Assignment on Sales and Distribution

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Starbucks Experience and
Social Media

Being a barista on the internet

A. Introduction

In the realm of global economic crisis, Starbucks had started to experience losing revenue and shifting market segment from High income, well-educated, white-collar professionals between the ages of 25 and 45 to younger generation. The newer customers were younger, less well-educated, and in a lower income bracket- than their more established customers- had less frequent visits and a different perception of Starbucks. Starbucks had lost the connection between satisfying customers and growing the business under threat of global economic crisis. This was the big concern which had been expressed that Starbucks lost communication between market segments and their relation with each other. Starbucks experience depends on translation of their confusion to the customers by using online social media tools to involve in the community and search out, get advice for new product offers and build strong relationship over the social media to recover the Starbucks experience as it was in store environment and it will be always. In the following chart shows the revenue performance during different periods from 2008 to 2010.

REVENUE|
Periods| 2008| 2009| 2010|
December| 2767.6| 2615.2| 2722.7|
March| 2526.0| 2333.3| |
June| 2574.0| 2403.9| |
September| 2515.4| 2422.2| |
Totals| 10383.0| 9774.6| |
Comparable Store Sales Growth(Company-Operated Stores Open 13 Months or Longer) (LLP)|

B.Situation Analysis (SWOT)
Strengths
* Starbucks one of the most recognized and respected brands in the world * Innovative and willing to spend on R/D
* Premier roaster and retailer of specialty coffee
* Good relationships with coffee suppliers
* Value employees and supports them with training and education * The product is strongly differentiated from those of rivals * Good supply chain management
* Better product quality relative to rivals
* Well-developed IT source and management

Weaknesses
* Having more expensive price than the competitors
* Excessive focus to keep the growth rate is constant
* Bad management of company operated retail store
* Becoming own rival at same neighborhood
* Revenue loose and Increasing shareholders dilutes their interest * They have expanded too quickly, and have already saturated the US market * Firm employee policies and applications on Baristas

Opportunities
* Expansion into European, Asian and Latin American markets * Distribution agreements, such as hotels, airlines, and office coffee suppliers * Use supermarkets as a way of expanding into international markets * Improve on perception of instant and decaffeinated coffee to expand that market share * Expanding the company’s product line to meet a broader range of customer needs * Joint ventures that can expand the firm’s market coverage or boost its competitive capability

Threats
* The coffee market is oversupplied
* Cost of coffee beans is on the rise
* Supermarkets threaten whole bean sales
* Immediate competition from food restaurants etc. Dunkin' Donuts and McDonalds * Consumers trend toward more healthful fare
* Loss of sales to substitute products
* Restrictions trade policies on the part of foreign government

C. Target Segment Identification

| IMAGEYoung customers| GOURMET COFFEEAdult focused|
Geographic| downtown and suburban retail centers, office buildings and university campuses| high-traffic, high-visibility Urban, rural and off highway locations, shopping malls| Demographic| College grad, young, tech-savvy customers, less well-educated, lower income, age 18-25Male and female from all races| married couples with children, well educated, age 25-45professional with high income|...
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