Marketing Audit Starbucks
Marketing Audit Starbucks Stores
R. J. Yung
Marketing Management
March 13, 2006
Executive Summary Since its foundation in 1971, Starbucks has been working uncompromisingly to achieve the company objective of becoming the world's leading coffee brand. Having gone through various stages of growing pain, today the Company is operating with over 10,000 stores in 37 countries. Starbucks' success was mostly a direct result of its aggressive expansion plan, that consequently turned the Starbucks coffee beverages into a most familiar and popular world-leading brand. Although Starbucks has been successful over the past 34 years, there are some potential drawbacks as identified on this Marketing Audit that might warrant some careful considerations. The first finding is Starbucks' rather higher pricing strategy compared to its direct competitors such as Dunkin' Donuts. Although it may be good to maintain product prestige with a higher price tag, however, the reality is that not every average consumer can afford to spend over $50 in coffee drinks per month. Therefore the high prices may discourage customers from returning. The first impression may be the last impression. It may be easy in discovering new markets and new customers, but maintaining customer loyalty is not as easy. Thus the Marketing Audit recommends that Starbucks should consider price reduction strategies in lowering the prices to a more appropriate level for all consumers. A second noticeable finding is Starbucks' market concentration of mostly active young adults. This may not be the Company's primary focus, but the perception seems to be the case. This Marketing Audit believes that the older adults such as those retirees, can be developed into a bigger market segment with appropriate offering of products and services. Thus the Marketing Audit recommends Starbucks to look into the potential of developing this market segment, perhaps with a different coffee shop environment that is tailored to
R. J. Yung
Marketing Management
March 13, 2006
Executive Summary Since its foundation in 1971, Starbucks has been working uncompromisingly to achieve the company objective of becoming the world's leading coffee brand. Having gone through various stages of growing pain, today the Company is operating with over 10,000 stores in 37 countries. Starbucks' success was mostly a direct result of its aggressive expansion plan, that consequently turned the Starbucks coffee beverages into a most familiar and popular world-leading brand. Although Starbucks has been successful over the past 34 years, there are some potential drawbacks as identified on this Marketing Audit that might warrant some careful considerations. The first finding is Starbucks' rather higher pricing strategy compared to its direct competitors such as Dunkin' Donuts. Although it may be good to maintain product prestige with a higher price tag, however, the reality is that not every average consumer can afford to spend over $50 in coffee drinks per month. Therefore the high prices may discourage customers from returning. The first impression may be the last impression. It may be easy in discovering new markets and new customers, but maintaining customer loyalty is not as easy. Thus the Marketing Audit recommends that Starbucks should consider price reduction strategies in lowering the prices to a more appropriate level for all consumers. A second noticeable finding is Starbucks' market concentration of mostly active young adults. This may not be the Company's primary focus, but the perception seems to be the case. This Marketing Audit believes that the older adults such as those retirees, can be developed into a bigger market segment with appropriate offering of products and services. Thus the Marketing Audit recommends Starbucks to look into the potential of developing this market segment, perhaps with a different coffee shop environment that is tailored to