Coffee Roasters prolongs their decision to act they risk reducing growth as a company, and reduce their strong brand image in the public’s current perception as a proactive advocate of fairness and equality for the coffee producer. Current Situation Strengths - Just Us! Coffee Roasters’ brand equity is what drives the company forward. Customers base their decision to purchase coffee from Just Us! Coffee Roasters as a symbol of their own personal beliefs, demanding ethical business practices and quality of product.
Channels of distributions are another. The new variation of latte and espresso sold as a ready to drink beverage sold in convenient stores is different from the traditional cup of coffee at a Starbucks store. This is management controlling the distribution channel in which the coffee is sold. Price is another element. Starbucks is known to have a more expensive product.
BUSI 520-D06, Group 2 Liberty University Starbucks Blonde Roast Coffee May 11, 2012 Introduction Provide a description of your product/service and a brief history of the firm that produces your product/service. Starbucks Corporation is a leader in the coffee industry with coffeehouses around the world. Since their inception in 1971, their goal has consistently remained to “share great coffee with our friends and help make the world a little better” (Our Heritage, n.d.). Starbucks is widely known for their retail stores; however, the company has plans of becoming a brand known for their consumer-products as well (Jargon, 2012). Starbucks offers a variety of coffee and coffee products in their retail stores and in grocery stores worldwide.
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.
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.
Using the single allocation rate would lead Coffee Bean Inc. to believe that Moana Loa costs them more but also is more profitable with a $1.80 gross profit versus Malaysian which has a gross profit of $1.50. Using the single allocation rate will most likely lead management to make incorrect decisions regarding their different product lines. After recalculating costs and gross profit using the activity based costing method Moana Loa has a gross profit of just $1.45 and Malaysian has a gross profit of $2.26 making it more costly to produce but at the same time more profitable. Coffee bean Inc. in the future should use the Activity Based Costing method rather than their single allocation rate. Activity Based Costing leads to more accurate cost assignment, and will keep management better aware of which products cost the most and which products are the most profitable.
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.
Schultz vision was to create a “third place” (other than home and work) for its patrons to want to be. Lastly, they chose to focus heavily on their customer service philosophy hoping to translate to brand loyalty. Their value proposition is directly attributable to creating a higher perceived value around the experiences they create for their buyers or what they call “live coffee” culture. To substantiate this strategy, Starbucks has focused on three fundamentals. First being high quality beans.
To: Ms. Rita Thakur, Owner/Investor From: Marketing Consultant Subject: Marketing Growth Strategy Date: Thursday, June 19, 2014 This memorandum summarizes possible alternative growth strategies, recommendations for each growth strategy, two best recommended growth strategies that would most likely meet your growth objectives, an explanation as to why I think these strategies are best, and my assumptions based on the needs for Dutchess Ice Cream Shoppe. As we discussed, your objective is to develop a plan to expand your business at your establishment. I have evaluated possible alternative growth strategies for your business to increase your business opportunities. I recommend a more specific approach to expand your company. For example, in order to increase profit revenue you should start by increasing sales on a specific existing product.
In this report I am going to discuss the similarities and differences between the marketing techniques between Starbucks coffee and Santander Firstly diversification is important in a business like Starbucks coffee as if a company does not bring out new products the existing customers may lose interest in the business and move to a rival company that is showing interest in to bringing out new products and trying new things, however bringing out lots of different products and possibly forgetting or getting rid of the old products might upset existing customers as they have no reason to shop with you. Starbucks has to bring out new products but keep or work on the existing ones to keep a healthy customer base and hopefully bring in new customers. Santander are slightly different as they are marketing a service they want to offer new customers deals and offers to persuade them to start banking with Santander, but they need to keep their existing customers happy too by offering them deals. Customers stay loyal when they feel like they benefit from using your service or enjoy your products this is why both companies use diversification to show they are active and interested in their customers. Some customers don’t like change and they like to feel comfortable with their products and services, this is where product development is useful as they are used to their usual product or service but it has been improved or changed in some way, for example Starbucks changing their coffees and using different types of beans shows they are interested in keeping the customer and the customer feels important to the business.