INTERNATIONAL MARKETING

Case Study PresentationGroup members

Tariq YousafSana Munir

Midhat BatoolIrfan zafar

Atif TalalBilal Zafar

COMSATS Institute Of Information Technology, Islamabad

Presented To : Sir Talat Kiyani

STARBUCKS

Starbucks is a dominant multinational coffeehouse chain based in the United States. Starbucks is the largest coffeehouse company in the world,

with 7,521 company-owned and 5,647 licensed stores in 40 countries, making a total of 13,168 stores worldwide. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks and items such as mugs and coffee beans.

Agenda

1. Controllable & Uncontrollable elements

2. Risks and their solutions

3. Corporate Strategy

4. Improving Profitability in Japan

Controllable Elements

Starbucks Card for example, the Company has created the opportunity to improve customer service, shorten lines and make a customer’s visit at Starbucks quicker and more convenient.

People socialize, read, study, or just enjoy the music while Drinking their coffee.

Modifying Coffee shops to make their stores unique that will create an appealing atmosphere.

They focus on having plenty of comfortable seating so that people feel welcome to stay longer than they might have planned.

Technological development Placement

Successful in advertising on a local level rather than to the nation as a whole. The Company advertises through print mediums, as Starbucks’ target market tends to be educated people

Research developments of new and exciting products like

4-cup thermal coffeemaker ‘DoubleShot’ Espresso

beverage Starbucks Card is a

wonderful convenience tool for customers that can serve as great gifts, and reduces time spent at the cash register.

Advertising Research & Development

1. In normal price variation, the demand for coffee is price inelastic. when coffee prices show increases, consumers reduce their consumption.

2. Net revenues increased from $1.3 billion in fiscal 1998 to $1.7 billion in fiscal 1999, due to Company’s store expansion program

3. Experienced certain level of cannibalization of existing stores by new stores as store concentration has increased

Uncontrollable Elements

Economic Factors

Made outline of the company’s willingness to make sure that its affect on the environment is as positive as possible. These principles are stated as:

1. Understanding of environmental issues 2. Developing innovative solutions to bring about

change. 3. Striving to buy, sell and use environmentally

friendly products. 4. Recognizing that responsibility towards our

environmental future. 5. Instilling environmental responsibility as a

corporate value. 6. Measuring and monitoring our progress for each

project. 7. Encouraging all partners to share in our

mission.

Sociological factors

People ages 15-64 make up the largest percentage of the population, and will have greater control of the market. This implies that the most important target market for Starbucks are people within this age group.

2 largest ethnic groups in the U.S. are white 83.5% and black 12.4. The ethnic background is important to a company because it influences tastes, trends, perceptions, values and beliefs of an individual

per capita purchasing power parity of $36,200 suggests that Americans can buy specialty coffee drinks from an expensive, quality-intensive organization such as Starbucks.

An inflation rate in consumer prices in the year 2000 of 3.4% is a high inflation rate. There would be recession, it could be expected that consumers would spend less on premium luxury items such as Starbuck’s coffee.

Demographic Factors

1.Companies challenging the status of Starbucks California store managers and assistant managers as exempt employees under California wage and hour laws 2.Threats could include a change in import laws. A change in the status quo as far as imports go could greatly affect numerous areas of production for the company

Legal Issues

Risks & Solutions

Risk :

Market

Threat

Solution

Starbucks must push to be the first mover.

Innovate new products to stay ahead of such competitive tactics.

Should become alert towards competitive market

McDonalds entered into a coffee agreement with Diedrich Coffee, Starbucks could respond by acquiring Diedrich Coffee. subsidiary that specializes in catering to the food service industry.

Risk :

Depends on

overseas

growth to

maintain

annual 20%

revenue growth

Solution:

Heavy marketing campaign to draw customers from Churchill’s.

Another option could be to use Starbucks incredible purchasing power to acquire Churchill’s.

Risk:

offering

only

one product

Solution:

The company could demonstrate Product Market Diversification through research

Environmental changes and make sure to entice as many people as possible into their stores. For example, Starbucks could start line children’s fruit drinks and “yummy” milkshakes which would help bring families into the store.

Corporate Strategy

Starbucks corporate strategy establish itself as the premier purveyor of the finest coffee in the world.

The firm principles of the company are its maintenance of a proven work environment for every staff member in its retail stores.

It upholds diversity and promises Starbucks persists to be profitable and it is.

Starbucks Corporation purchases and roasts high quality whole bean coffees and sells them, along with fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, and a line of premium teas, primarily through its Company-operated retail stores.

In addition to sales through its Company-operated retail stores, Starbucks sells coffee and tea products through other channels of distribution

Starbucks, through its joint venture partnerships, also produces and sells bottled Frappuccino coffee drink and a line of premium ice creams.

The Company's objective is to establish Starbucks as the most recognized and

respected brand in the world.

Improving Profitability in Japan

Starbuck’s improve profitability in Japan by the following ways:

Encouraging domestic competition and greatly expanding the market for coffee chains

Introducing a dynamic decision-making style and corporate governance policies

Focusing on job creation and staff retention through stock options and by promoting a Japanese-style “family” atmosphere

Finding a partner with similar corporate values and complementary strengths, and helping it grow much faster

Adding a unique dimension to the local coffee culture by offering a nonsmoking environment

CONCLUSION

AND

RECOMMENDATION

QUESTIONS ???

Thank You