The following report evaluates the marketing environment for the coffeehouse business, specifically Starbucks. The report will cover a brief background of the company and reasons to why Starbucks has been selected as a center group to display a marketing report. A macro environmental study will demonstrate important possible threats and opportunities for Starbucks. It will also look into further segmentation research, characteristics, views and behaviors within the consumer groups.
Background to Starbuck and Selection Criteria
Starbucks was established in 1971. The global brand is well known throughout the world and now sits in 50 countries, with more than 17,000 stores (Starbucks,2011). In 2010 the international coffee house had revenues of $10.7 billion (business insider,2011), with outstanding revenue Starbucks is recognised as the worlds top coffee retailer. The company has been selected as the author has personal experience of working within the establishment, in the role of a qualified barista. During that time the business remained busy throughout the day, peaking in both the morning and evening, when customers were leaving for work or travelling home. The role came with pressure of continually making a high standard of coffee, whilst attempting to make each product consistent in taste, across the entire company.
The Starbucks Macro Environment
The macro environment is when all external environmental forces can affect how a company operates but which are beyond its control. This can be structured as Political/legal, ecological, socio-cultural, technological and economical. These are also known in short hand as PESTEL. To really understand their market field in which their business is positioned marketers must assess their gap in the market for competition or business opportunities within the macro environment. Many different trends have an impact on an organisation and each is individually considered.
Although Starbucks is currently the worlds leading coffee house, it still needs to stay competitive. Coffee contains a high amount of caffeine that has been proven to lead to health issues, such as; high blood pressure, insomnia, muscle termers and heart disease (mayoclinic,2011). This socio-cultural pressure presents a potential threat to Starbucks, as people may start to reduce their caffeine intake. Leading to a decline in volume sales. Starbucks do offer a decaffeinated version of each product, however many coffee drinkers consume it for ‘kick’ of the caffeine. If health scares continue within the coffee trade Starbucks might find it hard to continue to make large profit margins annually. Currently Starbucks makes most of its trade on coffee, with only a few other products, such as; desserts and quick food like sandwiches and Panini’s. A socio-cultural threat is that coffee may not stay in favor with customers, it could simply be a phase. At the present going to a coffeehouse to catch up with your friends is seen as cool, but how long will this last. Could it be replaced in the future by a different leisure idea or even a different beverage. Is drinking coffee just a latest fashion?
Another socio-cultural effect is simple and uncontrollable. The weather can quite easily affect the sales of coffee. Many people drink hot beverages to keep warm on cold days, however if global warming persists to heat the world up, will the demand in coffee lower. Hypothetically people would want a cold drink or ice cream to cool them down rather than a warm drink on a blistering hot day.
The economical threats of pricing could also have a negative effect on Starbuck’s income, while most people consider Starbucks coffee a luxury good and would pay whatever price is set for it, there is an increasing opinion that Starbucks charges too much. They are also very inflexible in terms of location. For example, Starbucks charges the same price for their products whether you’re in UK or Beijing (ft,2011)....