marketing plan for starbucks星巴克市场分析

1、Project 3 The growth strategy of the companyStarbucks in India“We arent in the coffee business,serving people,We are in the people business, serving coffee Howard Schultz CEO MC1y2, 2nd Semester AP Degree Marketing Management 2010Counsellor:GitteOvesenBeierholmGroup members: Cristina Alexandra Grind

2、ei, AlishaKhatri, Yunjing Lu,List of ContentsIntroduction. 3Problem formulation.3Methodology and Limitation.3Macro and micro Analysis.44.1 Country profile.44.2Company profile54.3 FinalDecision.7Recommendation.75.1 Entry mode.75.2 Segmentation and target market.95.3 Suggested position and location.10

3、5.4Suggested Value chain.11Conclusion.12Reference.13Appendix .14Introduction:Starbucks Corporation has been the most successful coffee chain in the past years. The company has focused on creating a network of stores in US while opening new locations around the world. Nowadays, the recession is effec

4、ting the economy of the entire world badly, no exception for the coffee market. Starbucks, as the coffee chain giant, is seeking for a new market in order to keep the leader position in the industry. Meanwhile, at the other side of the world, in India, a country known for the tea consumption, coffee

5、 is becoming more and more popular. According to Euromonitor International, in 2009, the total volume of coffee in the Indianmarket was 44,209.8 tones, the fifth largest coffee consumption country in the world.So is India a possible future market for Starbucks?Problem formulation:Starbucks is consid

6、ering going to India.How can Starbucks enter the Indianmarket?Is India an attractive market for Starbucks?What could be the best entry mode for Starbucks in India?Limitation and Methodology:The limitations of the project are the page limit and the restriction in contacting the company.Regarding the

7、company data, the limitation is in focusing on the entire product range of Starbucks, so as a consequence we have choose to focus only on the two main products: coffee and tea.We have applied secondary data sources/quantitative data sources. The research method was the desk research. The theories us

8、ed in the project are: the micro and macro analysis, the SWOT analysis, the entry mode analysis, segmentation and positioning, target market and value chain. We have used the theories to create an overview of the subject field and apply it for solving the project problem formulation.Macro and micro

9、analysis4.1 Country profile Economy In 1991, the Indian economy experienced a dramatically growth after the government liberalized number of industries open to foreign investment, loosened approval requirements and allowed majority foreign equity ownership Fact book CIA . The economy hada growth rat

10、e of 5-7% in average since 1991 till 2007, butan industrial slowdown early in 2008, followed by the global financial crisis, led annual GDP growth to slow to 6.1% in 2009 (Appendix 1), but it is still second highest growth in the world among major economies. Fact book CIA Income The income per capit

11、a of Indians increased by 14.2% in 2006-2007 Data monitor/ Database/ bon online. Per capita income at current prices was estimated at Rs29,642 in 2006-2007 Euromonitor/ Database/ bon online, compared to Rs25,956 Euromonitor/ Datebase/ bon online for the previous year. As a result of the increase in

12、total income, the mean annual disposable income also increased by almost 150% fro Data monitor/ Database/ bon online Euromonitor/ Database/ bon online Euromonitor/ Datebase/ bon onlineGovernment and laws The introduction of VAT in India has been a key development. In April 2005, it was the vat was i

13、mplemented in at a standard rate of 12.5% Euromonitor/ Database / bon online. This new system Businesses will consequently have to raise prices to compensate for higher production costs and this will affect consumer spen Euromonitor/ Database / bon onlineCompetitive landscapeInternational companies

14、such as Nestle India and Hindustan Unilever are the leaders in the coffee industry in India. Domestic players such as Tata Coffee or Barista Caffee are active in fresh ground coffee. No other domestic player was able to become established as an Indian brand with their presence restricted to the sout

15、hern states in India.Geographics and Demographics India is the second most populated country in the world with a population of about 1.03 billion people. The age structure of India looks like this: 0-14 years: 30.5% (male 187,197,389/female 165,285,592)15-64 years: 64.3% (male 384,131,994/female 359

16、,795,835)65 years and over: 5.2% (male 28,816,115/female 31,670,841) (2009 est.)“Geographically speaking, India is located in South Asia in the EasternHemisphere. There are 25 states andNew Delhi is the capital. The national language is Hindi and about 83% of the population speaks it. Otherthan that

17、, India has 18 official languages primarily associated with the different states” Wikipedia Wikipedia 4.2 Company profile Starbucks was established in 1971, Inspired by coffee bars in Milan, Italy, Howard Schultz The CEO of Starbucks wanted to introduce the coffee bar culture to America. Starbucks m

18、ission statement is to “establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow” The CEO of StarbucksExpansionStarbucks has grown at incredible rate since the opening of its first coffee bar. Now Starbucks has more t

19、han 16,000 retail outlets in more than 50 countries. Starbucks owns more than 8,500 of its outlets, while licensees and franchisees operate more than 6,500 units worldwide, primarily in shopping centers and airports.Starbucks specializes in quality coffee and other related beverages. “They sell qual

20、ity coffee, Italian-style espresso beverages, cold blended beverages and complementary food items, a selection of premium teas and coffee related accessories and equipment” Business description of Starbucks: Business description of Starbucks: DatamonitorSwot analysisThe Starbucks brand gives the com

21、pany a distinct competitive advantage over lesser known coffee brands. However, Starbuckss business is highly sensitive to changes in customer traffic, and the current economic downturn would put downward pressure on the companys margins. Therefore we need to analyze the companys performance, both i

22、nternal and external. An excellent tool for that is SWOT. (Appendix 2)Current financial situation The general financial performance for Starbucks in 2008 was declining from previous years. The company recorded revenues of $10,383 million. Although the sale was increased in the last 4 years, the net

23、profit income has decreased with 53.1 percent over 2007 Starbucks annual report/ Starbucks annual report/ Year2008200720062005Sales10,383,0009,411,4977,786,9426,369,300Net Income315,500672,638564,259494,467Starbucks operates in three segments: the US, international and global consumer products group

24、. However, the company reported its revenues by product type in 2008. The Four Categories are:BeverageFoodCoffee-making equipmentand otherWhole bean coffees64.2 %14.5%11.8%9.5During the year 2008, the beverage division recorded revenues of $6,663.3 million, an increase of 10.5% over 2007.The food di

25、vision recorded revenues of $1,511.7 million in 2008, an increase of 13.4% over 2007.The coffee-making equipment and other division recorded revenues of $1,220.2 million in 2008 an increase of 7.4% over 2007 Data montior/ database. The whole bean coffees division recorded revenues of $987.8 million

26、in 2008, an increase of 8.2% over Data montior/ databaseGlobal ResponsibilityStarbucks is committed to being a deeply responsible company in the communities where it does business aroundthe world. The Companys focus is on ethically sourcing high-quality coffee, reducing its environmental impactsand

27、contributing positively to communities. Starbucks Global Responsibility strategy and commitments are integralto the Companys overall business strategy. As a result, Starbucks believes it delivers benefits to the Company andits stakeholders, including employees, business partners, customers, supplier

28、s, shareholders, community membersand others. 4.3 FinalDecisionConsidering India a very attractive and growing market and the analysis of the country and company profile, we have decided that Starbucks should enter the Indian market. We will analyze furthermore the strategies Starbucks should apply

29、in order to enter the Indian market.Recommendation5.1 Entry mode Starbucks international strategy adapts to different markets to satisfyneeds and requirements from every market, respecting its cultures and traditions. In order to enter Indian market, we are going to use the Root entry mode (Appendix

30、 4). The model is divided in four groups: Internal, external factors, desired mode characteristics and transaction- specific behavior. Under the four groups there are 16 factors.We have decided to only look at most relevant factors for Starbucks, which are international experience, product different

31、iation advantage, intensity of competitionand Market potential.Market potential: India has become one of the most exciting economies in the world with a huge increase in foreign investment and consumers who are willing to spend and spend. Due to massive outsourcing on the part of foreign companies e

32、specially from the United States, educated Indians are now presented with exciting career opportunities, excellent pay, and the confidence to spend more money. Time magazine reports that these new consumers command $10.5 billion in cash to burn. There could not be a more suitable time for the Starbu

33、cks to enter the Indian market. International experience:Starbucks is operating in more than 16000 locations in over 50 countries. Starbucks uses three entry modes that are joint venture, licensing and wholly owned subsidiaries.Product differentiation advantage:Starbuck should keep focusing on high-

34、quality, because for our target group, price is not the most important thing which they might concern, a cup of fantastic coffee and a relaxing environment will impress them much more than a low-price. Starbucks alsoinvests in extensive research and development efforts to develop new flavors, blends

35、 or even roast fusions.Intensity of competition:India coffee market is a growing market with large potentials, and because of that, it attracts lot of companies to enter, so the competition in the market is quite intense. The major competition for Starbucks in India at the moment is the Barista Coff

36、ee Co., which is an existing coffee shop branch in India, but Starbucks is expected to gain its market share for several reasons. The international popularity of the Starbucks brand will help the company step into the country.Suggestion:Based on the analysis we made, we suggest Starbucks should appl

37、y joint venture. There are three main reasons. First, Starbuckslacked knowledge of the Indianmarket, so the company needs a partner who provides itcountry specific knowledge. Besides, Starbucks should have a fast expansion in India after the first test coffee housessuccess ,so they need aninternatio

38、nal strategy that enabled its internationalization in a short period of time, the wholly-owned subsidiary strategy was unsuitable. Lastly, the Indian market is growing fast with several significantcompetitors ，Starbucks needs an entry mode that allowed higher control in order toface the competitive

39、situation. Therefore, Starbucks should chose joint venture as entrymode.5.2 Segmentation and target groupProfile:Age: under 16, 16-25, 25-35, 35-45,over 50Social class: upper, middle, skilled worker, unwagedBehavioralBenefits sought:low-cost, low-calories, health-oriented, taste-oriented, environmen

40、t orientedPurchase frequency: occasionally, loyal, during tourPsychographic:Geograohic: urban, countryTarget group:Since Starbucks has a wide product range, which includes hot drinks like coffee, tea, cold drinks like Frappuccino, coffee beans, hot and cold sandwiches, pastry and snacks, and the tar

41、get group varies between different products, for instance, tea is mainly consumed by the health-focused people while Frappuccino is trying to catch the young people who value the taste most. However, because of the words limits, we will just focus on Starbucks main productcoffee.The target group in

42、India market is the young both male and female from the ages of 16-35 which come from middle class to upper middle classpopulation. Thismarket is well educated and gourmet. The geographical position of the target market isthe consumers who live or work in the vicinity of the proposed locations for t

43、he Starbucks Coffee shops. The secondary target markets are the touristsin the areas. Tourists will recognize Starbucks, as it is a multinationalcompany, as most tourists in India come from the countries of U.S., England,Germany, and Japan. This market will also fall in the middle to upper middlecla

44、ss population and will find the Starbucks India prices relatively cheap.5.3 Suggested Position and locationStarbucks coffee shops should be located in centre urban, near to center locations, technology companies, major tourist hot spots, collegesanduniversities, and shopping centers, where are near

45、the population centre, so the target group can get Starbucks easily.Suggest location: New Delhi as the capital city and the centre of economy, culture and polity of India, would be the first choice for Starbucks to launch. The Starbucks in New Delhi should be located in Connaught Place, alarge comme

46、rcial shopping area in New Delhi. Most of the call centers and bigcompanies are also in the Connaught Circle. New Delhi is the nearest big cityto the world famous TajMahal, therefore also being the popular place fortourists from all over the world. 5.4 Suggested value chainInbound Logistic:The coffe

47、e beans and tea will be bought from local Indian farmers in order tosupport the local agricultural economy, save money in transportation and avoid tariffs. But high-quality should be ensured to maintain Starbucks brand name. These goods will then be transported to the Starbucksroasting plant located

48、 near the New Deli via India vast and efficient railway system.(see appendix3) Equipment and other necessarysupplies will be shipped from the United State. Operation: Starbucks can use a local partner to help it recruit talented employees, set up supplier relationships, locate suitable store sites.

49、Starbucks should also hire regional marketing specialistwho will handle the laws and customs for Starbucks.Outbound logistic: There are 3 ways the Starbucks products can be reachedby the customer:1. The customer can get the fresh and high quality coffee at their retails stores.2. Starbucks cansells

50、their product in major restaurants, United Airlines and other specialty accounts that do not fall under the retail business customer.3.Customerscan order from the internet or the mails.Marketing and sales:Types of available media for marketing purposes are in India are very similar to those ofthe Un

51、ited States, which include everything from newspaper advertising to television ads. The promotion for the store has to be very focused on our target markets. Billboardadvertising on the roads leading to the store locations is a good way to increaseawareness of the locations. Direct mail advertising

52、with promotional coupons will beused to reach the homes of the target market. Sales brochures offering delivery serviceswill be sent to the local call centers and big companies.Service:Starbucks must customize their menu to fit the tastes of theIndians. A new menu will be formulated after several mo

53、nths of research anddevelopment. There are some common tastes preferences of the Indians known already.For example, Indians tend to take more cream in their coffee. Also, the skim milk optionwill not be offered in India because dieting is not a commonly accepted practice in thecountry. Indians will

54、feel that they are being cheated out of their money if skim milk isput in their beverages. Indians also like spices in their tea and coffee, especially gingerand black clove. One of Indias favorite fruit flavors in mango, and in fact the mango isIndias national fruit.Administration:Starbucks India w

55、ill be a privately incorporated business with horizontal organization.Each store may have a manager and three to five employees that will rotate shiftsdepending on the rush during the day. Starbucks believes in an open and friendly workenvironment and all employees of Starbucks refer to each other a

56、s partners.ConclusionThe main purpose of our project is to find out if Indian market is attractive for starbucks and how could Starbucks enter it. From the country profile and company profile we made, it shows that India is a very attractive, potential market for Starbucks, because of the raising co

57、ffee consumption and the growing market.On the other side, Starbucks has plenty international experience and their current capability is perfectly suitable to expend business to Indiabased on relevant theories and analysis tools, we made a marking plan for Starbucks which includes a target group (age between 16-35) in Indian market, an efficient valuechain, a suitable entry mode (joint venture) and a suggested location (New Delhi) for the first test coffee house.Reference HYP