A strong brand influences the choices made and products bought by customers. Once a company has built a strong brand, it must maintain a positive reputation. Premium Price Companies with strong brands can charge more for their products and services because the brand is valuable in the eyes of consumers. Some customers won't even consider purchasing alternative products because they do not believe they will receive the same value. For example, a customer may choose to buy a premium cup of coffee from a national coffee chain instead of buying coffee at a local corner store.
Employees have heard a rumor that Starbucks might be opening a store in the area. Right now we have competitive advantage, because we are only café which is specialized in coffee products. The situation will change when Starbuck will open a new shop. As Baltzan & Phillips (2009) have stated in their book that, “competitive advantages are typically temporary because competitors often seek ways to duplicate the competitive advantage” (p. 22). The café have first mover advantage to be first in business but Starbucks are technologically advanced and have wholesale coffee business in the market.
* 1. Controllable Elements & Uncontrollable Elements A successful marketing manager blends price, product, promotion, channels of distributions, and research activities to capitalize on specific demands. These elements can be altered in the long run, and usually, in the short run, they are adjusted to changing marketing conditions, consumer tastes, or corporate objectives. Hence, they are controlled by managers to adapt to changing market environments and different global market conditions. Specifically for Starbucks, they have built success of the franchise by developing a name brand and image that connects with the world.
Starbucks is a star performer in executing a broad differentiation strategy. The competitive approach that Starbucks employs is a broad differentiation strategy. Starbucks successfully offers unique product/experience attributes which a wide range of buyers find appealing and are willing to pay for. The key market characteristic for the strategy of differentiation to work is that buyers’ needs and preferences are very diverse and cannot be satisfied with a standardized product offering. Because Starbucks is successful in executing its differentiation strategy, it is able to command a premium price for its products; increase unit revenues; and capture, maintain, and grow consumer brand loyalty.
Berry: “Well, Chuck, you can’t expect forecasts to be always on the button. The money is one thing, but what else can you tell me about Hervey’s rational for putting more dollars into consumer advertising?” (Kerin & Peterson, 2010, p. 301). Bates:”…increase our exposure and tell our quality and styling story to the buying public—increase brand awareness, enhance our image, that sort of thing. He also cited industry research
The company primarily focuses on developing economies where saturation of the market is at its peak and the company has failed to continuously innovate their products to sustain market growth. Illy also has a wide number of competitors in the market due to which it is becoming really tough for the company to stand out amongst the crowd. Opportunities Until recently, the demand for specialty coffee has increased in both the developed nations and the emerging markets. As coffee is the second largest traded commodity after oil, an estimate
Coffee Roasters operates in the niche market of Fair Trade Coffees. Just Us! Coffee Roasters is wishing to expand their company, thus profits, which means that they face more competition from outside their niche market. As a result, Just Us! Coffee Roasters now must compete on a large scale against strong mainstream competition and well established local and international brands.
From the beginning, Starbucks has an initial stake in global economic. The coffee beans that Starbucks uses to make the robust brands of coffee all begin in the rich soil of foreign countries. Global economic interdependence does relate to Starbucks and management is well aware of this importance. Starbucks global interdependence is an imperative necessity that will generate revenue for Starbucks. Revenues are globally impacted because of essential materials from specific countries.
Thirdly, to resolve the issues of a widening customer demographic and unclear brand perception, Starbucks could engage in a promotion to encourage their most loyal customers as well as new business through promotions such as a free cup after “X” visits or a “club card” that encourages repeat business. For all three of these solutions, Starbucks would want to enact these solutions as quickly as possible due to the threat of eroding their brand perception. See Appendix C for rejected alternatives. Rationale for the Recommendation Adding labor hours is our first recommendation. Interestingly, Starbucks faces a unique problem since they are actually improving their service yet the customers are still not necessarily recognizing the progress.
According to our textbook, “continuity program can establish brand loyalty among customers and help companies to build databases to learn which individuals are their best customers”. Through the One-to-One program, customer retention and loyalty are likely to increase by providing reminder cards to customer. It reminds them to change the motor oil, check engine condition or even do further purchasing afterwards. While the One-to-One program also gives rebate coupons to vehicle owners, it might be very effective to switchers due to their purchasing characteristics. In the text book, it mentioned “switchers are