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This report will analyze the current trends in the specialty coffee segment are explained the business and marketing strategy of. Formation of successful marketing plan is the key point for a company to gain the competitive advantage over its competitors. The marketing plan evaluates the strategies currently adopting by the company. But the main theme of this report is to focus mainly on company marketing strategies with the help of SWOT Analysis, An off Growth Matrix, Boston Consulting Group Matrix, 4's. We will also try highlighting the company' short term goals & objectives, and how it can be achieved in the future.


Starbucks coffee Company represents an excellent example of a company that has successfully marketed an "experience. Moreover, its marketing strategies provide examples of positioning, image development, merchandizing, pricing, packaging, and market development. Starbucks success has helped propel the entire industry segment.

The specialty gourmet coffee segment has been rapidly growing since the early 1990s. According to the specialty coffee Association, specialty coffee beverage retail outlets (gourmet coffee shops) increased over tenfold in past decade. Their locations are expected to double by 2015. The growth of this segment was stated and accelerated mainly by Starbucks coffee. Starbucks is the leader in this segment and is becoming one of the most well known international brands in the hospitality industry, as with Hilton and McDonald's.

Starbucks opened its first shop in Seattle in 1971. Howard Schultz, the chairman, joined Starbucks in 1982 and introduced the Italian espresso bar concept in 1984. Becoming a public company in 1992. Starbucks accelerated the expansion of business with new capital. Starbucks has over 3,000 outlets in the United States and internationally and is rapidly opening new stores via joint ventures with local companies.

Now Starbucks is the biggest coffeehouse chain in the Globe with 8,505 company-owned and 6,505 licensed stores in 42 countries, making a total of 15,011 stores worldwide. Starbucks sells espresso-based hot drink, drip brewed coffee fruit bottled, coupled with pastries, snacks, salads, coupled with sandwiches soups, other cold and hot drink.

Competency of star bucks: To summarize, Starbucks has a high reputation for quality because of the following:

The company goes to extreme lengths to buy the very finest Arabica coffees available on world markets, regardless of price.

The company's freshness and quality are legendary. Beans that are held in bins for more than a week are donated to charity.

Every piece of coffee-brewing equipment that is sold has been tested and evaluated.

Each Starbucks employee is extensively trained to ensure that customers receive knowledgeable service.

Mission Statement:

"To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow". The following six Guideline Principles will help us measure the appropriateness of our decisions:

Provide a great work environment and treat each other with respect and dignity.

Embrace diversity as an essential component in the way we do business.

Apply the highest standard of excellence to the purchasing roasting and fresh delivery of our customer.

Develop enthusiastically satisfied customer all of the time.

Contribute positively to our communities and our environment.

Recognize that profitability is essential to our future success.

Starbucks has the following core values:

Provide a great work environment and treat each other with respect and dignity.

Embrace diversity as an essential component in the way we do business.

Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.

Develop enthusiastically satisfied customers all of the time.

Contribute positively to our communities and our environment.

Focus all resources to their coffee shop operation because they want to best serve for their customer.

Encourage new and innovative ideas akin to maintain competitive growth.

Dedicated thier self to continuous achievement in sales, profit and size of organization

Market Demographics:

The profile for the starbucks customer consists of the following geographic, demographic, and behavior factors:

Geographic: The geographic survey may include the identification of total number of population, in society and total number of target customer in which you are operating (Lanchester, Massingham, & Ashford 2002).

The immediate geographic target market for starbucks is the total population of the UK which is 60,776,238 approximately.

The specific targeted market of Starbucks is mostly the Employee of offices, students of schools, colleges, and universities.


Targeting adults and young adults is a good mechanism for Starbucks because this age level has the same interests as the foundation that promotes arts, culture, education, and the environment (starbucks.com). The company satisfies their customers through their advertising, support programs and, of course, their coffee.


The people who want to enjoy a totally different coffee experience, they go to starbucks as it is positioned a completely different coffee shop.


Starbucks has still succeed in providing a good quality coffee in wide rang plus snacks option for their cusotmer.Starbucks looking for perform the following benefits that are important to their customers:


Starbucks want to excel on their competitors theory make easy availability of coffee and snacks in all of its shop, which not available at the larger, dominant coffee chains.


Almost all kinds of coffee are exist from starbucks centrally located storefront.

Customer service:

The client will be daunted with the level of attention that they receive.

Competitive pricing:

Because it is highly competitive market, so the price of all range of coffee and other products should be price competitive.


The company situation analysis is used at the business level to determine the strategic issues and problems that need to be addressed through the next three steps of the strategic planning process.

Starbucks has own very good different kinds of strength to dominant in this industry make it to differentiate to others one in this market. This are the strength, those help starbucks to achieve their targets and desire goals. These are the stratbucks some important characteristics or strengths.


Strong Brand Recognition

Large retail distribution system

Quality product

Extensive product list

Good supplier relationship

Strong financial history

Strong human resources


Even though starbucks posses a number of strengths but it also has some weakness too. starbucks needs to overcome on and deal them for remaining the top position in this competitive market.

These are the s following list of starbucks weaknesses:

Dependence on single source of business income

Prices high relative to competition

Strong dependence on suppliers

Merchandise sales in stores


It is a fact that every company who enter in the market must have different kind of opportunities prevails in market. This is the important, how to recognize and make to strategy to acquire them, acquiring these opportunities is called success of company.

Starbucks can more successes in market if they will be able to act upon these opportunities accordingly.

The following new opportunities can help starbucks to success more in the future in the way of their business.

Expansion into overseas markets

Expansion into untapped U.K and worldwide markets

Expansion of brand name into new products or business lines


Nobody knows about tomorrow. Especially for nowadays circumstances, world is changing dramatically. Some new threats are prevailing in the market with full swing of their effectiveness. Despite the fact of strong position of strabucks in the market, they are still need to keep eye on these threat get strong positioning and branding.

These are the list of some very common internally and externally threats.

Economic conditions may make consumers unwilling to pay high prices

Political conditions abroad may limit expansion

Increasing competition in coffee market

May be reaching saturation point in some U.S markets

Increase prices of raw material for coffee and other stuff


In the mid-1960s the Boston Consulting Group (BCG) was founded to provide advice to strategic marketing planners. BCG developed a simple but useful strategic planning technique based on an analysis of a company product portfolio. The technique entail assigning each individual product of an organization to one of four possible cells in simple matrix according to the relative market share and rate of market growth associated with that particular product/business. (Essential of Marketing, Geoff, Lester, Ashford, 4th Ed, p382)

In the BCG matrix, star quadrant is the most dominant place where the companies enjoy the high market growth and high market share. That's why every company wants to stay in star quadrant. As STARBUCKS coffee shop is the renowned coffee chain in the world, that's why it clearly lies in the (STAR QUADRANT 'High Growth + High Share') because the annual sales of the company in last financial year 2009 are US $ 9.774 Million, moreover the coffee shop enjoying the highest market share as well in the coffee industry.


An off has proposed the idea of product. Market scope to aid in the formulation and selection of strategies, particularly for those companies with growth objectives. The basic framework of this approach is the matrix comprises market on the vertical axis and on the horizontal axis 'products'. In turn, each axis is subdivided into existing and new. Each cell of the matrix is form a different strategic alternative for achieving growth. (Essential of Marketing, Geoff, Lester, Ashford, 4th Ed, p380)

In the ANSOFF growth matrix, the STARBUCKS coffee shop lies in the (MARKET EXPENSION Existing Product + New Market), because company is making very good profit in almost every coffee shop in different location of the world. Expending its coffee market in Middle East, and Asia could be very helpful for the company's profit because there is huge potential for the coffee market as there is no famous coffee shops in that part of the world. Just like recently they have opened their two coffee shops, one in China and other is in Kuwait.


The term 'marketing mix' is attributed to the American Neil H. Borden and has been touched on several times in earlier chapters. As we have seen, the marketing mix consists of those marketing tools over which the marketer has control and therefore can vary in order to achieve overall marketing objective and strategies. (Essential of Marketing, Geoff, Lester, Ashford, 4th Ed, p380)

In order to make appropriate strategies for gaining customers' preferences and their loyalty, we need to understand as to how STARBUCKS Marketing Mix or 4 Ps have enabled the company to achieve superior customer satisfaction, and also in building a long-term relationship with its customers.

Following are the some recommendations for STARBUCKS in relation with marketing mix:

Frame Work of marketing Mix


Product is the bundle of benefits which the supplier offers to the purchaser. The particular set of benefits on offer will appeal to specific group of consumers: it is extremely unlikely that any product will appeal to everyone. Even products such as Coca-Cola, which is sold worldwide and is the world's most recognized brand name has only a minority share of the soft drinks market. Many people simply don't like it, or think it is too expensive, or prefer other drinks which meet their needs better. Attempts to create a perfect product which suits everybody are likely to result in over complex, over expansive products, which is why product orientation has fallen into dispute.

Decision that address the new product development process(innovation management), licensing strategies with potential partners, intellectual property rights, services provided to augment the revenue stream from base products product name/brand decisions ,development of complementary products by partners, creation of industry standards, packaging, and so forth, the critical need is to develop a stream of products with the right set of features to satisfy customer needs in a compelling yet simple fashion.( jakki j. Mohr, Sanjit Sengupta, Stanley Slater,2000, p7)

In Starbucks they made purely their products to satisfying the needs of the customer, and they made coffee with the finest coffee ingredients of the world. The different range of coffee and snacks offered by STARBUCKS are as follow:


Coffee Latte, Cappuccino, Vanilla Latte, Coffee Americano, Espresso


Caramel Hot Chocolate, Coffee Misto, Classic Hot Chocolate, Signature Hot Chocolate, Freshly Brewed coffee


Cinnamon Dolce, Java Chip, Espresso, Coffee, Caramel


Cinnamon Dolce Latte, Caramel Macchiato


Price is the total cost the customers of buying the product. It therefore goes beyond the simple monetary costs: customers also consider the difficulty of purchase, the cost of ownership of the product, and even the 'embarrassment' factor of owing the wrong brand. Some product has psychological association which customers find costly. (Essential of Marketing, Geoff, Lester, Ashford, 4th Ed, p380)

Decisions that establish price points for the company products, and address issues related cost to produce/manufacturer the good, margins along the distribution channel, competitors prices (pricing relative to a specific firm market position), customer value, total cost of ownership for the customer, price for product bundles, and profitability.( .( jakki j. Mohr, Sanjit Sengupta, Stanley Slater,2000, p8).

Price is the only element of the marketing mix that produces revenue, As such; it serves a tactical as well as an economic role for an organization 9Holloway and Robison 1995). The price charged sends many signals about the likely value of the product being offered and, as such, must be commensurate with the quality of experience,

Starbucks's product prices are relative high than others, because they target those people of society who give the preference on quantity. Following are the some prices of STARBUCKS famous products:

ESPRESSO: Tall Grande Vent

Coffee Latte £2.05p £2.40p £2.65p

Cappuccino £2.05p £2.40p £2.65p

Vanilla Latte £2.35 £2.70p £2.95p

Coffee Americano £1.75p £1.90p £2.05p

Espresso £1.20p £1.40p £1.55p


Caramel Hot Chocolate £2.90p £3.25p £3.50p

Coffee Misto £1.95p £2.35p £2.55p

Classic Hot Chocolate £2.20p £2.50p £2.80p

Signature Hot Chocolate £2.65p £3.00p £3.25p

Freshly Brewed coffee £1.65p £1.75p £1.90p


Cinnamon Dolce £3.05p £3.25p £3.45p

Java Chip £3.05p £3.25p £3.45p

Espresso £2.65p £2.85p £3.05p

Coffee £2.50p £2.70p £2.90p

Caramel £3.05p £3.25p £3.45p


Cinnamon Dolce Latte £2.70p £3.05P £3.30P

Caramel Macchiato £2.70P £3.05P £3.30P


Place is the location where the exchange takes place. This may be a retail store, it may be a catalogue, it maybe a restaurant, or it may be a website. Deciding on the appropriate place for the exchange is not merely a matter of movie goods around but is rather a strategic issue. The decisions revolve around making it as easy as possible for customers to find the good and make the purchase, and also using channels which give the appropriate image for the product. For example, retailing a product through discount stores gives a completely different impression from retailing a product through discount stores gives a completely different impression from retailing the same product through exclusive department stores. (Essential of Marketing, Geoff, Lester, Ashford, 4th Ed, p380)

Now in case of Starbucks they mainly build their stores in the prime location of the city where they can easily attracts their desired customers who really want to enjoy the taste of coffee. Just like in UK they build their stores mainly in the shopping malls and town centers, Amusements Park, stadiums, airports etc. Now it is the need of the time that they should be concentrate to open their more stores in Middle East and Asia.


Promotion is such a large part of marketing that it is often mistaken for the whole of marketing. Promotion encompasses all the communication activities of marketing: advertising, public relations, and sales promotions, personal selling, and so forth. Promotion is not simply a hard sell, however: it is a way of meeting customers 'information needs, at least in part. It is also, to an extent, persuasive in that most marketing communication emphasis the good aspects of owning products and downplay the bad aspects.

Starbucks nearly spends £4.7 million every year for promotions. It is include the cost of print media, electronic media, indoor, outdoor media etc.

The company's latest stunning plan is the Starbucks Card. You buy a re-chargeable card in the UK which can be used at coffee bars in the US, Canada, Australia and Thailand. The card will enhance the Starbucks experience for customers allowing them to buy their daily cup of coffee quickly and easily, even when they are not carrying cash.

Recently company through an agreement between Starbucks, and T-Mobile the two companies have come up with a way to provide internet access at Starbucks location and high speed broadband for Starbucks customers as well. In addition, T-Mobile hot spot customers get to use the Starbucks stores as they do now. Moreover Starbucks spends millions of dollars internationally to protect the environment and global warming.

DIVERCIFICATION: "The major reason for a business adopting a strategy of diversification is therefore to allow it to reduce its dependence upon a single market area" (W. Stewart Howe 1986 p 153). At a general strategic level An off suggests three reasons why firms diversify. First, their objectives cannot be achieved by continuing to operate in their existing markets. Thus, since continued operation in these markets is not able to diversify the profit, risk or growth objectives of the business, achievement of these must be sought in new market areas. Second, where a business has excess financial resources beyond those necessary to satisfy its expansion plan in its existing markets, then rather than retain these resources in liquid form of business may invest them in new markets areas. Third, if greater opportunities are presented to the firm in new market areas than accrue from its existing activities. Then a diversification program may be undertaken to benefit from these. There are two types of diversifications:



RELATED DIVERSIFICATION: Expending combining with firms in different, but related industry that are "Strategic Fits".

UNRELATED DIVERSIFICATION: Growing by combining with firms in un-related industries, where higher financial returns are possible.

Now, if Starbucks want to diversify its business outside the industry, then the company should start a totally new business that is not from the same industry. For example Starbucks is a coffee shop, if they enter in the manufacturing business and start making cars, bikes etc that will be the perfect example of diversification. But the main focus of the Starbucks should be on their strategic business unit which is coffee shop. If they want to diversify their business within the same industry i.e. related diversification, then the Starbucks should combine their business with their competitors to launch new products.


"The franchiser/licenser remembers to provide a standard package of components, or ingredients together with management and marketing services, and advice. Since franchising involves the transfer of tangible, it can enable greater control of the operation for the originating manufacturer than licensing" (Lancaster & Massing ham & Ashford 2002 p 437). Starbucks currently use three strategies for business in overseas. These strategies are as follow:

1: Joint ventures

2: Licenses

3: Company-Owned Operations.

Mainly the company uses the company-owned shops for the business in other countries.


By analyzing the above whole information such as Swot analysis, An off analysis, BCG matrix, marketing mix, following should be the primary objectives of the marketing plan of Starbucks coffee shop for next 3 years:


Sales should be increased by 15 to 20% at least.

In order to get increased sales, they should increase Gross Profit margin by 25%.

Find more new markets especially in Middle East, and Asia.

More strengthen their position as a worldwide coffee shop leader.

Increase marketing budget by 15%

In order to achieve the above future objectives, the Starbucks coffee shop should follow instructions:


As Starbucks introduced a stunning promotion plan that is Starbucks re-chargeable card for purchasing coffee whether you have money or not at that time. Just like that company should develop a membership card especially for the students. Some discount should be offer to regular customer, and student to increase the detainment.


To maintain the top position in the coffee market, Starbucks should go and find some new coffee potential market. Just like there is great potential of new coffee shop especially in Asia, and Middle East, as there is no famous coffee shop. Where they can capture in new market, and got some handsome profit as well.


The Starbucks coffee shop should maintain the competitive advantage that it has got over other coffee shops. In order to maintain leading position in the coffee market, the Starbucks should introduce innovative products after good intervals.


To maintain the dominant position in the coffee market, it is necessary for the Starbucks that, they should introduce some really innovative products after good intervals. The induction of new products creates the brand loyalty among the customers.


In any company market department play a vital rule in increasing the sales plus revenue. So It is very essential for the Starbucks to full fill the requirement of its Marketing Department whether it's finically or non financially. So that they can performed its task potentially. Moreover they are some other resources too, thorough which a Starbucks increase the sales revenue. For example, they should conduct promotions Events, Held seminars and get the services of Global celebrities.


Diversification is a very important tool for maintaining overall position in any market. Starbucks cannot rely through limited niches products. They have to adopt t

Diversification. Diversify the business in product-related items, or unrelated items to increase their revenues.


To maintain the superb quality and taste of different products in Starbucks, the company should adopt the Total Quality Management tool, which means improve the product's quality until the perfection, and there is no defect on product or zero defect products.


Training and development of employees is an important task for the management in order to enhance the progress of company, and increase the sales, and produce the error free services.


Employee's motivation is very important for every organization to get good profit, and in order to maintain its position in the market. Good pay, and reward system is the best tool to motivate the employees. So Starbucks should try to give good pay and benefits to their employees during the job.