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The Evaluation Of Starbucks Marketing Essay

1440 words (6 pages) Essay in Marketing

5/12/16 Marketing Reference this

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They provide by being a responsible company. They also ensure a quality product by grinding coffee beans every time a new pot is brewed. This will not only provide customers with fresh quality coffee but also fill the café with the aroma of fresh coffee all day to entice other people to come in and drink coffee.

Evaluate Starbucks atmosphere/physical surroundings.

Starbucks is going through a revamp in Singapore from what I see from the new outlets. They have changed to long tables which are good for bigger groups. They also have bar seats facing the streets (probably to entice the people outside to come in). A number of seats have also been changed to cushioned seats instead of the wooden ones but those still remain for the normal tables. This makes the entire area a nicer place to sit down and relax with a book in hand and coffee on the table.

What are the strengths and weaknesses of this atmosphere? What can be done to improve the atmosphere at Starbucks?

Strengths

Weaknesses

Good place for people to sit down and relax, read a book, study or people watch.

Because it is a good place to be in, people spend a lot of time there but this does not necessarily translate to more sales. In fact, potential customers may not come in because there are no seats left.

The aroma of coffee and pastries being heated up can bring customers in as well as cause customers who are already in the shop to spend more.

If the outlet is not busy, the aroma which is one of the main draws may not be present.

When the outlet is very busy, tables may be left with crumbs and dirty cups and plates which is rather unsightly for customers.

Starbucks could look into offering unlimited refills for their drinks during non-peak hours for a higher price (but they have to enforce a no sharing rule which could be hard). They already have signs in placed to remind customers not to study there during peak hours but I do not know if the service staff enforces it strictly.

A pot of fresh coffee could be brewed every 30 minutes during non-peak hours to produce the aroma of fresh coffee to entice people to come in and make a purchase (similar to what Famous Amos does – free smells)

Staff hired to specifically keep the outlet clean instead of getting cashiers or baristas to double up especially during peak hours will help keep the café clean. Starbucks could educate the customers to be responsible and help keep their overheads low by clearing their own cups and plates (similar to Ikea) and in turn the savings would be passed on to the consumers.

Part B (5 points): Determine what gaps in the 5 Gap Model of Service Quality (Appendix A in your textbook) that Starbucks is currently facing. Next, provide suggestions for improvement for each gap that you believe Starbucks is currently facing.

Quality specifications versus service delivery

Although Starbucks spend a lot of their barista training, I do not know if as much training is given to those who work in their licensed stores overseas considering that there are part-timers working as baristas. I personally have had drinks there were not made to the standard that I have come to expect from them and the taste of the drink does vary from outlet to outlet.

Starbucks already has a system in place whereby a customer can change their drink if they are not satisfied but I think proper training like in the company-owned stores should be given throughout all outlets to ensure consistency in the drinks. This will ensure that customers do not have a bad experience to begin with.

Expected service versus perceived service

Based on past experiences, be it in Singapore or overseas at different Starbucks outlets as well as the amount we are paying for a coffee, we have a high expectation of the lifestyle that we have bought into. If the gap between the quality specifications versus service delivery increases or if other tangible aspect such as the cleanliness of the outlet is bad (dirty tables and floors or damaged furniture) will lead to an increase in expected service versus perceived service gap.

To ensure that the tangible aspect of their business can be enhanced, damaged furniture should be repaired or replaced. This will ensure that the looks of the outlet is maintained and that no customer would be put in harm’s way due to faulty furniture. The outlet should be kept clean at all times as well, right now during peak hours, empty cups and soiled plates are left on the table. Even if customers were encouraged to dispose their own cups (currently most do not clear their cups), the tables may still be wet or dirty thus the staff need to play their part as well. Maybe management can look into hiring people specifically to keep the outlet in check instead of relying on the staff to serve customers and keep the outlet clean as well.

Part C (16 points): Developing Marketing Strategies for Starbucks

Conduct a SWOT analysis of Starbucks. This should include 2 items for each component of the SWOT (2 strengths, 2 weaknesses, 2 opportunities and 2 threats).

Strengths:

Very strong brand recognition and equity

A large number of stalls spanning over 50 countries

Weaknesses:

50% of the stores are in USA (which may be over penetrated), and they have not been able break into large emerging markets like India and Vietnam

Their product is priced on a higher range and may turn off potential customers

Opportunities:

They recently signed a joint venture agreement with Tata Global Beverages Limited to operate Starbucks in India with the first store set to open in Mumbai in October 2012

They bought a juice company Evolution Fresh in late 2011 to try and diversify the core business. This may bring about additional revenue for the company

Threats:

Entrance of high quality easy to use home espresso machines such as Nespresso which could encourage consumers to make their own instead of buying a cup from Starbucks on the way to school or work

Rising cost of coffee beans and other commodities may price out more people from a cup of Starbucks coffee

What strategic initiatives could Starbucks undertake for each element of the Product Expansion Grid (see Slide 12, Chapter 3 notes). Please list 2 initiatives for each element in the grid (2 for product development, 2 for market development, etc).

Market penetration

Opening more stores in emerging markets such as China and Mexico in their second and third tier cities. Currently they is about 1 store for every 25,000 people in the USA and 1 store for every 65,000 people in Singapore. But there is only 1 store for every 2.04 million people in China and 1 store for every 317,000 people in Mexico.

The Starbucks card could be linked worldwide to receive points or to accumulate drinks (similar to the Hilton HHonors card) instead of just being linked to the individual countries like it currently is.

Market development

They can find partners (similar to what they did in India) in other developing markets such as Vietnam and South Africa to tap on their market potential before their rivals.

They should start concentrating on smaller cities/states in the countries that they have already broken into such as China, Russia, Australia and the Middle East.

Product development

They can come up with new drinks to refresh their menu from time to time such as the seasonal Christmas drinks or the recently introduced salted caramel mocha.

Since they bought over Evolution Fresh, they can start offering fresh juices and smoothies as well instead of only bottled juices. They did the same thing when those bought over Ethos water and started selling it at all their stores.

Diversification

They can look into producing a similar machine to Nespresso to challenge the stronghold of Nescafe.

They can look into growing their own coffee beans to combat the rising cost of commodities by having economies of scale. They will also be able to ensure a quality bean is grown.

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