MKT 3320 001 Brand Audit 3
MKT 3320 001 Brand Audit 3
MKT 3320 001 Brand Audit 3
I recently came across this image in my Twitter Stream. It came from a friend in Toronto.I often
write about Starbucks marketing, and have addressed the following topics:
Its important to remember that brand value is built by consistently delivering a quality product
or service. Without quality coffee choices a cinnamon logo is a poor gimmick at best.
The extras I am talking about here are only meaningful after the hard work of shipping quality,
and then continually shipping so the consumer only experiences the unexpected delightful
surprises.
Starbucks Brand Essence
Over time brands can drift off course for all kinds of reasons. Good brands are able to recognize
this and address it head on. Several years ago Starbucks began to lose its edge, losing ground to
the competition. To their credit the company called a time out for a corporate re-education, as
expressed in the NY Times was an article called Starbucks Takes a 3-Hour Coffee Break. This
was a gutsy move; however, it spoke volumes about the connection between leadership, culture
and the consumer experience.
Source: http://www.strategicdriven.com/marketing-insights-blog/starbucks-brand-starbucksbrand-identity-personality-experience/
Consumer Profile
Starbucks holds around 33 percent of the market share for coffee in the U.S. It sells almost as
much coffee as do fast food and convenience stores combined, even though it the bulk of its
consumers are in cities or upscale suburban areas. Starbucks has been able to gain such a large
share of the market by catering specifically to a well-defined target audience.
Adults
Starbucks primary target market is men and women aged 25 to 40. They account for almost half
(49 percent) of its total business. Starbucks appeal to this consumer age group through hip,
contemporary design that is consistent in its advertising and decor, and working to keep its
products current as status symbols. Customers tend to be urbanites with relatively high income,
professional careers and a focus on social welfare. This target audience grows at a rate of 3
percent annually.
Young Adults
Young adults, aged 18 to 24, total 40 percent of Starbucks sales. Starbucks positions itself as a
place college students can hang out, study, write term papers and meet people. Starbucks appeals
to this consumer directly through introducing technology as soon as it comes available, focusing
on social networking and actively cultivating a cool image. The young adult audience grows
4.6 percent each year.
Kids and Teens
Kids and teens are also a large part of Starbucks target audience. Together, customers age 13 to
17 account for just 2 percent of Starbucks sales, but most items for kids are purchased by the
parents. Whether the focus is on the steamed milk that Starbucks baristas refer to as
babyccinos or the sugary, caffeinated, whipped cream topped coffee drinks that are so popular
with teenagers, kids and teens form a large part of Starbucks business. Kids go there with their
parents; both mother and child leave with cup in hand. Teens meanwhile use Starbucks as a place
to hang out with friends or study. Starbucks may not cater directly to kids (and risk criticism
about the high calorie and caffeine content of some of its drinks) but it does make its products
kid-friendly, offering special child sizes for instance.
Complimentary Products
Specialty coffee drinks account for around 75 percent of Starbucks sales, but an increasing
amount of its business is centered on selling whole bean coffees and merchandise. Starbucks has
made its coffees available for direct order online, in supermarkets and offered select food service
outlets the chance to carry Starbucks family of coffee, including Starbucks brand, Seattles Best
and Starbucks VIA. These products give consumers a chance to have the Starbucks experience
at home, and it is an area that Starbucks is pushing.
Source: http://smallbusiness.chron.com/starbucks-target-audience-10553.html
Advertising/Marketing Communications
Current Situation
Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world,
operating in more than 50 countries, (Starbucks Corporation).
Starbucks currently holds approximately 33% of the U.S. coffee market share
(OFarrell), with net revenues in 2011 of $11.7 billion (Starbucks Corporation). In addition to
the U.S. market share, Starbucks ended 2011 with over 17,000 stores in 55 countries globally,
with another 800 planned for 2012 (Starbucks Corporation). Starbucks has also focused on
expanding its portfolio of products, all to expand market share.
Competitor and Issues Analysis
Starbucks continues to face growing competition in the coffee market, both in the U.S.
and globally. Competitors such as McDonalds have recently introduced gourmet, coffee shop
style offerings to their product mix. Some competitors have effectively targeted customers
looking for lower-priced and on the-go options, made available by drive thru services. One
element favoring Starbucks over competitors is its ability to be flexible when it comes to its
store size and layout (Misonzhnik). This allows Starbucks to alter each individual store based
on location, and to expand in to alternate territories such as grocery stores, rest stops, and so on.
Marketing Objectives
Moving forward, Starbucks is going to attempt to tell the companys story through
various marketing campaigns through various outlets including advertising, in store campaigns,
social media, etc.
Marketing Strategy (4 Ps)
Product: While coffee remains the core product and focus of Starbucks, the introduction
of various new products has expanded the Starbucks product portfolio. For example, the
acquisition of Tazo Tea has allowed Starbucks to provide new offerings such as tea-only stores
(Blessing). Also, as part of the marketing campaign, Starbucks is making a push for its store
employees to provide customer with exceptional customer service. For example, part of the
campaign is highlighting Starbucks willingness to remake a drink for a customer if it is not
satisfactory. This will ensure that Starbucks is always putting the best product forward.
Pricing: Starbucks has always offered a range of products that vary in price. With the
economy slowing starting to gain momentum, Starbucks main objective must be to keep prices
on par with competitors. In addition, a market opportunity presented itself during the recession
at home coffee drinkers. In order to capitalize on this market segment, Starbucks must price there
at home coffee selections closely to competitors such as Dunkin Donuts, while also balancing
economic factors such as distribution costs, fair-market costs, and more.
Promotion: Starbucks will continue to adopt new promotional outlets in order to reach
consumers. An active participation on Web 2.0 platforms, televisions advertisements, and email
marketing will all be utilized to promote products and initiatives. Initiating contests for
customers to participate in will be a main focus. These can range from coffee bag design
contests, to social media contests integrating platforms such as Instagram and Twitter. One more
promotional opportunity that will be utilized is participation in Daily Deal sites such as
Groupon and LivingSocial, in order to associate the Starbucks brand with affordable deals.
Placement: The traditional methods of distribution will continue to operate the placement
of Starbucks products to its consumers. One area which shall be investigated further is how to
better penetrate alternate retail outlets such as grocery stores, in order to attract the market of at
home coffee drinkers. Also, other potential sites for warehouses shall be scouted and considered
in order to anticipate for potential growth.
Action Programs
-Initiate television ad campaign for new product launches
-Initiate coffee bag design contest
-Organize free in store tastings for new products
-Develop Daily Deal site offering that will require email list registration
Budget
In order to compete with the large marketing budgets of competitors, Starbucks will
increase its marketing budget from $94.4 million (Morrison) to $150 million. If this increase
yields significant results, then more funding could be proposed in future years.
Measurements
To measure the success of various campaigns, Starbucks will engage in metrics analysis
tools to monitor lead generation, customer engagement, and sales curated. For online campaigns,
Starbucks will implement the use of highly rated, industry-standard metrics monitoring software
as well as a Customer Relationship Management database to effectively manage all Starbucks
customers and leads. To track the ROI of in-store and offline marketing efforts, Starbucks will
monitor and analyze sales results during specific campaign time frames. For example, during the
free in store tasting days, Starbucks will monitor and analyze store traffic and sales trends,
including referencing criteria such as geography in results.
Source: https://sites.google.com/a/email.vccs.edu/starbucksportfolio/marketing-plan
Media
From morning coffee to afternoon lattes, Starbucks customers post countless pictures of their
handcrafted beverages on social media channels. The iconic Starbucks cup often appears with
an interesting background from international skylines to beach sunset shots. But theres
something different about Starbucks Frappuccino blended beverage photos. Theyre usually
selfies featuring a person sipping their favorite Frappuccino through a green straw.
Its a reflection of the personal relationship people have with the beverage. A lot of photos with
Starbucks cups say, here I am, this is the view from where I sit. With Frappuccino, its more of
a here I am image and message, said Ryan Turner, Starbucks director of Global Social Media.
Starbucks core social media team communicates and connects with the personalities of beverages
and fans through over 30 accounts on 12 different social platforms. Frappuccino alone has more
than 11 million followers on Facebook, Twitter, Instagram and We Heart It. How does the team
do it?
Their work is a constant cycle of listening to people who are drawn to popular Starbucks
beverages and then holding the funhouse mirror up, as Turner calls it, to reflect the community.
The Digital Native
Frappuccino, which recently celebrated its 20th birthday, is older than the social media tools its
fans use every day. In 1995, Starbucks launched the first blended beverages coffee and mocha.
The now iconic green straws and dome lids were added in 1999. A few years later, in 2002,
Starbucks introduced new Frappuccino flavors of vanilla bean, strawberries and crme and
double chocolate chip.
Frappuccino, especially the approachable flavors, became a young adults foray into coffee and
the coffeehouse, said Ashlee Langholz, Starbucks manager of social media strategy. Its a
beverage they can enjoy while they connect with a friend or family member who is going to get
coffee at Starbucks.
Customers started their own Frappuccino fan page on Facebook in 2008 and were a million
strong when Starbucks became involved with the community a year later. Its personality
defined by fans is joyful and exuberant. Because a Frappuccino can be customized with more
than 36,000 combinations, its also viewed as a statement of a customers personality.
When youre looking to carve your identity in this world you have your musical preferences,
movie tastes and in some small way the type of Frappuccino beverage you like fits into the
picture, said Jeremy Bronson, a community manager on Starbucks social team.
Fans fascination with making Frappuccino a part of their lives doesnt surprise Secelia Kirby,
also a Starbucks community manager. Its common in our culture to obsess over a singular
thing, she said. Whether thats a boy band, a celebrity or a beverage.
Love for the beverage shows up regularly in response to Starbucks social media posts. A recent
post on the Frappuccino Facebook page announcing the Happy Hour promotion (underway now
through May 10) received more than 120,000 likes. On Twitter, those proclaiming they adore
Frappuccino so much they want to marry it often receive a virtual engagement ring in response.
An Internet Celebrity
While the Starbucks social media team unites the Frappuccino community with we and us
language in their posts, they take a different approach with another fan favorite beverage
Pumpkin Spice Latte.
PSL, Starbucks most popular seasonal beverage of all time, is about nine years younger than
Frappuccino. Early in 2003, a small group gathered in the Liquid Lab, a secure research and
development space on the 7th floor of Starbucks headquarters in Seattle. The lab was a cross
between a chefs kitchen and a scientists playground with industrial refrigerators, espresso
equipment, and an eclectic mix of potential ingredients and flavors.
Peter Dukes, director of espresso Americas for Starbucks, was the product manager who led the
development of Pumpkin Spice Latte.
Nobody knew back then what it would grow to be, Dukes said. "Its taken on a life of its own.
PSL also has strong social media following of its own, after bursting on the social scene last fall
with dedicated Twitter and Tumblr pages.
The personality of PSL is distinctly different from Frappuccino, and messges about the fall
beverage are written from a first-person perspective. For example, an October post on Twitter
noted, My lederhosen are too tight! This is the wrst. Yes, PSL wears clothing, and incidentally
has a (pumpkin) cat named Ginger.
The Starbucks social team established traits to support PSLs spirited persona and decided to
treat it as a celebrity after noticing people who follow PSL on social media also follow more
celebrities than the average user.
Its like fleshing out a character for a novel or a movie, Bronson said. There are different
aspects of its personality that might not even be evident in any posts. The backstory colors our
interactions when we respond to comments from fans.
These narratives write themselves if you really pay attention to how people are interacting with
the beverages as part of their lives, added Turner. Thats the simple secret of what we do with
all our social channels. We listen.
Source: https://news.starbucks.com/news/how-the-starbucks-social-media-team-captures-thepersonality-of-a-beverage
Promotions
2012, there was a bit of a backlash at first because it was seen as too American and not very
British. It did make me laugh that customers gave names ranging from Tax Dodger to Ivor
Biggun though!
Once all the fun died down, a lot of regular customers actually loved the fact that the staff at their
local Starbucks remembered their names. And you only have to do a quick Google search to see
how many customers have shared pictures of their cups on social media.
Adding value
In my role, Im on the road a lot, attending meetings and appointments. If I have time between
them, Ill always make a beeline for a Starbucks because I know I can access the free WiFi. This
allows me to have a coffee, and maybe a cheeky cake, whilst cracking on with work. That little
bit of extra value beyond the fare of coffees and cakes keeps me going back again and again.
Clusters of coffee shops
I didnt realise this until I researched it, but part of Starbucks marketing strategy is to hit a new
territory hard and open a few coffee shops there often in very relatively close proximity to one
another.
This is very clever, because it creates the impression in consumers minds that theyre
everywhere, and this omnipresence often both compels consumers to use the stores, and
validates the decision because theyre so accessible.
Great word of mouth
Word-of-mouth recommendations are a cornerstone of Starbucks marketing strategy, particularly
when new stores are launched. I was flabbergasted to read that the marketing budget can be as
little as 1% of Starbucks spend on advertising which goes against the conventional wisdom of
a figure much closer to 10%.
As a joined-up strategy, clearly points one and two play a key part in this as part of a process of
building up a customer base of loyal fans.
Great offers
The words Starbucks and offers arent words youd typically associate with one another.
However, when the stores do them, they do them very well indeed.
The offers are usually focused around new products and done in a very engaging but understated
way, which often makes a customer feel like theyre in on something that not everyone else
knows about. And, lets face it, all of us consumers feel like were in the know by taking
advantage of promotions.Take a look at these great examples of the way Starbucks runs
promotions.
Starbucks has proved that it can build a global empire using these marketing strategies, and any
business of any size can learn from these great pointers.
Source: http://thelincolnite.co.uk/2014/06/key-elements-starbucks-marketing-strategy/
Digital Strategies
Source: http://assets.entrepreneur.com/article/how-starbucks-went-digital-why-you-should-tooinfographic.jpg?_ga=1.105321859.1078315758.1441693808
At the company's shareholder's day in Seattle, Schultz and Winfrey announced jointly that,
beginning April 29, the company will sell Teavana Oprah Chai in both Teavana stores and
Starbucks stores across the U.S. and Canada, with Starbucks making a donation for each product
sold to the Oprah Winfrey Leadership Academy Foundation to benefit educational opportunities
for youth.
Oprah Winfrey personally developed the tea with Teavana's leading teaologist Naoko Tsunoda.
The distinctive blend of tea, which features a bold infusion of cinnamon, ginger, cardamom and
cloves, blended with loose-leaf black tea and rooibos, will be made available to customers in
time for Mother's Day in the U.S. and Canada in handcrafted latte and loose-leaf tea formats.
Of all the celebrities in the world with whom to partner, Jim Cramer says Schultz picked a
winner. "There's something called the Oprah effect," he said. "She has the ability to increase
sales almost single-handedly."
Source: http://www.cnbc.com/2014/03/19/
#80 Starbucks
$70.9 Billion
Ticker
SBUX $58.36 $0.62 (0.011%)
Industry
Restaurants
Founded
1985
Country
United States
Chief Executive Officer
Howard Schultz
Website
http://www.starbucks.com
Employees
191,000
Sales
$17.01 B
Headquarters
Seattle, Washington
Starbucks on Forbes Lists
#572 in Sales
#275 in Profit
#1,579 in Assets
Starbucks Corp. engages in the manufacture and sale of coffee and tea. The firm operates
through the following segments: Americas; Europe, Middle East, and Africa; China/Asia Pacific;
Channel Development; and Other. Its brand portfolio includes Starbucks Coffee, Seattle's Best
Coffee, Tazo Tea, Evolution Fresh, La Boulange, and Torrefazione Italia Coffee. The company
was founded in 1971 and is headquartered in Seattle, WA.
Source: http://www.forbes.com/companies/starbucks/
Brand Exploratory
4) Sometimes, it is hard to tell if your drink has been called, because it gets loud.
5) Yes. Gold Card holder/member. Likes the shininess of the card and getting free stuff.
3) 7.
4) Yes.
5) Yes.
Answers from respondent #4:
1) Very Easily.
2) In-store facilities.
3) 7.
4) Yes.
5) Yes.
Answers from respondent #5:
1) Very Easily.
2) In-store facilities.
3) 8.
4) Yes.
5) No.
B. Extensive Recommendations
1) Bring back the Starbucks Ice-creams- The Starbucks ice-cream line was introduced a
few years ago and was widly popular among different segments of the customers. But
after a short stint, those products were divested out of the market. No specific reasons
were cited. Most probably, the ice-cream line was not making decent turnovers and
profits. However, consumers seemed very disappointed and many have written on various
social media pages of Starbucks to bring them back, but they were not brought back. The
ice-cream flavors were based on the best-selling Starbucks frappuccino flavors. If those
products are re-introduced with the right marketing techniques, the Starbucks ice-cream
line is sure to bag huge amounts of revenues and proceeds.
2) Extend the line of bottled and carton Starbucks drinks- Bottled drinks and cartons of
beverages from Starbucks have been all the rage in recent years. They are easier to carry
around (according to some people) at schools, colleges, offices, etc. and are even better
for storing purposes in home refrigerators. These beverages are also to stay intact and
stored for a longer period of time than the average Starbucks coffee store bought drink.
However, consumers seem to be alittle dissatisfied with the number of flavors available
form trying. Some of the flavors are too common (example- Caramel), and some of them
are a little too uncommon (example- Mocha Coconut). Many of the carton drinks are also
not available at grocery stores easily. So, flavors like Green Tea, Strawberries & Creme,
etc. should be introduced soon and made available. The distribution chain should be
enhanced to make the carton beverages more easily available.
3) Promote the La Boulange bakery and other Starbucks food items better- Even
though, Starbucks sells a good number of its bakery and other food items across the
globe, it could benefit from better promotional methods of its food pieces. La Boulange
has not met its projected bakery items sale and profit growths, as per various reports from
2015. Coffee is Starbucks official best-selling line, but it could shift some of its
attention to promoting its La Boulange and other food pieces on social media, TV
networks, newspapers, magazines, flyers, posters, leaflets, etc. and even on the wall and
floor boards Starbucks has in its stores. Promotional deals can also be applied such as
BOGO, extra toppings, regular happy hour discounts, etc. This relates to leveraging
secondary brands.
4) Introduce a Value For Money coffee and beverage line for adults over 35 years of
age- Even though, Starbucks is often promoted as affordable luxury, some of its
potential and current age group (like people over 35 years of age) are not too happy with
its pricing policies and often choose substitute coffees and beverages from places like
Dunkin Donuts, etc. To hold onto such a customer base, Starbucks should conduct
substantial market research to launch a low priced, beverage line. Ideas of drinks in that
line may include low fat coffee, honey green tea, skinny lattes, etc. Starbucks should look
at every customer of theirs as equally important. Hearing what customers have to say and
working accordingly is a sure way to enhance company turnover and profit digits.
Responsibility/CSR activities, it will not hurt to join hands with a few more prominent
nonprofit organizations to give back to society and constantly improve its overall image.
Starbucks users are usually affluent, well educated, medium to high income consumers
and they are almost always interested in giving back to communities. Such consumers
will also be able to increase their knowledge on such nonprofit institutions and might
even be willing to donate decent sums of money. These nonprofit firms are always in
need of funds to improve their research and aid packages. So, it is a win-win situation for
both Starbucks and these reputed nonprofit associations.
Final Conclusion
The driving thought at Starbucks is the complete emotional and functional encounter offered by
the brand. The background for the experience and the paints, scents and other impressions
associated to it all assist to craft and strengthen Starbucks brand links and associations.
Even if Starbucks pay minor amounts for promotions, it became a well-built brand and a billiondollar multinational enterprise due to favorable exposure and public relations.
While there is no denying that Starbucks typically endeavors to listen to its customers, it can also
be said that there is absolutely no harm in attempting to perk up their future efforts in bettering
their customer service even further. This will not only shoot up total sales and profit figures but
improve brand positioning, build better brand equity, enhance social listening, etc.