The Starbucks Brand Audit

International Brand Audit


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1. Executive Summary

2. Global Presence

3. History of the Brand

4. Brand Strategy

5. Sub-brands

6.Target Segments

7. Brand Positioning

8.Product Development

9. Packaging

10.Distribution

11.Pricing

12. Marketing Communication

13.Brand Awareness

14. Brand Image

15. Brand Equity

16. Sources

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2. Global Presence


4. Brand Strategy

5. Sub-brands

6.Target Segments


8.Product Development

9. Packaging

10.Distribution

11.Pricing


13.Brand Awareness

14. Brand Image

15. Brand Equity

16. Sources

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BEST GLOBAL BRANDS

Brand

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2009 Rank

2008 Rank

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100 New*indicates brands that did not appear in the previous year's top 100 ranking

BEST GLOBAL BRANDS

Sector

United States Beverages 68,734 3%United States Computer Services 60,211 2%

United States Computer Software 56,647 -4%

United States Diversified 47,777 -10%

Finland Consumer Electronics 34,864 -3%

United States Restaurants 32,275 4%

United States Internet Services 31,980 25%

Japan Automotive 31,330 -8%

United States Computer Hardware 30,636 -2%

United States Media 28,447 -3%

United States Computer Hardware 24,096 2%

Germany Automotive 23,867 -7%

United States Personal Care 22,841 4%

United States Computer Services 22,030 3%


France Luxury 21,120 -2%

United States Tobacco 19,010 -11%


Republic of K Consumer Electronics 17,518 -1%


Sweden Apparel 15,375 11%

United States Financial Services 14,971 -32%

United States Beverages 13,706 3%

Country of Origin

2009 Brand Value ($m)

Change in Brand Value

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United States Computer Software 13,699 -1%

Switzerland Beverages 13,317 2%

United States Sporting Goods 13,179 4%

Germany Computer Software 12,106 -1%

Sweden Home Furnishings 12,004 10%

Japan Consumer Electronics 11,953 -12%

United States Alcohol 11,833 3%

United States Transportation 11,594 -8%

United Kingd Financial Services 10,510 -20%

Japan Computer Hardware 10,441 -4%

United States Food 10,428 7%

United States Computer Hardware 10,291 -12%




Japan Consumer Electronics 9,210 5%

Canada Media 8,434 1%

Italy Luxury 8,182 -1%

Netherlands Diversified 8,121 -2%

United States Internet Services 7,858 22%

France Personal Care 7,748 3%

United States Computer Services 7,710 -3%

United States Internet Services 7,350 -8%

Germany Diversified 7,308 -8%


United States Automotive 7,005 -11%

Spain Apparel 6,789 14%



France Financial Services 6,525 -7%

United States Media 6,523 -9%




Switzerland Food 6,319 13%

France Luxury 6,040 -5%

France Food 5,960 10%

United States Restaurants 5,722 3%

Germany Sporting Goods 5,397 6%

Canada Consumer Electronics 5,138 7%

United States Internet Services 5,111 -7%


United States Diversified 5,004 -5%

United States Personal Care 4,917 -7%

Switzerland Luxury 4,609 -7%

Republic of K Automotive 4,604 -5%

France Luxury 4,598 1%

United States Personal Care 4,404 -5%

Switzerland Financial Services 4,370 -50%

United States Automotive 4,337 -43%


Japan Consumer Electronics 4,225 -1%

United States Luxury 4,000 -5%

Switzerland Luxury 3,968 -6%

United States Apparel 3,922 -10%

United States Restaurants 3,876 -5%


Germany Financial Services 3,831 -5%

France Alcohol 3,754 -5%

United Kingd Energy 3,716 -5%

United Kingd Alcohol 3,698 3%

United States Consumer Electronics 3,563 -3%

Germany Personal Care 3,557 5%


Italy Automotive 3,527 0%


United States Restaurants 3,263 -16%

France FMCG 3,235 New

Netherlands Energy 3,228 -7%

United States Restaurants 3,223 New*


United States Computer Software 3,161 New


Germany Sporting Goods 3,154 New

United Kingd Luxury 3,095 New*

United States Luxury 3,094 New*

United States FMCG 3,081 New*indicates brands that did not appear in the previous year's top 100 ranking

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STARBUCKS

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STARBUCKS

1. Please select one global brand from the provided list.2. Complete an audit of this brand by following steps in this template.

Instructions

1. Please select one global brand from the provided list.2. Complete an audit of this brand by following steps in this template.

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Executive Summary:The Starbucks story is a fascinating story that begins with its humble beginnings in 1970's as a local retail store focused solely on selling coffee and coffee equipment. It wasn’t until 1987 when Howard Schultz, the present Chairman and CEO of Starbucks acquired the company. The sparked a complete change in the philosopy and perspective of the business that remains intact today.

Since the beginning Starbucks was established by an ambitios entrepreneur fixed on reinventing the status quo. Starbucks has grown to be over a $9 billion business with 16,000 stores in 50 countries. Since inception it has remained financially successful due to its exceptional ability to grow and expand into new markets.

However, this rapid growth and expansion has affected its overall brand. Starbucks has established a well recognized brand globally. It has leveraged its brand to accomplish its expansion strategy. In recent years, Starbucks has experienced a lot of criticism concerning its business practices and therefore has had to rescue its brand image. Today, Starbucks is working hard on its brand strategy and developing ways to stregthen its brand awareness, image and gain back equity. With this effort, will position its iconic brand to maintain its leadership position in the coffee industry. The following brand audit will uncover the technical challenges Starbucks must overcome and and detail the implications of a suffering brand.


Executive Summary:The Starbucks story is a fascinating story that begins with its humble beginnings in 1970's as a local retail store focused solely on selling coffee and coffee equipment. It wasn’t until 1987 when Howard Schultz, the present Chairman and CEO of Starbucks acquired the company. The sparked a complete change in the philosopy and perspective of the business that remains intact today.

Since the beginning Starbucks was established by an ambitios entrepreneur fixed on reinventing the status quo. Starbucks has grown to be over a $9 billion business with 16,000 stores in 50 countries. Since inception it has remained financially successful due to its exceptional ability to grow and expand into new markets.

However, this rapid growth and expansion has affected its overall brand. Starbucks has established a well recognized brand globally. It has leveraged its brand to accomplish its expansion strategy. In recent years, Starbucks has experienced a lot of criticism concerning its business practices and therefore has had to rescue its brand image. Today, Starbucks is working hard on its brand strategy and developing ways to stregthen its brand awareness, image and gain back equity. With this effort, will position its iconic brand to maintain its leadership position in the coffee industry. The following brand audit will uncover the technical challenges Starbucks must overcome and and detail the implications of a suffering brand.

1. Executive Summary Menu

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Global Presence: The Starbucks business model and iconic brand is well positioned to remain a leader in the coffee industry. As Starbucks expands into new markets it has remained true to its original philosophy and continued to develop its brand. Today, Starbucks operates 16,000 locations in 50 countries. The company plans to develop partners in and other parts of the world such as Russia and India while maintaining a mirror image of its US operations.

China, for example has become a fascinating story for Starbucks. The first store opened in 1999. Today, there is close to 500 stores in China. Starbucks market research reveals that there are about 200 million young people of 1.3B in China interested in western and iconic products. Starbucks has realized that offering amenities such as WIFI, digital music, TV will enhance the experience. Starbucks is working on maintaining a long term presence in China with an enduring brand.

As Starbucks continues to expand globally it has become under pressure to become a responsible global citizen. For example, since 2000, consumers have been demanding that Starbucks offer Fair Trade coffee. The movement is aimed at supporting small farmers forced to sell coffee at ridiculously low prices. It is estimated that coffee growers only sell about 20% of their coffee at Fair Trade prices. In response, Starbucks now offers Fair Trade coffee at it stores. Starbucks also helps sustain coffee farmers and stregthen their communities by investing in loan programs for coffee-growing communities.

Another such program is the Starbucks Foundation that fosters several initiatives aimed to supporting the community such as the Ethos Water campaign. Every time someone buys a bottle of Ethos® Water, 5 cents is contributed to the Ethos® Water Fund. The fund provides financial assistance to areas that suffer from lack of water or poor water quality. Starbucks hopes that these global initiatives and programs will silence recent criticism and increasing the value of its brand.

2. Global Presence









2. Global Presence Menu

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In 1983, just two years after joing the company Howard Schultz presented an idea to the owners of Starbucks to enhance the coffee experience by offering a warm welcoming place to enjoy coffee. The idea was sprung when the company sent him to Milan, Italy, to attend an international housewares show. Having experienced first-hand how the "baristas" in Italy made their coffee led to a revelation that this could be a valuable concept in the US. He was primarly impressed with the coffee house atmosphere in Italy and intrigued by the comfort and familiarity of the barista with its customers. Most importantly he observed how most espresso bars function as an integral community gathering place. Each one had its own unique character, but they all had a barista who performed with flair and exhibited a camaraderie with the customers.

Consequently, Schultz immediately recognized that Starbucks needed to serve fresh-brewed coffee, espresso, and cappuccino in its stores (in addition to beans and coffee equipment). Going to Starbucks should be an experience, a special treat; the stores should be a place to meet friends and visit. Re-creating the Italian coffee-bar culture in the United States could be Starbucks' differentiating factor.


In 1983, just two years after joing the company Howard Schultz presented an idea to the owners of Starbucks to enhance the coffee experience by offering a warm welcoming place to enjoy coffee. The idea was sprung when the company sent him to Milan, Italy, to attend an international housewares show. Having experienced first-hand how the "baristas" in Italy made their coffee led to a revelation that this could be a valuable concept in the US. He was primarly impressed with the coffee house atmosphere in Italy and intrigued by the comfort and familiarity of the barista with its customers. Most importantly he observed how most espresso bars function as an integral community gathering place. Each one had its own unique character, but they all had a barista who performed with flair and exhibited a camaraderie with the customers.

Consequently, Schultz immediately recognized that Starbucks needed to serve fresh-brewed coffee, espresso, and cappuccino in its stores (in addition to beans and coffee equipment). Going to Starbucks should be an experience, a special treat; the stores should be a place to meet friends and visit. Re-creating the Italian coffee-bar culture in the United States could be Starbucks' differentiating factor.

3. History of the Brand Menu

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Starbucks claims to be in the people business, serving coffee. The brand strategy reflects this philosophy. Starbucks has managed to different its business by creating a unique coffee experience, infusing different cultures, serving its employees and its community.

Starbucks has an outlook genuinely interested in cultures beyond the US, proudly displaying its beans from exotic locations—Sumatra, Kenya, Guatemala, Costa Rica, Ethiopia, speaks for an awareness of a wider world. While anti-American anger has prevailed over the last few years, Starbucks understands that it roots will always remain American but acknowledges its global footprint.

Much of the Starbucks brand came from countries outside the US. In particular, trips that Schultz made to Italy in the 1980s ensured that the American is fused with the Italian to create the essence of the brand. The blend of the Italian culture is evident in the product names such as "frappaccino", "latte", "cappaccino",etc. In international locations, Starbucks tends to serve the same coffee but cater to the local food interests. In some cases it has began to serve tea. It is custom in China to drink tea, therefore Starbucks has preserved this custom and incorporated into its menu.

Another brand strategy that has proven useful is Starbucks contribution to the community. The Starbucks Foundation and investments into truly global causes has bode well for the Starbucks brand image.

Unfortunately, Starbucks efforts come short as the public continues to view their strategy as over aggressive and buying out competitors' leases, intentionally operating at a loss.

4. Brand Strategy

Starbucks claims to be in the people business, serving coffee. The brand strategy reflects this philosophy. Starbucks has managed to different its business by creating a unique coffee experience, infusing different cultures, serving its employees and its community.

Starbucks has an outlook genuinely interested in cultures beyond the US, proudly displaying its beans from exotic locations—Sumatra, Kenya, Guatemala, Costa Rica, Ethiopia, speaks for an awareness of a wider world. While anti-American anger has prevailed over the last few years, Starbucks understands that it roots will always remain American but acknowledges its global footprint.

Much of the Starbucks brand came from countries outside the US. In particular, trips that Schultz made to Italy in the 1980s ensured that the American is fused with the Italian to create the essence of the brand. The blend of the Italian culture is evident in the product names such as "frappaccino", "latte", "cappaccino",etc. In international locations, Starbucks tends to serve the same coffee but cater to the local food interests. In some cases it has began to serve tea. It is custom in China to drink tea, therefore Starbucks has preserved this custom and incorporated into its menu.

Another brand strategy that has proven useful is Starbucks contribution to the community. The Starbucks Foundation and investments into truly global causes has bode well for the Starbucks brand image.

Unfortunately, Starbucks efforts come short as the public continues to view their strategy as over aggressive and buying out competitors' leases, intentionally operating at a loss.

4. Brand Strategy Menu

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Starbucks has created a sub-brand called "15th Ave E Coffee & Tea.” This is part of what may become a nationwide “un-branding campaign. The driving forces are the recession and the perceived monopolization of the coffee business and driving out the local privately owned coffeehouses. Seattle's Best Coffee name was acquired when Starbucks baught the business in 2003. Starbucks also owns the following brands:

- Tazo Tea- Starbucks DoubleShot- VIA instant coffee

Starbucks also employs a co-branding strategy with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services.

5. Sub-brands

Starbucks has created a sub-brand called "15th Ave E Coffee & Tea.” This is part of what may become a nationwide “un-branding campaign. The driving forces are the recession and the perceived monopolization of the coffee business and driving out the local privately owned coffeehouses. Seattle's Best Coffee name was acquired when Starbucks baught the business in 2003. Starbucks also owns the following brands:

- Tazo Tea- Starbucks DoubleShot- VIA instant coffee

Starbucks also employs a co-branding strategy with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services.

5. Sub-brands Menu

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Originally Starbucks targeted young college students, however now as it has matured and expanded to target the high-end income coffee drinker. Starbucks is among the highest priced coffee drinks and now considered a "luxury" coffee maker. slightly more affluent group of adults around the ages of 18 to 35, who can spend time sipping coffee while working on other tasks.

6. Target Segments

Originally Starbucks targeted young college students, however now as it has matured and expanded to target the high-end income coffee drinker. Starbucks is among the highest priced coffee drinks and now considered a "luxury" coffee maker. slightly more affluent group of adults around the ages of 18 to 35, who can spend time sipping coffee while working on other tasks.

6. Target Segments Menu

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Starbucks deals with brand positioning by continuously catering to its customers. They position themselves by appealing to their target markets needs. This includes serving as a quick and simple to-go product offering (about 80% of their business). Most recently they have positioned themselves against McDonald's by also offering Drive-Thru windows at selected locations.

The VIA instant coffee branded product serves their customer base that is not able to visit a store.

Starbucks has also employed a strategy to create a meeting environment For those customers that prefer to spend time in their stores.

Therefore, Starbucks has positioned its brand to cover a broad spectrum of customers.










7. Brand Positioning Menu

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Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time. For example, several years ago, Starbucks ventured into the magazine business and quickly failed. Before the frappaccino, Starbucks introduced a carbonated drink that also failed. Howard Schultz, Starbucks CEO claims that that innovative and entrepreneurial spirit still lives in the fabric of the company. While many of these attempts failed, he credits the spirit of the company to create huge commercial successes. It is clear that Starbucks has redefined the coffee drink turning coffee into creations driven by customer insight.

With its state-of-the-art product development labs outfitted with coffee experts from around the world, Starbucks continue to invest in product development. In 2009, Starbucks spent $6.9 million on technical research and development.

Going forward, Starbucks continues to innovate. For example, Starbucks has identified its WiFi hotspots as an asset. With thousands of locations, Starbucks owns a network that can be leveraged. Starbucks plans to roll out new internet based products in stores ranging from online TV to music download service.

8. Product Development







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In 2009, Starbucks several stores will begin to be constructed as LEED-certified, reducing the environmental footprint. In 2006, Starbucks introduced a paper cup that contained 10 percent post-consumer recycled fiber, and last year it switched from the standard PET cold cups to polypropylene cold cups, which use significantly less plastic and reduce greenhouse gas emissions during manufacturing by 45 percent. Starbucks also intend to have 100 percent of its cups recyclable by 2012.

9. Packaging

In 2009, Starbucks several stores will begin to be constructed as LEED-certified, reducing the environmental footprint. In 2006, Starbucks introduced a paper cup that contained 10 percent post-consumer recycled fiber, and last year it switched from the standard PET cold cups to polypropylene cold cups, which use significantly less plastic and reduce greenhouse gas emissions during manufacturing by 45 percent. Starbucks also intend to have 100 percent of its cups recyclable by 2012.

9. Packaging Menu

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major

As part of our international strategy, Starbucks intends to seize opportunities to move beyond our retail stores. Extending its profi table global consumer products group allows them to reach more customers in more places that will allow them to grow the business at an accelerated pace around the world. There remains a big opportunity in the evolution of their distribution structure and with an increasing variety of offerings in the grocery channel.

Starbucks is adding to the product mix by offering new licensing agreements for its products with a number of other companies. Generally, the main purpose of creating the licensing agreements is to improve distribution and production methods of Starbucks products. The agreement with Pepsi-Cola Company to produce and distribute bottled Starbucks products in grocery and warehouse club stores is an excellent example of this type of licensing agreement.

10. Distribution

As part of our international strategy, Starbucks intends to seize opportunities to move beyond our retail stores. Extending its profi table global consumer products group allows them to reach more customers in more places that will allow them to grow the business at an accelerated pace around the world. There remains a big opportunity in the evolution of their distribution structure and with an increasing variety of offerings in the grocery channel.

Starbucks is adding to the product mix by offering new licensing agreements for its products with a number of other companies. Generally, the main purpose of creating the licensing agreements is to improve distribution and production methods of Starbucks products. The agreement with Pepsi-Cola Company to produce and distribute bottled Starbucks products in grocery and warehouse club stores is an excellent example of this type of licensing agreement.

10. Distribution Menu

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In general, the Starbucks coffee brand has positioned itself as a high-end spectrum among retail chain stores. Historically, the company succeeds in persuading nearly 40 million people to buy pricey espresso drinks. Starbucks pricing strategy has come to questions recently. Amidst the recession, Starbucks has decided to increase its product's prices. U.S. based stores raised prices by 5 cents per cup and ground coffee was raised by 50 cents per pound or an average of 4.9%. The pricing yields a %56% profit margin on all products. Company officials claim that the price hike is necessary to cover operating expenses (i.e. labor and fuel costs).

11. Pricing

In general, the Starbucks coffee brand has positioned itself as a high-end spectrum among retail chain stores. Historically, the company succeeds in persuading nearly 40 million people to buy pricey espresso drinks. Starbucks pricing strategy has come to questions recently. Amidst the recession, Starbucks has decided to increase its product's prices. U.S. based stores raised prices by 5 cents per cup and ground coffee was raised by 50 cents per pound or an average of 4.9%. The pricing yields a %56% profit margin on all products. Company officials claim that the price hike is necessary to cover operating expenses (i.e. labor and fuel costs).

11. Pricing Menu

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12. Marketing Communication Menu

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Starbucks has invested in understanding their customers and developing tools (in-store surveys, focus groups, tests) to measure customer satisfactions. They focus on serving the customer and detect the customers needs and wants that are unfulfilled. Consumers know they can count on Starbucks to offer a cup of coffee. They bring the brand to the consumers by offering stores in almost every street corner creating a strong presence. Starbucks has a high recognition for serving a reliable cup of coffee, its always going to taste the same whether you are in the U.S. or China.

13. Brand Awareness

Starbucks has invested in understanding their customers and developing tools (in-store surveys, focus groups, tests) to measure customer satisfactions. They focus on serving the customer and detect the customers needs and wants that are unfulfilled. Consumers know they can count on Starbucks to offer a cup of coffee. They bring the brand to the consumers by offering stores in almost every street corner creating a strong presence. Starbucks has a high recognition for serving a reliable cup of coffee, its always going to taste the same whether you are in the U.S. or China.

13. Brand Awareness Menu

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Starbucks has become a globally relevant brand. They are considered accessible and dependable. Like Wal-Mart, they manage the supply chain so well that they are never out of stock.

In recent years Starbucks has been subject to the possibility of “commoditizing” or diluting its brand image. Starbucks was edged out by Dunkin Donuts for first place as the best coffee house chain in the recently-released Customer Loyalty Survey. In a Consumer Reports taste test, McDonalds’ coffee won over Starbucks’. Additionally, the company’s same-store sales growth is declining. Furthermore, the competition is also adding or upgrading stores and emulating the Starbucks "experience" further diluting the Starbucks brand.

In general, the brand image has been suffering due to the backlash by consumers claiming that Starbucks is adopting agressive marketing tactics to gain more market share. A movement to reveal Starbuck's coffee sourcing practices and othe similar issues have contributed to tarnish its brand further.

The recent move to create several sub-brands may be hurting the brand image and possibly cannibalizing their own brand.

Starbucks is now working hard to revitilize its brand and taking new measures to reinvent itself.

14. Brand Image

Starbucks has become a globally relevant brand. They are considered accessible and dependable. Like Wal-Mart, they manage the supply chain so well that they are never out of stock.

In recent years Starbucks has been subject to the possibility of “commoditizing” or diluting its brand image. Starbucks was edged out by Dunkin Donuts for first place as the best coffee house chain in the recently-released Customer Loyalty Survey. In a Consumer Reports taste test, McDonalds’ coffee won over Starbucks’. Additionally, the company’s same-store sales growth is declining. Furthermore, the competition is also adding or upgrading stores and emulating the Starbucks "experience" further diluting the Starbucks brand.

In general, the brand image has been suffering due to the backlash by consumers claiming that Starbucks is adopting agressive marketing tactics to gain more market share. A movement to reveal Starbuck's coffee sourcing practices and othe similar issues have contributed to tarnish its brand further.

The recent move to create several sub-brands may be hurting the brand image and possibly cannibalizing their own brand.

Starbucks is now working hard to revitilize its brand and taking new measures to reinvent itself.

14. Brand Image Menu

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Starbuck's rapid growth and expansion has caused the company to lose brand equity. While falling in global brand rankings and negative consumer reviews are only an indicator of the loss of equity, the real indicator is in the poor performance of the company. The same store sales, annual revenue suggest that the company is experience challenging times. It takes years to build a brand equity and unfortunately it could easily be lost with one or a few blunders. For example, Toyota's recent recalls has had a significant impact on it's brand equity. Similary, Starbucks recent decisions have not added value to its brand.

15. Brand Equity

Starbuck's rapid growth and expansion has caused the company to lose brand equity. While falling in global brand rankings and negative consumer reviews are only an indicator of the loss of equity, the real indicator is in the poor performance of the company. The same store sales, annual revenue suggest that the company is experience challenging times. It takes years to build a brand equity and unfortunately it could easily be lost with one or a few blunders. For example, Toyota's recent recalls has had a significant impact on it's brand equity. Similary, Starbucks recent decisions have not added value to its brand.

15. Brand Equity Menu

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1. starbucks.com 2. B2Brandebate.com3. Interbrand.com4. Starbucks annual report fiscal year 2009

16. Sources

1. starbucks.com 2. B2Brandebate.com3. Interbrand.com4. Starbucks annual report fiscal year 2009

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The Starbucks Brand Audit