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Business report
Starbucks
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Tutor’s name: Mr. Nizar
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TABLE OF CONTENTS PAGE
EXECUTIVE SUMMARY
1. INTRODUCTION
1.1 Purpose 5
1.2 Scope 5
1.3 Limitations 5
1.4 Assumptions 5
1.5 Methodology 6
1.6 Background 6
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2. IDENTIFICATION OF CURRENT MARKET SITUATION
3. SPECIFIC OFFER
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3.2.2.1 Brand 11
3.2.2.2 Packaging 12
4. TARGET SEGMENT 14
4.1 Characteristics 14
6. CONCLUSION 17
7 RECOMMNEDATIONS 18
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8 REFERNCE LIST 19-20
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Executive Summary
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The purpose of this report is to review the appropriateness of the current offer of Starbucks in
Singapore offer for the target segment as well as to relate the marketing concepts and theories to
Starbucks was established in 1971, now it is the world’s largest specialist coffee retailer in
purchasing high quality beans and selling them to the consumer market. Starbucks vision is to be
the most recognized and respected brand of coffee in the world. Starbucks faces competition
from other manufacturers and suppliers who are also producing high quality beans and catering
to the consumers. Some of their competitors are Spinelli and The Coffee Club. In order to carry
out this report, sources of information such as textbooks, journals and websites information are
being used.
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In this report, the three levels of product are core, actual and augmented are being discussed at
the same time, analysis on of how Starbucks branding, packaging, labelling, and identification.
The target segment which is dividing the market into different groups and to cater to them,
different products or marketing mix are proposed. Furthermore the different characteristics,
Starbucks current offer of the beverages products are designed to satisfy the needs and wants of
the target segment. For example, Starbucks has different categories of beverages such as brewed
coffees, frappuccino and tazo tea to cater to the different market segment. The analysis of the
current offer is also given, most importantly is about retaining the customers instead of attracting
new customers as attracting new customers needs more cost. However, both are important.
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In conclusion of the report, the three levels of offer; core, actual and augmented and the
identification of target segment shows how to be aware of their competitors and their goals to
face the competitive situation effectively. Thus recommendations are like changing of packaging
and producing more variety of coffee with unique taste should be implemented to retain and
10 Introduction
1.1 Purpose
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The purpose of this report is to review the suitability of the current offer of
Starbucks coffee products for Singapore offer for the target segment as well as
to relate the marketing concepts and theories to the current target segment
1.2 Scope
description of specific offer with reference to the three levels of offer, brand,
characteristics and the needs and wants in relation to the product category.
Recommendations are also given for the development of the current offer.
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1.3 Limitations
The limitations in this report were extreme, relating mainly that the report is
1.4 Assumptions
In this report, Starbucks coffee products are only based on Singapore’s market.
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1.5 Methodology
1.6 Background
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Starbucks Coffee Company was founded in 1971 by three coffee aficionados.
Starbucks, named after the coffee-loving first mate in Moby Dick, opened its
continue to stay on as one of the leading specialty coffee retailer, for all stages
and all ages by ensuring they are using the highest quality coffee. At the same
time, it is all about the Starbucks experience, the atmosphere and the place that
is a refuge for most people to get away from everyday stresses. Satisfaction
and valuable are the most upmost importance in our products thus all products
consumers.
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For the industry background in Singapore, the market for Starbucks coffee is
quite huge. This is because it consist both local and non-local manufacturers
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20 Identification of current market situation
“Market is defined as the set of all actual and potential buyers of a product”
(Kotler, Brown, Adam, Burton & Armstrong, 2007, p. 11). In the case of
Starbucks, this offer belongs to the Singapore market which is available for the
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A consumer market is defined as “individuals and households that buy goods
165). Consumer purchase Starbucks coffee for their own consumption, hence
Cold Storage and Market Place where “organizations that buy goods and
services in order to resell them at a profit” (Kotler et al. 2007, p. 165). These
are supermarkets that resell Starbucks coffeeto the consumer market in order
to make a profit.
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2.2 Product Category
Product covers both tangible goods and intangible services. For the tangible
goods, Starbucks offers a wide variety of coffee to the consumer market. In the
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Fundamentally, the more intangible or pure services such as those provided by
Starbucks can only be defined using process descriptions rather than tangible
coffee are created with special recipe to suit the taste of every individual.
Hence, teenagers who purchase Starbucks coffee products will enjoy both
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2.3 Identification of Competitors
goals to face the competitive situation effectively. Some major competitors are
Spinelli is the company that beliefs in buying, roasting and selling the finest
coffee, hence their coffee products are made of the best quality. Seven outlets
were opened in Singapore’s central business district by the fall of 1997, with
up to forty locations targeted for the region by the year 2000. In addition,
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Asian Market. Spinelli brings to Asia years of experience in sourcing,
producing and selling premium coffee drinks and whole bean coffee.
The Coffee Club was founded in 1991, with its first outlet in Holland Village.
There are thirty seven variations and the best attraction is the Iced Mocha
Vanilla—Macciato coffee and milk topped with vanilla ice cream and a drizzle
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30 Specific Offer
Kotler and others (2007) argued that there are altogether four type of offer;
product, place, price and promotion. These four different offers, Starbucks
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First product, Starbucks brewed coffee and Starbucks tazo tea are the two
products. Both products are completely different and it caters to different kinds
of consumer. Consumers who do not drink coffee are still able to get a drink in
Starbucks as it offers non caffeine drinks. These are designed to satisfy the
Starbucks coffees are located in city area and sold at the most convenient
places like supermarkets, to ensure that consumers do not have to worry about
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Third is price. Starbucks products are reasonably priced while offering good
targeted towards general publics, thus their pricing are generally acceptable to
doing this, Starbucks are trying to attract new customers to try out their
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3.2 Three levels of Offer
The first level is known as the core product, this is the underlying
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3.2.2 Actual Product
3.2.2.1 Brand
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major competitors. Branding enables the coffee to build
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3.2.2.2 Packaging
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contributes to a customers’ sense of pleasure when
3.2.2.3 Labelling
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products from other brands easily. Meanwhile, labelling
Fitchett, 2009).
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competitors (Mc Coll et al. 2000). Johnson & Johnson’s augmented
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40 Target Segment
Target market is a set of buyers sharing common needs or characteristics which the
company decides to serve. Cahill (1997) supports this as he mentioned a target market
is at its most basic, simply the market or submarket (such as a segment) at which the
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firm aims its marketing messages. In the case of Starbucksproducts, it refer to a
segment, using marketing mixes adopted for each segment (Bovee, Houston & Thill,
1995).
4.1 Characteristics
Starbuckshas two target segments mainly coming from the demographic and
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For Starbucks, they use multivariate demographic segmentation as no single
demographic variable is able to capture the different needs and wants of the
buyers. It includes age and life cycle stage and income segments.
Starbucks products are being produced for teenagers and adults, who have a
depending on the size of the coffee. By pricing the price as comparable as its
competitor is because Starbucks are targeting teenagers and adults with high
In the minds of the consumers who purchase Baby Hair Care products, the
benefits that they seek for to satisfy their desire for their addiction for coffees.
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Thus, buying Starbucks coffee is due to habit to crave their addiction for
coffees. Since Starbucks are able to offer coffee at such a comparable price, it
According to Kotler et al. (2007) needs are states of felt deprivation and the
wants are the form taken by human needs as they are shaped by culture and
individual personality. From the customer perspective, the basic needs are to
satisfy consumers craving for coffees. As for their want, it is to choose a high
quality coffee to satisfy their desire, for example, a good quality coffee that is
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made from the highest quality of coffee beans. This is Starbucks most popular
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50 Analysis of Current Offer
perceptions meet or exceed customer expectations (Assael, Reed & Patton, 1996).
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Hence, marketers need to understand and really appreciate the value of customers,
Base on interpretations, the target segment needs and wants are only being satisfied
partially.
The current offer for Price, Place, Product is being satisfied. Due to the reason that,
Starbucks products are being priced reasonably and their pricing is lower than their
competitors. Meanwhile, Starbucks this brand name can be seen commonly in public
areas, which mean that the products can be bought conveniently. Starbucks has
coffees ranging from brewed coffees to frappucino and for those who non caffeine
drinks they have tazo tea which gives consumer a wide variety of selection.
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However, Promotion is not being satisfied. Starbucks products are hardly seen having
any promotions. Regular customers might be dissatisfied as they might think that their
support for Starbucks is not being recognised as in a way they are not being rewarded
by having freebies or discount even though supporting them for a period of time.
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60 Conclusion
quality. Starbucks target segment is teenagers and adults. Starbuck faces competition
from other manufacturers and suppliers in coffee products which offers products with
big similarities. Some of their competitors are Spinelli and The Coffee Club.
The three levels of offer; core, actual and augmented and the identification of target
segment shows how to be aware of their competitors and their goals to face the
competitive situation effectively. At the same time, the discussion on target segment is
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being analysed to help Starbucks to maximise their profit by understand their
This report also link about the importance of customer satisfaction and the current
offer together, thus some recommendations are also given to improve on the current
However, this report has several limitations. As this report is only base on Singapore’s
market, thus some of the marketing theories used may not be relevant to Starbucks in
other countries. Secondly, this report might not be accurate as it does not foresee the
problems ahead of the coming years. Thus, there must be a frequent update of
information regularly.
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70 Recommendation
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Recommendations Implementations
Produce high quality As Starbucks products are well known for serving coffee,
satisfaction.
Offering more Promotions Starbucks products are hardly on promotions, for example
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more teenagers and adults to try out their products, at the
Starbucks.
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Reference list
Avi, S., Elliott, R. & Fitchett, J.A. (2009) “Identity, consumption and narratives of socialization”,
Assael, H., Reed, P. & Patton, M. (1996), Marketing: Principles and strategies, Harcourt brace,
London.
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Bovee, C.L., Houston, M.J. & Thill, J.V. (1995), Marketing, 2nd edn, McGraw-Hill Inc, London.
Cahill, D.J. (1997), “Target marketing and segmentation: valid and useful tools for marketing”,
Ezeh, C. & Harris, L.C. (2007), “Servicescape research: a review and a research agenda”, The
Kotler, P., Brown, L., Adam, S., Burton, S. & Armstrong, G. (2007), Marketing, 7th edn, Prentice
Hall, Australia.
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Lindsay, D. (1997), "Shaped to sell: package innovation can boost revenue, decrease cost and
Mc Coll, R., Callaghan, B. & Palmer, A (2000), Services Marketing: A Managerial Perspective,
< http://www.starbucks.com.sg/>
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Spinelli Coffee Company revised 2008, viewed 10 August. 2009,
< http://www.spinellicoffee.com/>
< http://www.coffeeclubworld.com/>
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