STARBUCKS

Introduction

Starbucks is a transnational coffeehouse chain situated in Seattle, Washington. The corporate has since been recognized for its quality beverage products and customer focus. Additionally, it offers an extensive collection of beverage products comprising coffee and tea. Starbucks does not only provide quality coffee but also establishes an environment convenient for all its customers (Kumar 2016, p. 6).The company prioritizes all its stakeholders, including its work personnel, consumers, and partners.

Figure 1 A Starbucks product

 

Figure 2A Starbucks product

 

 

Situation analysis

Starbucks recently encountered damage to its repute when its employee was involved in a racial incident that sparked an upheaval within social media sites. This has impaired its repute and led to a decrease in the number of customers.  As a result, there is a  need for the firm to develop new strategies and measures that will help it gain confidence amongst the prospective consumers , and boost its number of sales.

 

Strengths 

  • Customer loyalty – The corporate has an extended geographical presence in the global market and maintains market shares by approximately 36.7% within the US. It efficiently leverages its brand equity through licensing its brand logo and merchandising its commodities (Sholihah et.al. 2016, p.191). With this position and brand identity, and quality products most of its consumers are loyal.

 

Figure 3A Starbucks Store in Seattle

  • High-quality products- the company prioritizes the quality of its commodities. It avoids the standardization of the quality of its products.

 

Figure 4 Workers at a Starbucks store

Weaknesses

Communication weaknesses – the company’s communication strategies are weak .Consumers require to receive immediate feedback and to be constantly engaged.

Opportunities

  • Technical developments- Starbucks Company has integrated mobile applications for effective customer services.
  • Trained customer service personnel – With efficient work personnel, Starbucks Company has the opportunity to enhance communication with its clients.

Threats

  • Increased competition – the company faces increased competition from companies such as Pete’s Coffee and Dunkin Brands.

 

After extensive research, the circumstances affecting Starbucks Company appear to include:

The attitudes of consumers towards Starbucks shifted from one of convenience and comfort to that which does not enjoy the social aspect of the coffee stores. Consumer relationship and quality were negatively affected after the incident, and the company’s reputation was damaged. Moreover, it lost approximately US$16 million in sales as a result of the incident (Novy-Williams, 2018).In comparison with leading competitors; Starbucks is performing strongly in the following areas:

  • Convenient services
  • Customer focus

Some of the weaknesses of Starbucks Company seem to be:

  • Lack of good communication.
  • Over-reliance on the US markets- most of the stores are situated within US and most of the market shared are derived from the US market.

 

 

Goal

  • To confirm reputation as an exceptional firm.
  • To be identified as the leading  coffee store in the hospitality industry
  • To serve the local community and company stakeholders.
  • To effectively manage any crisis that arises.

Objectives

  • To increase online presence by 40% within 2 years.

The benefits will constitute an increased customer loyalty, a gradual change of individuals’ perspectives regarding the company, and increased acceptance. It will also ensure that it constantly updates its website by including positive messages about itself.

  • To access at least 20 customers to provide positive feedback within the next six months.

More consumers will want to be associated with this recognized brand. The company will receive a consistent flow of clientele, even when a particular crisis is involved.

  • To increase online views by 30% within two months. This will enhance customer focus. Consumers will be able to share their views regarding how they support the company and its services.

Target Audience

The target audience will comprise the consumers, the media, and the entire industry. The Chinese are increasingly appreciating Starbucks products. Since Chinese consumers like to converge in groups, their stores have been designed to accommodate multiple individuals. The Japanese customers have integrated a different approach whereby their coffee stores utilize traditional architectural designs that provide smaller servings and less sweet products than those served in American stores (How Starbucks Adapts to Other Cultures, 2019) . As for the French consumers, there initial speculation was that the company served low-quality premium products. Hence, Starbucks opted to combine the Viennese coffee and a variety of continental items such as red fruitcake that are considered delicacies in the area, in order to attract more French customers.

The company’s target audience will include both men nad women aged between 25 to 40  who are hip, contemporary and wiling to use an amount of money on drinks, more so coffee. In Kazakhstan for example, the company’s largest target market are people of both medium and high income level.  The target population visits the stores for either catching up with friends or for business meetings.

Target media

 

Target media will constitute the utilization of messages and social networks. Social media will attract most young individuals. There will be the use of bloggers and social media influencers, who will pass on messages regarding the advantages of visiting the Starbucks stores.  The need for the influencers is attributed on the high following and influence they command on the platforms.

 

Key messages

  • All customers are treated equally without any discrimination.
  • Partner with other companies within the industry and ensure customers’ needs are considered.

Strategies

  • To develop content to be shared on social platforms.
  • To engage with company clients through online networks.

Tactics

  • Starbucks Company should assess the current situation; develop an inclusive strategy that targets restore its reputation.

First, Starbucks Company should begin by convincing its customers that it is working on managing its reputation. It should then randomly select a few of its customers, and conduct a survey on how it can incorporate particular improvisations to address the situation (Alverez, 2020). So far, platforms, including Twitter, have facilitated the success of the company as they have enabled information-sharing and action-inducing content (Taecharungroj 2017p.552). It should post positive messages demonstrating its accomplishments and how it participates in community development.

  • Immediately publish a Wikipedia article and rebrand itself as a noteworthy company
  • Institute a positive online presence on numerous social platforms constituting Twitter , Face book and Instagram
  • Incorporate crisis planning in order to minimize incidences that may interfere with the company’s reputation.

 

 

  Strategies
Reward loyal customers ·       Develop a loyalty card scheme

·       Provide discounts for loyal consumers

·       Invite loyal customers to try out new company products.

·       Offer purchases and free items to loyal customers.

·       Provide preferential service terms to loyal consumers.

 

 

 

 

Timeline

  June July August Sept
Customers Request customer feedback Update the website Reward loyal consumers  
Media   Have social events Tradeshow planning and implementation TV sponsorship

 

Budget

PR agency costs

Auditing $8,000
Kit development $13,000
Purchase of marketing equipment $15,000
Tradeshow planning and implementation $12,000
Taxes $30,000
Total $78,000

 

Program costs

Updating website $50,000
Rewarding consumers $10,000
 Social events $150,000
TV sponsorship $120,000
Total $280,000

The costs have been acquired from past company openings and the amount of charges that are likely to be incurred.

Messages

Increase the number of customers by 15% between 2020 and 2022.

Receive positive feedback from customers and industry media outlets.

Expand the company to new regions with diverse populations.

 

 

 

 

 

 

 

 

 

Bibliography

Alverez, C., 2020. How to Restore A Business After It Has Gained A Bad Reputation. [Online]   Available at: <https://channels.theinnovationenterprise.com/articles/how-to-restore-a-    business-after-a-bad-reputation> [Accessed 19 June 2020

Kumar, K., 2016. An Analysis on Brand Loyalty: A Case Study on Starbucks.

 Novy-Williams, E., 2018. [Online] Available at: <https://www.bnnbloomberg.ca/starbucks-lost-                 us-16m-in-sales-due-to-racist-incident-1.1085051> [Accessed 17 June 2020].

  1. How Starbucks Adapts To Other Cultures. [Online] Available at: <https://www.daytranslations.com/blog/how-starbucks-expands-abroad/> [Accessed 26 June 2020].

Sholihah, P.I., Ali, M., Ahmed, K. and Prabandari, S.P., 2016. The Strategy of Starbucks and its         Effectiveness on its Operations in China, a SWOT Analysis. Asian Journal of Business      and Management (ISSN: 2321–2802) Volume.

Taecharungroj, V., 2017. Starbucks’ marketing communications strategy on Twitter. Journal of      Marketing Communications, 23(6), pp.552-571.

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