2011 WINTER EXAMINATION

Module Code: MM

Module Title: Marketing Management

Programme(s): MBA / MSc Marketing

Student ID: Seat Number:

Exam Date: Exam Duration:

06 January 2011 3 hours

No. of Pages (including cover sheet): 4

ALLOWABLE MATERIALS
Open Book Examination Non-programmable calculator permitted

INSTRUCTIONS TO CANDIDATES
1. Answer ALL questions. 2. Marks for each question are given in brackets. 3. This exam is worth 50% of the final marks for this module. You are required to achieve a minimum of 40% in this examination to pass the module. 4. All answers must be written in the answer booklet provided.

This paper MUST NOT BE REMOVED from the examination venue

Answer ALL questions

THE COFFEE SHOP MARKET STARBUCKS In some countries, the coffee market has expanded more than threefold since 1995, with a range of coffee outlets on the high streets in main towns, modelling themselves on successful American and Italian-style coffee shops. People can go into the coffee shop and buy one of a range of specialist coffee beverages and enjoy a very relaxing atmosphere to drink their coffee. Consequently, there has been an expansion in the market and a growth in high street coffee houses. In the UK alone there are a range of providers: Costa Coffee Has 250 outlets and plans to have 600 by 2009. It also supplies coffee to low-cost airlines. The company is planning to launch a chain of sandwich style shops that also serve coffee. Coffee Republic This is the largest independent operator in the UK. The company has almost doubled its number of outlets from 36 to 61 in 2000, increasing to 182 in 2001. It has recently hired marketing specialists to develop its brand identity and is seeking to develop its food offer to capture a growing lunchtime trade. Coffee Nero This has 62 outlets in the UK and plans to expand to 300 by 2009. Madisons Has 48 coffee shops under the Madison brand and four under the name of its newly acquired Caf Richoux. The company has developed an Anglicised format that incorporates American style and an Italian coffee offer. It open bars and lounges are designed to appeal to female customers. Starbucks Detailed below. STARBUCKS COFFEE SHOPS Starbucks coffee shops have been operating since 1971 and the company is US based. As a global company, the Starbucks brand is about passion for a quality product, excellent customer service and people. Starbucks has nearly 900 coffee shops in 22 countries outside North America. Internalisation began in 1996 for Starbucks, with the first coffee shop in Tokyo. We have been amazed by the global acceptance and visibility of our brand in all our international markets, says Peter Maslen, President of Starbucks Coffee International. Starbucks purchases and roasts high quality whole bean coffees and sells them along with fresh, richbrewed, Italian-style espresso beverages, a variety of pastries, cakes and coffee-related accessories and equipment (primarily through its company-operated retail stores). In addition to sales through its company-operated retail sales, Starbucks sells primarily whole bean coffees through a specialty sales
UoW/LSBF MM/MBA MSc Marketing/Level 7 Winter 2011 Exam Page 2 of 4

group, a direct response business, supermarkets, and online at starbucks.com. Additionally, Starbucks produces and sells bottled Frappuccino coffee drink and a line of premium ice creams through its joint venture partnerships, and offers a line of innovative premium teas produced by its wholly-owned subsidiary, Tazo Tea. The companys objective is to establish Starbucks as the most recognised and respected brand in the world. To achieve this goal, the company plans to continue to rapidly expand its retail operations, grow its specialty sales and other operations and selectively exploit opportunities to strengthen the Starbucks brand. Coffee shop consumers During the last few years, there has been an increasing trend towards the consumption of healthy food and drinks. This has led to a decrease in coffee consumption, which is considered an unhealthy product, especially among those between 15 and 24 years old. Indeed, 13% of 15-24 year olds do not drink coffee at all. Furthermore, club culture has also made bottled water and juice products more fashionable choices of drink. Mintel research (2005) indicates that the use of coffee shops has become a habit among distinct sections of the public, notably the mobile, affluent professional. Women are particularly attracted to the nonthreatening, singles friendly environment that coffee shops offer. The success of the coffee shops has been based on a youth friendly, inspirational clientele. However, long-term trends show that non-coffee drinking is on the increase among young people. Older consumers have not been specifically targeted, yet these adults are among the most likely to be consumers of specialised coffee products. High growth within the sector indicates that greater diversification is possible to meet as yet unsatisfied consumer demand among these groups. The location of existing coffee shops has become a key factor which influences the way some people choose to visit branded coffee shops. Adults from socio-economic groups A and B are now four times more likely than C2 category to visit branded coffee shops because they value highly a relaxed store design and ambience. You have been appointed as Marketing Consultant specialising in retail marketing to advise Starbucks on their brand. Q1.Conduct an environmental analysis of the marketing environment using SWOT, Porters 5 Forces and PESTLE analytical techniques and discuss the implications of your findings on Starbucks. (40 Marks)

Q2. With reference to an appropriate marketing strategy, explain how Starbucks could expand their business in the next two years.
UoW/LSBF MM/MBA MSc Marketing/Level 7

(30 marks)
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Q3. Recommend how the marketing mix should be used for your chosen growth strategy.

(30 marks)

Total: 100 Marks

END OF QUESTION PAPER

UoW/LSBF MM/MBA MSc Marketing/Level 7

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