Kraft Foods Incorporation is the second largest food company in the world. Starbucks are global consumer products group that tries to broaden the Starbucks experience to consumers outside retail stores (Vickers, 2005). In 1998 Starbucks signed an agreement with Kraft foods to assist in selling Starbucks products in groceries across the United States of America. The two parties have been in the market for an adequate time. Business has been dynamic with each of them accruing benefits from the partnership. The two parties have a written agreement of business partnership up to 2014. Following the agreement, Kraft has built a business of 500 million dollars per year. This shows that the two parties are beneficiaries of the partnership (Vickers, 2005). The two companies have discovered a strategic channel of alliances that will guide the company in selling Starbucks coffee in the United States of America.
Kraft Company has been able to link Starbucks products with several supermarkets in the United States as well as internationally. However, Starbucks has discovered that it can make it on its own. Therefore, the company has chosen to push for an end of the contract or agreement that exists between the two parties. Kraft was not out to support this move. They oversaw decrease in their turnover. Following their past achievement under Kraft Company Starbucks is almost assured it can make it on its own (Vickers, 2005). Several chains of supermarkets have been linked with selling Starbucks’ product in the United States. Good examples of these channels are Wallmart stores, and the A & P supermarkets
At this point, Starbucks may be viewed as the major beneficiary of this channel or agreement. This is because they are the producers of the consumer products while Kraft acts as the marketer. Although the two parties benefit from the agreement, one of them has a highly ranked benefit than the other. As Starbucks claim, if Kraft breached the contract the company would incur a loss of approximately one hundred million dollars as possible sales. Therefore, Kraft influences performance at Starbucks (McCalley, 1992).
To market through Kraft and sell through Wallmart and A & P supermarkets, Starbucks is confident of fetching many customers. Although the Kraft Company has linked it to several other supermarkets as well as many grocery stores in the United States it feels confident in that it cannot lose on these markets even if the contract between these two parties came to an end.
As one of the best food companies in the world, Kraft has won terribly many customers for Starbucks to an extent that it would be hard for Starbucks to make it alone. Specialization is extremely beneficial. Kraft has been in to the market of selling foods to groceries and supermarkets in the United States for a long period. It has not been easy to maneuver and win so many customers. Kraft has ensured timely delivery of coffee products to the stores. It has ensured continued flow of products to Wallmart and A & P supermarkets. Which have been the main points of retailing the coffee. As a business, looking forward to a bright and promising future Starbucks should have thought of making the bond between the two parties stronger (McCalley, 1992).
Marketing is all about understanding the consumer. Once an individual realizes the customer’s taste as well as preferences market will be guaranteed. Kraft has been able to establish itself as a marketer and seller of consumer products in the United States. It has come up with several strategies that have helped it reach terribly many customers within the region and outside. Its partner, Starbucks has thought performance or sales are a guarantee since they are the producers (Gia, 2009). Through a chain of stores Kraft has been able to channel very many products to the...