Chapter 4 - The Marketing Environment

Students getting stuck into books at their local Starbucks in PA

Starbucks caters to a wide variety of people all over the world. From kids who enjoy a delicious hot chocolate to the everyday businessman getting his standard medium roast coffee. The company predominantly targets men and women who are in the workforce typically 9 till 5, who are the informed and well off type demographic to represent Starbucks’ standing as a high class label. Starbucks have come to notice it’s not just that particular demographic they are attracting it is also the younger adults that are widely seen in Starbucks Cafes. Approximately 45 percent adults are in the age range of 25 to 50 years with typically higher income proficient careers. Starbucks entices those who with their modern, urban designs and café feel. 40 percent of customers are thee young adults in the age 18 to 25 who are generally students who’ve been see to use it as study using the free facilities such as the Wi-Fi, meet up with friends. The younger generation and Starbucks’ main customers who take over roughly 15% of the target segment who are more or less attracted to Starbucks cabinet food and milkshakes, whom are accompanied by a parent which also use at as place for homework or general chit chat. Moreover Starbucks serves to diverse range of customers whose way of life can really be categorized as ones professional career does not reflect that.

Chapter 3 – Ethics and Social Responsibility

Ethics is defined as what is right and wrong. Business ethics relates to an individual’s or company’s decision that society defines as what is right and wrong. In regards to Starbucks, the mission statement show’s that company’s work and business ethics is based on “respect and dignity” not only to the stockholders, partners and employees but also the community.  

Because of Starbucks worldwide popularity the company must preserve a positive image, to care about the community and the environment! Those are positive standpoints that define the company’s self-portrayal.

With the coffee industry coming out of a major crisis coffee farmers had been going out of business, this didn’t just become a problem for a farmers it became a social problem. The problems that they incur are that with over production. Brazil at one point use to produce 25-30million bags and coffee in the last few years they’ve had the ability to ring up over 50milion bags. Vietnam, 20 years ago they didn’t produce any coffee at all, they have become the 2nd largest producer in the world in 2010. It’s not the coffee Starbucks buy that affects Starbucks, it's the coffee they buy that affects farmers globally. The dynamics of supply and demand played out in a way that has been very dramatic, consequently negative for farmers. What Starbucks have stepped in to do is come out with a buying program called café practices that stand for Coffee and Farmer Equity practices. Working alongside conservational international, and other NGO’s they have worked out a way of buying coffee that is sustainable for the future and can allow farmers to stay in business. It involves Starbucks paying a fair price for their coffee, as well as economic transparency; they know and is audited by a third party what that farmer was paid for the coffee. Starbucks began purchasing in a way that is socially responsible and by that the farmer pickers; migrant pickers that work on the farm are paid a fair wage, as well as health and dental care. In an environmental friendly way Starbucks opposed to famers cutting down trees to plant more, they wanted buffer zones between streams where wastewater is used in the coffee mills. Starbucks are well aware what is happening in the environment. As a result of that, farmers can not only earn a premium price for their coffee, they can earn a premium price on top of what they paid and help them make these changes which Starbucks is willing to pay for.

Keeping in touch with new farmers in way or another on a yearly basis but is imperative to have good client rapport. Since 2004 Starbucks have opened farmer customer support centers in Costa Rica, Rwanda in 2009, Tanzania in 2011 so they are on ground in producing countries. Starbucks plans to eventually have an agronomist in each country in Central America. The office for the agronomist in central America is as of now a four wheel drive and a laptop, so they are on multiple farms every day which was they want. Incorporating Starbucks presence there talking to them about their growing practices, learning from them and sharing with them. To them that’s where the collaboration in the equity peace comes in café practices. They believe that profitability and social responsibility are mutually exclusive they work hand in hand and that’s what Starbucks demonstrates.

Chapter 2 - Strategic Planning for Competitive Advantage

"IT'S NOT JUST COFFEE. IT'S STARBUCKS"

Starbucks separates themselves from other coffee houses with their one of a kind selling point which is a lavish experience that goes above and beyond a cup of coffee. Starbucks distinctly positions themselves as an upscale brand that offers more than just a coffee. It targets a wide demographic as it a place "to be seen" from office workers to students, cultural and social classes that gather and have a quality coffee in a cozy and relaxed atmosphere. Starbucks has left any form of competitors in the dust by identifying themselves as prestigious and valuable, with product and service differentiation thus creates a competitive advantage.

To provide this lavish experience their marketing plan involves a homely feel to customers who feel invited to make a purchase. Starbucks takes a great amount of care right as you set foot inside you a greeted with an ambient environment, comfortable furniture, relaxing jazz music and other features such as wireless internet, handicapped access also free song, and application gift cards.

Furthermore, Starbucks is on the go seeking various strategic alternatives. The coffee house is constantly being updated with promotions for example seasonal beverages; Caramel Brulée. Other promotions include prepaid member cards with levels of Green and Gold, an incentive that awards complementary drinks.

The fact that Starbucks is the largest coffee brand in the international market, benefits the company in terms of competition. The company has been able to convince their customers that Starbucks is just more than coffee. Starbucks customers throughly believe they offer more than just a great cup of coffee, it is recognized as a luxury coffee that gives customers a feeling of prodigality as they go about their day holding a Starbucks beverage.