan (IMC).

For Starbucks to productively contend in the coffee industry of Canada, they need to augment the marketing communication. The IMC plan would be suggesting several methods for increasing the communication process. As per Kelley, Sheehan & Jugenheimer, (2015), this plan would be digging in the marketing objectives for addressing the issues of Starbucks that is currently being faced by the organization. In broader sense, the main objective of IMC plan would be in penetrating in the coffee market of Canada. The key goal that needs to be attained for accomplishment of these objectives is to reinstate the prominent brand image of Starbucks.

IMC Objectives

The number of Starbucks consumer needs to be increased as they have only been able to attract 7 per cent of the Canadian coffee market. The goal would be to augment the customer base to 10 per cent. This can be attained within a period of one year through the efforts in promoting the Starbucks Rewards Program. According to Cornelissen, & Cornelissen, (2017), promotions of the loyalty card agendas are significant to the consumers of Canada, so the second objective would be to attain 20 per cent expansion of membership foundations, increasing the existing user association by 15 per cent through accomplishment of a new Green Card.

It is also important to promote dominance of the Starbucks brand where consumer knowledge needs to be increased for the benefits generally offered by Starbucks like their ‘secret menu’. Though this IMC plan Starbucks would be looking for an increase in the consumer loyalty that would in turn increase the revenue of sales by 6 per cent. For achieving a reinstate of dependable and clear brand image, it is significant in delivering a strong message, another main objective of this IMC plan.

Coffee has been a mainstay in Canada with Starbucks supplying the demand of every customer for fashionable coffee and sweet-roll. The average Canadian household generally uses ground coffee 4.2 cups per day. Overall that is around 280.5 million cups of coffee that is being consumed at home by the Canadians. 14 per cent of the Canadian adults visit Starbucks.

The segmentation of psychographic divides the market into groups of customers as per their lifestyles. It determines the sway on the purchase behavior, taking in the expectations, attitudes and customers activities. Discovery of such attributes would customize the marketing campaigns to motivate the customer. For instance, the pattern of lifestyle and behavior of consumer might change through the several life stages. Opinions of customers, environmental views and the cultural ideas have a bigger influence on the merchandise that is being bought, such as the requirement for the organic foods and yielding on the environment (Kelley, Sheehan & Jugenheimer, 2015). It has been seen that Starbucks comprises of consumers who possess a college grade having advanced incomes. The main focus of Starbucks is only on one group; the gourmet coffee drinker and developing its products for keeping that division concerned.  

A data-driven method along with a disciplined approach for opening of stores has depicted certain different results over the period of two years. According to Howard Schultz, the CEO of Starbucks stated that the stores that were opened in 2011 and 2012 gave some of the best sales in sales in company history. Starbucks have started using the technology of GIS and data. For the behavior of consumers, it is the consumers who choose a particular brand that has generally based on emotion, functionality and association. The brand functionality is significant to consumers, but they also choose a scrupulous brand as customers can communicate their personality or social category (Ang, 2014). The loyal customers do not have much problem in paying premium price without great information about the substitute brands. Starbucks requires its customers to be more concerned in its products and it does this in several ways: a) Starbucks is generally marketed as a class item, having more economic and social risk than any off brand or less expensive coffee from McDonalds; b) The company makes use of number of campaigns like providing of new products, or coffee flavors. This is a positive utilize of the customer behavior theory predicting customers might change the habits of buying for trying out something new.

Market Segmentation

The primary customers of Starbucks comprises of men and women who are aged ranging from 25 to 40 who are generally trendy, fashionable and willing to shielding out a few extra dollars for the sphere drink. The specialty coffee drinkers’ mainly accounts for 75 per cent sales of Starbucks. Using this data, the organization generated a fun, and seasonal campaign that targets superlative customers through the ads and the presence of social media. As an alternative of trying in converting the conventional coffee drinkers into the specialty coffee drinkers, Starbucks mainly focused on the target audience of its, and it worked wonderfully well (Abrahams, 2014).

At Starbucks, customers are purchasing expensive products having high quality, but they also possess modified in-store understanding enhanced by the employees that are trained, assisting Starbucks in obtaining a premium status for their brand and fighting competition. The unique selling proposition (USP) assists Starbucks in differentiating their products along with the services for gaining the competitive advantage over the competition. Starbucks is generally known for their good customer service along with the in-store practice for their customers either spending some time at shop or benefiting from the friendly environment and Wi-Fi. The USP concept is significant in a world that is fast moving where technology is becoming more modified, where the social interactions are decreasing.

A message needs to be developed that converses to the consumers and makes an impression that is everlasting. The total and primary message campaign is for promotion of the premium status that is generally being offered from a Starbucks purchase, along with emphasizing certain benefits that the brand has to offer through the rewards cardholder relationship and contributions of seasons (Newman, 2016). One of the main underline would be “Life is Better in Green” as one of the main campaigns of Starbucks in aligning with their objectives in re-establishing the company as one of the prominent company trademark of coffee. According to Williams, (2015), not only the brand would be promoted, but also the promotion and augmentation of the awareness of the green card, significantly increasing allegiance and fortify existing consumer support. Moreover, new customers would be introduced who generally is a part of the target market but might lack any knowledge about the perks and the reward schemes that the customers would be offered through a purchase of Starbucks product. Existence of slogans like “It is not just coffee, Its Starbucks” highlights the dominance of the brand and facilitating the customers to experience the superior quality along with them becoming elite part of Starbucks consumers. This slogan would be helping in raising the customer status, as certain coffee drinkers buy Starbucks for the exclusive experience it offers. The overall campaign communication that the organization would endeavor in delivering not only the premium coffee offered by Starbucks to its customers, but also the Starbucks consumers are esteemed and should be satisfied for their purchases and brand loyalty (Keller & Brexendorf, 2016).

Targeting Strategy

Several advertisements have been created in creating a desire for Starbucks and helping in advertising of seasonal drinks. Advertisements positions “”Frappuccino season is here to stay” that would be helping in attracting the customers and augment the purchase. The main target would be with sensitive appeals while making sure that the consumer is entirely occupied with the advertisement, such as making drinks appealing- fresh, colorful and cold for summer along with consoling and warm for winter (Landaeta Olivo et al., 2016). The main focus would be on the cooler colors for the promotions of summer that makes the consumers feel soporific and bring in enough calmness. For winters it would be more of warm colors for making the consumers more excited. The advertisements would also be addressing on the ‘Secret Menu’ that Starbucks provides to maneuver consumers about the options of the menu that Starbucks has accessible (Cadwallader, Atwong & Lebard, 2013).

A new feature would be implemented for the rewards scheme- the extensive Green Card. This card would be the decisive level in attaining in the program and a considerable amount of food and beverages would require to be bought for awarding membership. It would need 300 stars to achieve the green status within a period of one year. A $25 credit towards the customer can be redeemed for every 100 stars achieved. This card is mainly being attained for the best loyal and die-hard fans of Starbucks. This would be a significant addition to the gold program that is fairly easy to attain and the company wants to appoint their existing customers by gratifying them for their incessant loyalty through the regular purchase (Ang, 2014). For retaining the existing customers of Starbucks, there is a general feeling that the launch of the Green Card would facilitate them in having an in-depth relationship with the brand.

A proper planning needs to be strategized by Starbucks through the traditional, internet and digital media in going through with its integrated marketing communication plan. It needs to plan the different medias, their scheduling and the timing of it so that it serves the purpose of the program of Starbucks IMC.

For targeting the desired target market of Starbucks magazine advertisements would be used as one of the communication standard. Canadians of all ages read magazines in Canada making it an efficient medium. In Canada, the readership stays high even in 65 and the category of older age. In Canada, the subscription of magazine is very high, with 89 per cent making use of subscription instead of newsstands.

Positioning Strategy

The various advertisements of magazines would be communicating various objectives of marketing to the target market. The first would be an influential advertisement encouraging consumers in joining the programs of reward and becoming a gold cardholder. This would assist in augmenting the loyalty of the accessible customers. Reminder advertisements would be used proceeding to each season in promoting seasonal beverages of Starbucks and any connected in-store promotions. The third advertisement needs to be informative and would be promoting the Secret Menu at Starbucks. This advertisement’s main purpose is expressing the customers one of the Starbucks’ benefits and the reasons of it being a superior brand.

These advertisements would generally be printed in three diverse magazines within the span of eight months. In Canada, the three main segments of magazines are business magazines, women’s magazines and general interest magazines. For this marketing map, one magazine from each segment would be used in reaching the target addressees. In Women’s section, it would be Cosmopolitan Magazine, a women’s lifestyle and fashion journal where majority of the women readers are in the age group of 18-34 (Blakeman, 2014). Among them 70 per cent of the readers are employed that fits suitably the mould of young professionals that Starbucks needs to attract. For business magazine it would be Financial Post Business magazine where the readers include both male and female category having median age of 45 (Wirtz & Lovelock, 2016). This magazine would take in higher age cohort in Starbucks target marketplace. The general interest magazine would be People magazine having an adult circulation of 125,100 comprising of 70 per cent women and 30nper cent men. This is a good audience for targeting as they desire in attaining the status and prestige through the use of such products.

The second intermediate would be direct mail. Postcards would be send to all the accessible rewards members through the Canadian Post service of direct mail. The mailing would be used for increasing the membership for the Starbucks Reward Program. The direct mailings would comprise of a coupon motivating the members in bringing a non-member into the location of Starbucks for registering and becoming a part of the reward scheme (Bibby, 2015).. The main goal of this marketing approach is to augment activations of membership of the Rewards Programs. The goal would be to avail this promotion to 1,80,000 existing members that is 20 per cent of the existing membership of rewards program. Invitations for direct mailing would be dispersed to all the present rewards program in Canada in June, and RSVPs in July.

The Green Card would be commenced at the end of the planned IMC plan of 2017, after the rewards have been promoted in the other marketing mediums. For promotion of the green card, the launch parties would be held in three major cities- Montreal, Vancouver and Toronto. These cities have been chosen as the host based on their bigger population. This social event would extensively be for the rewards members only which would be in line with the total objective of marketing of reinstating the brand image of Starbucks and preserving loyalty (Orazi et al. 2017).

2017: Starting off with the IMC Plan: 

Source: (Kelley, Sheehan & Jugenheimer, 2015)

2018: Continuing with it: 

Source: (Newman, 2016)

The overall cost of the IMC campaign of Starbucks is $9,558,560. The budget’s majority is mainly allocated to magazine advertisements with the remaining being billed to direct mail and the initiation of the Green card. Full-page advertisements would be positioned in the three above mentioned magazines with 8 monthly issues at a velocity for the first two magazines and 16 biweekly issues.

The creative team of Starbucks would be designing the campaign and material for promotion for the advertisements of magazines and the coupons of direct mail, so there would be no extra cost for outsourcing. The mailing cost coupons are based on business rate on Post Canada of $0.43 per item. The cost of mailing would be $ 387,000 as there is existence of 9, 00,000 Starbucks rewards members in Canada.

Starbucks Advertising Budget:

MAGAZINES
Cosmopolitan Magazine	Per Issue	Total	Rate Base	Circulation (Canada)
Advertisement Full page (8 monthly issues)	$297,740	$2,381,920	3,000,000	274,000
Financial Post Magazine
Full page advertisement	$20,480	$163,840	980,000	158,000
People Magazine
Full page advertisement (16 weekly issues)	$381,300	$6,100,800	3,475,000
Sub-total		$8,646,560
Direct mail
Starbucks 2-for-1 Member Referral Coupons	Per Item	Total
Cost of Mailing (900,000)	$.43	$387,000
Green Card	Per Location	Total
Launch party (3 locations)
Montreal, Vancouver, Toronto
Cost of Mailing (900,000 invitation)		$387,000
Venue (2500 capacity)	$20,000	$60,000
Free Drinks (1 per customer)	$5000	$15,000
Starbucks cost based on 60 per cent margin= 5*.4= $2/ drink
Local Baristas (150 employees)	$20,000	$60,000
Promo material	$1000	$3000
Subtotal		$525,000
	Total		9,558,560

This IMC plan that is being proposed is efficient as it determines the weaknesses, threats and prospects of Starbucks and their product. Starbucks has been a all-star brand, though their popularity in Canada is not the most hyped one, and this plan is to focus on the ways of changing it. Starbucks presently focuses on the social media that does not necessarily reproduce their target market; this medium of communication stated in the plan would be capable of doing the same, allowing to focus on the target audience. This IMC plan would be able to retain the competitive advantage that Starbucks has lately inhibited from which is the brand status and prestige.

One method of evaluation can be thorough investigation of the number of schedule Starbucks reward cards that is followed by the fresh rewards program member establishment. The augmentation in the registered members would be increasing the consumer loyalty that would take care of the sales. This can be scrutinized by the amount of Direct mail provisions are exchanged once a new rewards member gets registered. Investigating the sales is another medium of tracking success of the communications in marketing through specific monitoring of the probable increases during the regular provisions. Along with that would be the follow-up surveys through e-mail would be distributed to the fresh reward members in enquiring about the ways they came to know about the rewards program.

Conclusion:

It can be concluded that the IMC plan of Starbucks would only better its prospect in the Canadian coffee segment. The way it is popular in America and some other parts of the world, the same has not been the case in Canada. This IMC plan is intended in changing this fact where Starbucks would be using this communication plan for improving the prospect of the company in the Canadian soil. A budget has been set for the overall process which needs to be followed strictly so that everything stays in process and is attained as per the schedule set previously. The consumers would find these factors interesting that might be able to attract more of the coffee drinkers.

Reference:

Abrahams, F. (2014). Starbucks Doesn’t Sell Hot Cross Buns. Promising Practices in 21st Century Music Teacher Education, 41.

Ang, L. (2014). Principles of integrated marketing communications. Cambridge University Press.

Bibby, D. N. (2015). The Role of Brand Identity in the Implementation of Integrated Marketing Communications (IMC) by Advertising Agencies(Doctoral dissertation, Auckland University of Technology).

Blakeman, R. (2014). Integrated marketing communication: creative strategy from idea to implementation. Rowman & Littlefield.

Cadwallader, S., Atwong, C., & Lebard, A. (2013). Proposing community-based learning in the marketing curriculum. Marketing Education Review, 23(2), 137-150.

Cornelissen, J., & Cornelissen, J. P. (2017). Corporate communication: A guide to theory and practice. Sage.

Keller, K. L., & Brexendorf, T. O. (2016). Strategic Brand Management Process. Handbuch Markenführung, 1-22.

Kelley, L., Sheehan, K., & Jugenheimer, D. W. (2015). Advertising media planning: a brand management approach. Routledge.

Landaeta Olivo, J. F., Landaeta Olivo, J. F., García Guzmán, J., García Guzmán, J., Colomo-Palacios, R., Colomo-Palacios, R., ... & Stantchev, V. (2016). IT innovation strategy: managing the implementation communication and its generated knowledge through the use of an ICT tool. Journal of Knowledge Management, 20(3), 512-533.

Newman, A. (2016). Communication Planning: A Template for Organizational Change.

Orazi, D. C., Orazi, D. C., Spry, A., Spry, A., Theilacker, M. N., Theilacker, M. N., ... & Vredenburg, J. (2017). A multi-stakeholder IMC framework for networked brand identity. European Journal of Marketing, 51(3), 551-571.

Signori, P., & Confente, I. (2014). Consumer’s e-signals Prism analysis: impact and implications for corporate communication strategy. Sinergie Italian Journal of Management, 175-191.

Williams, J. A. (2015). An IMC Plan for Leaf & Bean Coffee Co. Jandoli School of Journalism and Mass Communication, St. Bonaventure University.

Wirtz, J., & Lovelock, C. (2016). Service Marketing Communications. In SERVICES MARKETING: People Technology Strategy (pp. 236-287).