STARBUCKS

DATABASE MARKETING ASSIGNMENT

JUHI

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STARBUCKS CANADA

STARBUCKS CANADA
Company Analysis:
The Starbucks Story
Our story began in 1971. Back then we were a roaster and retailer of whole bean
and ground coffee, tea and spices with a single store in Seattles Pike Place Market.
Today, we are privileged to welcome millions of customers through our doors every
day, in more than 17,000 locations in over 50 countries.
Folklore
Starbucks is named after the first mate in Herman Melvilles Moby Dick. Our logo is
also inspired by the sea featuring a twin tailed siren from Greek mythology.
Starbucks Mission
Our mission: to inspire and nurture the human spirit one person, one cup and one
neighborhood at a time.
Our Coffee
Weve always believed in serving the best coffee possible. It's our goal for all of our
coffee to be grown under the highest standards of quality, using ethical sourcing
practices. Our coffee buyers personally travel to coffee farms in Latin America,
Africa and Asia to select the highest quality arabica beans. Once these quality
beans arrive at our roasting plants, Starbucks experts bring out the balance and rich
flavor of the beans through the signature Starbucks Roast.
Our Stores
Our stores are a welcoming third place for meeting friends and family, enjoying a
quiet moment alone with a book or simply finding a familiar place in a new city. Total
stores: 17,009 (as of January 2, 2011) 8,870 Companyowned 8,139 Licensed store
Operating in more than 50 countries Argentina, Aruba, Australia, Austria, Bahamas,
Bahrain, Belgium, Brazil, Bulgaria, Canada, Chile, China, Cyprus, Czech Republic,
Denmark, Egypt, El Salvador, England, France, Germany, Greece, Hong Kong,
Hungary, Indonesia, Ireland, Japan, Jordan, Kuwait, Lebanon, Malaysia, Mexico, New
Zealand, Netherlands, Northern Ireland, Oman, Peru, Philippines, Poland, Portugal,
Qatar, Romania, Russia, Saudi Arabia, Scotland, Singapore, South Korea, Spain,
Sweden, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, United States
and Wales.

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Our Products
Coffee: More than 30 blends and singleorigin premium arabica coffees.
Handcrafted Beverages: Freshbrewed coffee, hot and iced espresso
beverages, coffee and noncoffee blended beverages, Vivanno smoothies
andTazo teas.
Merchandise: Coffee and teabrewing equipment, mugs and accessories,
packaged goods, music, books and gift items. Fresh Food: Baked pastries,
sandwiches, salads, oatmeal, yogurt parfaits and fruit cups. Consumer
Products: Products in 13 countries (Austria, Canada, China, Denmark,
Germany, Ireland, Japan, Korea, Mexico, Norway, Spain, UK and U.S.) in three
categories:

Coffee and Tea: Whole bean and ground (Starbucks and Seattles Best
Coffee brands), Starbucks VIA
Ready Brew, Tazo tea filterbags
and tea latte concentrates.
ReadytoDrink (RTD): Starbucks bottled Frappuccino coffee drinks,
Starbucks Discoveries chilled cup coffees, Starbucks Doubleshot
espresso drinks, Starbucks Doubleshot Energy+Coffee drinks;
Seattles Best Coffee Iced Lattes, Tazo bottled iced and juiced teas.
Starbucks Ice Cream: Superpremium coffee and coffeefree flavors.

Brand Portfolio
Starbucks Coffee, Seattles Best Coffee, Tazo Tea, and Torrefazione Italia
Coffee.

Objectives
Starbucks is an American brand following the same traditions all over the
world including Canada, they serve different type of Coffee products, food
and drink including serve free Wi-Fi to satisfy growing customer needs. They
have even launched their brand of coffee beans so that the customers can
enjoy the same Starbucks taste with comfort in their home. Their main
objective however will be to provide most unique coffee experience to their
customers, some of their other objectives are mentioned below

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A. Starbucks offers new design and concept which makes them the No #
1 choice of their loyal customers
B. Starbucks have established some unique and innovative strategies to
acquire new customers like having the customers name on your coffee
cup, customer recognition
C. To maintain their brand image throughout with amazing service and
great quality products.

Situation Analysis
Company and Product
Starbucks is constantly striving hard to provide customer one stop for
unique coffee experience. The Store are always in immaculate condition
and often is place where people get together for studying or even meet
friends. Starbucks is sometimes location landmark at certain places.
Starbucks being an international company has close to 55,000 stores
around the world and more than 4000 stores in Canada. The company is
growing tremendously and is now again becoming a market leader with
increasing sales. In past few years Canadian coffee market is growing
close to 157 % and new entrants have limited space to grow, Since
Starbucks is an established company in Canada it has opportunity to
increase competition by taking customers from its competitors. Starbucks
is a premium coffee shop with prices sometimes beyond the reach of
certain group of people and now machines are available to make good
coffee at home. Economic conditions have also created lot of issues like
increase in oil prices, transportation prices have increased, as best coffee
beans comes from places around the world such as Africa and South
America . Starbucks is still working hard to provide best consumer
experience and great coffee at the best price possible.

Competitive Analysis
Tim Hortons is one of the biggest competitors in Canada for Starbucks,
with Second cup catching up. Tim Hortons offers low priced coffee in price
sensitive market, and customers who have poor knowledge about coffee
and focus on the price factor are attracted to Tim Hortons. Some new
local coffee shops are also threats to Starbucks, as customers would
prefer local stores nearby than driving all the way to some Starbucks
coffee shop for a cup of coffee in Canadian climate.
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Marketing Strategy
Positioning strategy
Starbucks is under the expansion phase, opening coffee shops in new
locations and near densely populated areas. Starbucks have coffee shops
close to malls, retail shops or even urban business areas so that
customers does not have to travel far to get their favourite coffee.
Starbucks logo is one of the most recognizable logo in the world, and
having a Starbucks coffee cup in hand is a sense of pride for loyal
customers who do not want to be seen with competitors products.
Starbucks coffee shops are huge, with great ambience, comfort and
proper space allotment with the smell of freshly brewed coffee. This helps
customers to relax and enjoy their time with friends and family or even
business associates to peacefully have a business conversation and to
order a cup of coffee again.

Product strategy
Starbucks has always been innovative with their Products, offering new
holiday flavours apart from their regular coffee products. Starbucks have
always been associated with coffee, but now they have also included
other products such as Starbucks coffee beans, coffee maker, frappe,
chocolate drinks, sandwiches etc and off lately on 4th February 2015,
Starbucks Canada president mentioned about revamping their strategy
Starbucks baristas: Make room for bartenders and a carbonation station
for teas and juices.
An evening menu of wine, beer and tapas, including flatbreads, olives,
nuts and cheese, will be launched at the coffee chains locations in
Toronto and other big cities by the end of the year, Starbucks Canada
president Rossann Williams told The Star in her first sit-down interview
since taking the helm nine months ago.
She said the companys aim is to appeal to women, who make up 60 per
cent of Starbucks customers and dont necessarily like to hang out in
bars with their friends. She says the idea has been a hit so far in big U.S.
cities.

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In order to maintain high quality and great customer service all the
Starbucks are operated and service by Starbucks partners i.e. Starbucks
employees making them one the largest self-operating coffee shops in
Canada and around the world, Since Starbucks have long term contracts
with their partners, prices are always in control. Starbucks is very lucky
for one critical fact coffee is addictive so sales and customers will always
remain, all Starbucks needs to do is provide customers with satisfactory
customer service experience and great new products and innovation.
Starbucks coffee range includes espresso and drip brewed coffee
including whole bean coffee and beverages including hot and cold drinks,
sandwiches, Panini, pastries and salads. Starbucks also offers Starbucks
card which is reloadable and for different occasions.

Market share
There are nearly 40 Starbucks locations for every 1 million
Canadians.
Among the findings from Quartz:

The United States leads the world in the total number of outlets, at
more than 11,500.
Canada is No. 2, though far behind, at almost 1,400.
But on a per-capita basis, Canada is at the top, with 39.54 stores per
million people, followed by the United States at 36.25, Kuwait at 22.13,
Singapore at 18.01 and Hong Kong at 13.34.
By city, Seoul has the most outlets, at 284, followed by New York at
277, Shanghai at 256, London at 202, Chicago at 164 and Toronto at
160.

Competitors Analysis
The 2 major competitors of Starbucks Canada are Tim Hortons and Mc
Donalds. 62% of Canadian consumers say they visit coffee cafes at least
weekly, and 12% do so daily, according to Technomics 2013 Canadian
Bakery & Coffee Cafe Consumer Trend Report. And among the 34% of
consumers who report visiting coffee cafes more often in the past year,
convenience and service speed were cited as top factors encouraging their
increased patronage.

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Tim Hortons currently stands head and shoulders above other restaurant
chains in Canada in terms of domestic system wide sales: Its Canadian sales
stood at $5.9 billion in 2012, versus McDonalds Canadas $3.8 billion and
Starbucks Canadas $978 million. Still, while Tim Hortons sales were up 6.2%
in 2012, Starbucks Canadas were up 8.8%, and McDonalds Canadas rose
an also-impressive 5.7%.

STRENGTHS
Market leader
Strong brand loyalty
International Presence
Strong brand equity
Strong financial background
High developed supply chain
Free wifi
OPPORTUNITIES

WEAKNESSES
Expensive
Local competitors
Limited products
Over priced

THREATS

New markets and locations

New innovative ideas

Local businesses
New entrants

Service improvement

Price wars

Offers

Economic crisis
Healthy food and organic trend
Anti Starbucks groups and unions

FEATURES

BENEFITS

Free Wifi

Customer convenience

Loyalty card

Time saving

Contests and offers

Customers can browse

online, finish important
meetings
Good faith

Great customer service

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International brand

Customer comfort

Huge stores

Free goodies/gifts

Drive through

Customers dont need to

wait in long queues

Market Plan (Target Market)

Geographic
o
o
o
o

Region : Canada
Area : All the areas
Density : Majority urban
Climate : All seasons

Demographics
o
o
o
o
o
o

Age : above 15 years of age

Gender : All
Income : All income groups
Occupation : Any
Education : Doesnt matter
Race : Not applicable

Psychographic
o Personality : Coffee lovers
o Lifestyle : Healthy people leading active lifestyle

Behavioural
o Consumption rate : Regular
o Benefits : Great taste, great service
o Loyalty : People looking for quality and service.

Analysis of Consumers
Starbucks store is targeted to consumers from all walks of life, i.e. from 15
years of age and above, anyone who likes good coffee is welcomed at the store.
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Everyone is given equal treatment whether its male or female. Starbucks have
also tied with various organisations such as being associated with World Aids
day which creates good faith among buyers. Starbucks have been foremost in
community service and youth program, they have also started Starbucks
Foundation and Ethos Water funds.

Creative elements
Starbucks logo is one of the most recognized logo in US and Canada. Almost
everyone in US and Canada has heard about Starbucks and once in their
lifetime may have passed by the store or at least been in one. Starbucks have
been forefront in creating new products for the benefits of their customers, and
they have some signature themes, like the smell of fresh coffee at each and
every Starbucks the same, logo placements, seating arrangement are all the
same. This enables the customer to recall the brands distinctive image.

Database Requirements
Starbucks has its own loyalty card which gives them inside view of their most
loyal customers, and they can always come up with new programs which
increases loyalty also allow referrals which in turn increases customers base
with Starbucks

LTV and Referral Program

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The Lifetime Value or the LTV of Starbucks customers is shown explained

below with help of a chart

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Starbucks already has a My rewards card which is said to be the best card in the
retail industry. Upon implementing the My Rewards program Starbucks saw a
record setting quarter. The program helped increase revenue by 11% to an
astonishing $3.6 billion. Executives pointed to the increased participation in the
loyalty program as the main driver of these amazing results.

APPENDIX
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http://www.starbucks.ca/about-us/company-information
http://www.forbes.com/sites/greatspeculations/2014/01/30/starbucksprofits-surge-despite-sales-slowing-down/
http://www.macleans.ca/economy/business/starbucks-takes-ontimmys/
http://business.financialpost.com/news/retail-marketing/starbuckscanada-to-open-150-new-outlets-in-biggest-expansion-ever
https://blogs.technomic.com/coffee-war-heats-up-in-canada/

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