The final stage of the marketing audit is for you to evaluate how well the marketing mix of the organisation is performing for your chosen organisation. Referring to the chapters 7-14 of the text, and with the use of secondary research, please provide informed answers to the following questions:
1. Are there any products/services able to benefit from quality, feature and style improvements? If so, how?
2. Are there any new products worth adding?
3. What are the pricing objectives , policies, strategies and procedures? To what extent are prices set on sound cost, demand and competitive criteria.
4. What are the distribution objectives and strategies. How can these be improved?
5. What are the organisation’s promotional objectives and strategies? Are they sound?
6. How could the promotional budget be improved to get better results?
7. How could the use of the expanded marketing mix, as outlined in chapter 14 be used to improve the performance of the organisation?
Starbucks is a Coffee Company and was founded in the year 1971. It opened its first outlet in the Seattle's Pike Place Market. Starbucks was named after first mate within Herman Melville's Moby Dick and is world's principal retailer, roaster as well as brand of the specialty coffee. Having almost 17,000 outlets in 43 nations in the North America, Latin America, Europe, Pacific Rim and the Middle East, and above 172,000 staffs worldwide, Starbucks now is becoming a of respected brand throughout the world (Starbucks Coffee Company, 2015).
The firm started like a respected regional roaster as well as retailer of the whole bean plus the ground coffee, yet has expanded into some other locations of the market growth through many years. This study will analyze growth plans and strategies plus positioning plans that also have been utilized to develop Starbucks as a known brand. The proper analysis plus evaluations also are on the basis of knowledge gathered at the time of lectures as well as tutorial sessions and books plus journals and even research databases as well as internet research (Snyder, 2006).
1. Starbucks in Australia:
Here in Starbucks coffees are actually grown as well as sold in the Starbucks cafes within few of the similar nations all around the globe. With all its flavorful coffees as well as teas that are made from beans which are also grown frequently locally towards point of the sale, has had all of their hardship within many other nations. Initiating in the Seattle along with merely one outlet, it has even expanded internationally in merely 20 years. Along with the profile attained from the Italian coffee coinsures, as well as modeled after Italian market, the firm is currently a global firm. In merely a few nations this firm has failed towards delivering what rest of world has actually experienced (Allah Pitchay, n.d.). Considering the fact that the firm named Starbucks has actually failed in the Australian market towards delivering a proper and a very superior competitive coffee intended for its users. After trying the coffee at Starbucks, several Australians speedily found that the firm has actually failed to proffer a predominantly unique experience which also was never offered by any other chains otherwise cafés. Provided strong recognized coffee culture as well as discerning the palates of the Australians, core product - coffee – also was never seen like particularly dissimilar from, latte otherwise short black through a superior uptown barista (Cole, 2008).
In reality every market is different depending on place and culture, city, and even nation. What properly works for one culture might become a failure in the other. This is the reason why Starbucks has failed in the Australia. If the firm really wants to attain success in Australia, and also capture vast market share then they also need to be conventional to rituals of coffee drinkers, and also price range, as well as must try to offer something unique and different and dissimilar to what others provide than standard cup of the Joe which is also served in every other outlets in the market. Merely because the store of Starbucks has ambience which others do never provide, does never mean that the firm can charge extra for the same old goods and service. Using dissimilar products, and also through offering things that is never enormously unfamiliar, as well as allowing friendly atmosphere as always, would also go a very long way towards the success of the firm (Dickinson, 2002).
Flavorful and tasty coffees as well as teas, ambiance, plus also friendly service actually are what the firm Starbucks is really all about. For having a business which also exploits local economy through utilizing the localized beans as well as other products; towards supporting the ecological as well as “green” friendly trade practices, carrying a business silhouette plus staffs from the regional, can also go a very long path towards having proper success in international markets. Starbucks is a very big business ('Everything but the coffee: learning about America from Starbucks', 2010). Thus love for coffee and spending quality time with loved ones take people towards the outlet of the firm. Each and every culture is actually different from each other, and if culture is previously about heavy coffee consuming, then the offering of same forms of the coffees for some higher price merely because of environment and atmosphere; the firm will never be capable of attaining better market share and will not be able to go long in the business. Towards preventing the failure for the firms it needs to do a proper research and study the market appropriately.
2. Marketing Mix
Product is bundle of advantages which supplier actually offers to purchaser. Meticulous set of the benefits upon offer would also appeal towards specific cluster of the consumers: it also is tremendously unlikely that products would appeal to each and everyone. Even the product like Coca-Cola that is sold throughout the world as well as is world’s most familiar brand name even has merely a minority carve up of soft drinks marketplace. Several people merely don’t like it (Frey, 1956).
There are several goods and services that Starbucks offers to its customers. People visiting the store fell extra good and contended because of the excellence of the coffee and amazing ecology and atmosphere that the firm offers to all its visitors. Therefore the firm is good at serving something that is best for its users and what makes its customers extra happy and satisfied.
Decision that helps the firm to address novel product development procedure like innovation and proper management of the goods and services, licensing plans and strategies along with proper potential partners and also intellectual rights for property, services supplied to augment revenue stream through base products and also product name as well as brand decisions ,growth of the complementary goods by the partners, making of the industry standards and also packaging, as well as so forth, critical requirements is towards development of a proper stream of goods with right cluster of features towards satisfying the customer requirements in very compelling byt easy fashion (Glazer, 1989). In the firm Starbucks they also made merely their products towards satisfying needs of customer, as well as they have even made coffee along with finest coffee components of world. The dissimilar range of the coffee as well as snacks supplied by STARBUCKS also is mentioned below:
ESPRESSO- Coffee Latte, Vanilla Latte, Espresso, Cappuccino, Coffee Americano,
FAVOURITES OF COFFEE HOUSE - Coffee Mist, Caramel Hot, Classic Chocolate, Signature Chocolate, Freshly Brewed
FRAPPUCCINO- Java Chip, Cinnamon Dolce, Espresso, Caramel, Coffee
Price is actually the whole cost customers have to pay for the buying product. This therefore goes away from simple monetary price: customers even consider difficulty of buying, cost of the ownership of product, plus even ‘embarrassment’ element of owing some or other wrong brand. Few products also have psychological association that the customers feel costly.
Decisions which also establish the price points intended for Starbucks products, as well as address the issues regarding cost towards producing and also manufacturing good, margins through distribution channel and also competitor’s prices plus pricing virtual to very specific company market place and also customer value plus the total price of the ownership for customer (Halper, 2006).
Starbucks’s carries a product prices that are relatively higher as compared to others, as they also target people of the society who also provide preference upon the quantity. Generally price as well as quality recognizes value of product. Starbucks forever has tried to supply high value towards consumers through buying the quality beans and also assuring that all of its staff attain effective and also efficient training, as well as mostly, creating the ecology and environment that would aim towards people’s enjoyment while consuming coffee. For such a plan, Starbucks’s clients have to pay extra; it also is expensive (Kalnins & Stroock, 2011).
To attain competitive edge, firm must start offering something uynique and extra to customers inless price. The firm must try to supply something for general people instead of making the brand known only in higher earning segment.
Place is that location where exchange actually takes place and in case of service where the service is in reality supplied. This might be the retail store, a catalogue, and restaurant; otherwise it might also be a proper website. Deciding upon proper place for exchange also is never merely a subject of movie products around yet is rather the strategic issue. Decisions revolve all around making this very easy for the customers to search good as well as make purchase, and even using channels for distribution which would also give appropriate image intended for product (Koenen, 2005). In case of Starbucks its retail stores actually are typically situated within very high-traffic and also in high-visibility areas. Because firm can also vary size as well as format, the stores of the firm are actually located within otherwise near the variety of the settings, comprising of the downtown as well as suburban retail locations, office buildings as well as university campuses. Since the firm selectively locates all its stores within the shopping malls, Starbucks also focuses upon locations which also provide expedient access intended for pedestrians as well as drivers. The firm also locates all its retail stores within selected rural as well as off-highway areas towards serving a broader collection of users outside the chief metropolitan markets. Towards providing a better degree of admission and expediency for all the non-pedestrian patrons, firm has continued towards expanding the development of the drive-thru and the on road retail stores (Kotler, 1964).
Promotion is a large portion of the marketing which is frequently mistaken for whole of the marketing. This promotion also encompasses of all communication actions of the marketing: advertising and public relations, as well as sales promotions and also personal selling, plus so forth. Promotion at the Starbucks is not just a difficult sell rather is also a path of meeting the customers ‘data needs’. It is even, to some extent, persuasive within that mainly marketing communication prominence to the good characteristics of properly owning products as well as downplays bad aspects. Starbucks practically spends some £4.7 million each year towards the promotions. This also includes cost of the print media and the electronic media plus the indoor and also outdoor media and many more. The firm’s latest stunning strategy is Starbucks Card (Kotler, 2006). People buy the re-chargeable and reusable card within UK that can be utilized at the coffee bars within US, Canada and Australia as well as Thailand. Card would also enhance Starbucks knowledge for the customers permitting them to purchase their every day cup of the coffee quickly as well as easily, even when these people are never carrying the cash. Currently the firm through the agreement amid the Starbucks, as well as T-Mobile the have arouse with the way towards providing the internet access on the Starbucks area plus also high pace broadband intended for Starbucks consumers as well.
3. Products/services capable to benefit from the quality feature plus style improvements:
Actually every market also is different and dissimilar depending upon the place as well as culture, city, plus nation. What appropriately works for a particular culture might also become a vast failure in some other culture. This is the cause why the firm Starbucks has actually failed in Australia. The firm can try to provide better product to its customers. Australia is market where people love to consume coffee and thus there are several local well as international players in the market who provide pure coffee to the people in Australia. Starbucks failed in the market because it actually supplied the same coffee in higher price and as there exist many players people were not ready to pay extra for the same coffee (Lilien, 1986). Thus the firm must consider this as a serious fact and a sin for the firm and must try to develop some strategy intended to making of better coffee at lower price this can be done through achieving economies of scale. In the firm Starbucks they also made merely their products towards satisfying needs of customer, as well as they have even made coffee along with finest coffee components of world. The firm can try to emphasize on this fact and develop more and more on the basis of the same.
Novel products worth adding:
To be the premium product within coffee trade, the firm must aim on very high standards, and also try to introduce some really innovative and also novel products as well as must attempt to provide excellent and the best service mixed with some unforgettable experience and proper as well as very relaxing ambience. The firm’s good and product-mix can also get expanded through 8 vital elements of types of drinks as well as 7 food elements like Starbucks web towards keeping up with momentum as well as to gratify extra customer requirements (Lin, 2012). They also need to constantly introduce novel products, like four novels “VIA savored coffees” and should also try to attract all the tea drinkers through introducing some kind of Tea as well. Through recognizing and identifying the customer specific requirements the firm can attempt to introduce the nonfat milk to the products line which can make the customers feel better and this can also be targeted to children as well. They can also have some seasonal offerings like strawberry and cream in summer as well as gingerbread at the time of Christmas. Going somewhat beyond what they offer the Starbucks coffee as well as cappuccino makers intended for customer who also wish to buy them at the Starbucks store. To make sure that the brand richness all besides introducing the best elements as well as quality control, the firm even makes sure that all the staffs of the company are continuously involved as well as well aware about its total mission as well as objectives (Moran & Hunt, 2006).
4. Pricing objectives and policies plus strategies as well as procedures:
Generally the price as well as quality recognizes value of product. The firm Starbucks must try to deliver very higher value through using the quality beans, and also assuring that all of their staffs attain effective as well as efficient training, plus are mostly, creating the ecology to take pleasure in the coffee. Also for this, the firm Starbucks’s and its customer need to pay extra.
To maintain the proper competitive edge, the firm also has began to supply $1 bottomless cup of the coffee, that could be refilled several times as well as 50 cents also less than some other Starbucks goods. As Starbucks news site also sates, the firm is even trying to realize some value added services. This is towards targeting price minded customers (Patterson, Scott & Uncles, 2010).
In Australia, by regional standards, Starbucks also is a proper luxury brand. They also never liked to decrease any of their prices towards the Australian market when they initiated. Coffee also is never grown in the local areas of Australia at some large scale. While comparing the prices to the USA, it also varies amid the products supporting from where materials were actually obtained. The firm pricing objectives are as follows:
• To aim higher earning segment of the society
• To supply coffee in a good ambience and better ecology (Richter, 2002)
• To ensure that customers feel extra satisfied and contended with the coffee
• To make sure that the customers pay higher price for attainment of the coffee that is prepared from real coffee beans.
Distribution objectives plus strategies:
Roasting the whole coffee bean also is very close to the art form of Starbucks. The firm Starbucks presently operates numerous roasting as well as distribution facilities. Roasters also are promoted through within the firm and are also trained for several years, and this is even considered very honor towards being chosen. Coffee is also roasted in very influential gas-fired throb roaster for some 12 to 15 minutes by the time roasters utilize sight, aroma, hearing as well as computers towards judging when the beans are completely done (Shapiro, 1984). It undertakes a properly-run and well established supply chain towards ensuring that the barista pours very good cup for the Starbucks coffee. This is also because journey from the bean towards cup is very complicated one. The coffee as well as other goods must be also sourced through around the whole globe as well as then productively delivers to Starbucks firm’s 16,700 retail outlets, which also serve about 50 million users in 51 nations every week. After supply chain operations were rationalized, several departments twisted their concentration to second aim of supply chain alteration: reducing prices as well as improving the efficiencies. As portion of the effort, sourcing group also worked upon identifying cost drivers which were forcing up the prices.
5. What are firm’s promotional objectives plus strategies:
Their vital strategy actually is not towards spending money vastly upon advertising. In the year 2007 merely 16.6 million as compared to the McDonald’s which was 727.7 Million were spent. Instead, the firm also used extra cash upon acquiring best spots and locations. Before the opening of any new store, Starbucks even organized some big community advertisements and events which highlighted each and every locations and its personality like the Community service and also Starbucks web. Further all these information were also imprinted upon the mugs and the t-shirts like a pure promotion actions and activities (Sindhwani & Ahuja, 2014).
They even established some “smart partnerships” along with the already recognized regional representatives who also would act like a local ‘ambassadors’ towards promoting their brand and also vote for the firm.
They even introduced the Starbucks Cards; that also aimed their valued users and consumers to also promote all of its products. At the time of buying the gift card, customer never only shows the brand loyalty, yet it also supplies free advertising and also attracting novel customers. They even do deliver all of their services towards the offices without the size restrictions such as on the Starbucks web. Also expanding their total product mix, and enhancing their market they even ensure that the firm is properly appealing towards a diverse consumer base. Starbucks even contributes towards the non-profit firms as a path to improve the brand image as well as awareness in the local communities and societies (Srivastava, n.d.).
6. Ways to improve promotional budget towards attaining better results:
For revitalizing the total brand image as well as reputation, the firm Starbucks must properly implement many measures which would help the firm to attain better market share and thereby gain most profit. Firstly, the firm could franchise few of its stores for making the operations easy and smooth going. Franchising the shifts will decrease the financial risk through corporation towards an individual (Welsh, Raven & Alâ€Mutair, 1998). Thus a benefit of the Starbucks franchising will also be about opening hundreds of novel stores along with lower risk to firm, and also making profits while doing so. Additionally Starbucks also would have lower research as well as development and growth costs as the franchisee will also have some greater knowledge and experience of local or the regional market regarding the demographics and psychographics, geographic, as well as local pr even state otherwise country rules and regulations. The vast disadvantages of the franchising can be that Starbucks will have to give up some amount of the control and management over store, and way it actually operates.
7. Expanded marketing mix for improving performance of firm
Source: (Zhang, 2011)
The product, place, price and promotion are already described. Others are mentioned below:
Process- The firm can enhance its process through using all novel technologies and speed up the service time and also increase the pace of consuming coffee by the customers visiting the store.
People- The firm can try to target new customer group like children through supplying some new customized products for them and attracting them by new strategies (Wu & Liu, 2014).
Physical layout- The firm can be made more relaxing and people can be supplied with good coffee with lower price. Merely charging high price for good ambience has proved to be a sin for the firm. Thus Starbucks must try to develop new locations and better ambience at lower price so that the ultimate cost of final product can be lowered down (Younkins, n.d.).
Starbucks actually operates within a total business ecology which needs excellent and very good brand identity as well as reputation towards creation of the trust along with all its interior and exterior stakeholders. Such a reputation also has been forever built by firm over years via its stipulation of 'Starbucks Experience'. The firm is not a success in the Australian market and thus needs to revise its marketing mix and also develop a proper extended marketing mix for itself through which it becomes capable of serving better market and attain proper market share.
for the firm to stay on the top, needs to properly maintain all its innovative and efficient skills as well as continue offering and supplying new distinguished products and services and also, invest within its partners as well as in all its ethical morals and values towards improvement of the environment and ambience in the outlets and make it more comfortable for the users and visitors which would at last ensure extra rush in the outlet and better profit of the firm.
Allah Pitchay, A. Marketing Mix from Islamic Marketing Perspective. SSRN Journal. doi:10.2139/ssrn.2017488
Cole, G. (2008). Grande Expectations: a Year in the Life of Starbucks' Stock20081Karen Blumenthal. Grande Expectations: a Year in the Life of Starbucks' Stock . Loughton: Piatkus 2007. Management Decision, 46(4), 673-675. doi:10.1108/00251740810865120
Dickinson, G. (2002). Joe's rhetoric: Finding authenticity at starbucks. Rhetoric Society Quarterly, 32(4), 5-27. doi:10.1080/02773940209391238
Everything but the coffee: learning about America from Starbucks. (2010). Choice Reviews Online, 47(08), 47-4511-47-4511. doi:10.5860/choice.47-4511
Frey, A. (1956). The effective marketing mix. [Hanover, N.H.]: Amos Tuck School of Business Administration.
Glazer, R. (1989). Marketing and the changing information environment. Cambridge, MA: Marketing Science Institute.
Halper, A. (2006). Starbucks Wars: Chinese Courts Say â€œNo Hitch-Hiking Allowedâ€Â. The China Quarterly, 188(01), 1155. doi:10.1017/s0305741006000725
Kalnins, A., & Stroock, L. (2011). Pouring Israel into a Starbucks Cup. Cornell Hospitality Quarterly, 52(2), 135-143. doi:10.1177/1938965510395015
Koenen, J. (2005). A Starbucks State of Mind. Fourth Genre: Explorations In Nonfiction, 7(1), 139-142. doi:10.1353/fge.2005.0015
Kotler, P. (1964). Marketing Mix Decisions for New Products. Journal Of Marketing Research, 1(1), 43. doi:10.2307/3150319
Kotler, P. (2006). Marketing. Frenchs Forest, N.S.W.: Pearson Education Australia.
Lilien, G. (1986). Marketing mix analysis with Lotus 1-2-3. Palo Alto, CA: The Scientific Press.
Lin, E. (2012). Starbucks as the Third Place: Glimpses into Taiwan's Consumer Culture and Lifestyles. Journal Of International Consumer Marketing, 24(1-2), 119-128. doi:10.1080/08961530.2012.650142
Moran, M., & Hunt, B. (2006). Search engine marketing, Inc.. Upper Saddle River, NJ: IBM Press.
Patterson, P., Scott, J., & Uncles, M. (2010). How the local competition defeated a global brand: The case of Starbucks. Australasian Marketing Journal (AMJ), 18(1), 41-47. doi:10.1016/j.ausmj.2009.10.001
Richter, T. (2002). Marketing mix standardisation in international marketing. Frankfurt am Main: Peter Lang.
Shapiro, B. (1984). The marketing mix. Boston, Mass.: Distributed by the Pub. Division, Harvard Business School.
Sindhwani, P., & Ahuja, V. (2014). A Study of Online Co-Creation Strategies of Starbucks Using Netnography. International Journal Of Online Marketing, 4(1), 39-51. doi:10.4018/ijom.2014010104
Snyder, M. (2006). State of the Profession: The Starbucks Effect. Academe, 92(1), 70. doi:10.2307/40252902
Srivastava, R. Shift of Marketing Mix to E-Marketing Mix: The Birth to New Era. SSRN Journal. doi:10.2139/ssrn.1992936
Starbucks Coffee Company,. (2015). Starbucks Coffee Company. Retrieved 7 February 2015, from https://www.starbucks.in/
Welsh, D., Raven, P., & Alâ€ÂMutair, N. (1998). Starbucks International enters Kuwait. Journal Of Consumer Marketing, 15(2), 191-197. doi:10.1108/07363769810210386
Wu, C., & Liu, Y. (2014). Space Design in Starbucks from the Perspective of Behavioral Psychology. AMM, 638-640, 2298-2303. doi:10.4028/www.scientific.net/amm.638-640.2298
Younkins, A. Starbucks Case Tips the Scales: Changing California Law to Allow Supervisory Employees Their Fair Share of the Tips. SSRN Journal. doi:10.2139/ssrn.1415002
Zhang, X. (2011). Communicating Coffee Culture through the Big Screen: Starbucks in American Movies. Comparative American Studies, 9(1), 68-84. doi:10.1179/147757011x12983070064953