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September 9, 2014

Marketing Audit Report

Marketing Audit Report
Executive Summary
In the earlier report related to marketing auditing, some of the fundamental aspects of marketing that were highlighted included an environmental scan of the company, which for that matter was Starbucks. The environmental scan comprised of demographic segments, targets population, culture and values that are integral to the organization. These also included the psychographics of the target population that Starbucks caters and the way through which it intends to influence and expand its market share.
 In addition to this some of the other key areas of marketing that were illuminated during the course of the discussion included the SWOT and PESTEL analysis of the organization. With the help and conduction of these analyses we were able to gain a thorough idea about the ways in which the strengths, weaknesses, opportunities and threats play a collective role in the development of the organization, and through what ways is Starbucks collectively able to manage all these areas in an effective manner. PESTEL analysis provided an overview of the ways through which mainly internal as well as external factors such as political, technological, economic as well as legal steps can influence the ways a business functions in a certain economic environment from the perspective of Starbucks. Also, other areas such as customer analysis, stakeholder analysis, competitor analysis and TOWS analysis were also properly conducted and analyzed from the viewpoint of Starbucks in the earlier discussion. However, once done with all the important aspects deal earlier it is now important to move into greater tiers of research related to marketing and the way it applies to the case of Starbucks.
During the course of this discussion our key aim and focus would be related to other subsequent and significant aspects that are related to the science of marketing. This will focus largely on the development of a marketing plan that will first and foremost outline the marketing objectives of the plan. Once aims and objective are clearly chalked out, it is important that the marketing mix of Starbucks is clearly understood and analyzed. This will be dealt under the headings of 4 Ps which are price, product, promotion and place. In addition to this some of the other important aspects that will also feature our research will also comprise of marketing tactics, timeline and contingencies.  
Marketing Objectives
While designing marketing objectives of our plan and strategy it is important that we make sure that the aims and objectives being lined-up are realistic in nature, logically outlined and in line with the resources and labor that is within the affordable capacities of the organization. in line of all these aspects some of the important objectives that have been outlined in the case of Starbucks are listed as follows:
·         Since the brand name and portfolio is already strong it is important Starbucks this year tends to look towards stabilizing and establishing a greater presence on a global scale.
·         Focus more towards strategies that can bring costs under control, for organization as well as consumers. At the same time it is important to ensure that customers are provided a unique and memorable experience to rejoice.
·         Another key objective is that of working in collaboration with pace with licensed store and explores frontiers in emerging markets.
·         In addition to this it is also important for Starbucks to conform to its mission statement of introducing environment friendly policies and strongly adhere to their recycling of waste policy.
·         Also make sure that the sales volume from each store reaches to the point of $20,000
Industry dynamics
Marketing objectives that have been listed above can only become easily achievable once we find that the situation of the industry is in accordance with our requirements. This can be manifested from the fact that in recent times coffee industry in US and other places of the world has expanded immensely. Starbucks with its global penetration in international retail coffee market has provided a new dimension to the concept and perception that people earlier had about coffee.
With its different taste and diversity of flavors that it offers Starbucks has quickly reached the zenith of providing valuable coffee experience to its customers. In addition to this the stable position of Starbucks has further been stabilized with the different and rather unconventional innovations that it has introduced.  
For instance it was among the first coffee retailers to offer wi-fi services and connection to its customers so that they could easily share their experience of having coffee at Starbucks with their friends and relatives. Hence, they were able to capitalize upon the word of mouth marketing.
Another major reason that helped Starbucks boost its industry leverage was on the basis of the fact that unlike other popular food industries like McDonalds, the company has only been offering its products and services in markets that are licensed and superstores. And it is mainly through these stores that the company generates revenues for itself. Major share of revenue incoming is from whole bean coffees that accounts for 76%, followed by 18% by equipment and the remaining minute share of 3% by sales of other beverages. So, with the help of these facts and figures we are able to get a clear view about the ways in which industry and its dynamics favor the ways through which Starbucks can easily gain access into other global markets since it has a clean record and par excellence standards when it comes to credibility.

Marketing Mix of Starbucks
The USP of Starbucks has always been their coffee varieties and flavors. Coffee range offered by the organization includes espresso and drip brewed coffee including whole bean coffees. Other than this in order to explore greater avenues of customer interest and liking Starbucks also offers a variety of beverages and cold drinks to its customers. The menu also includes sandwiches, Panini, pastries and salads. In addition to this, mugs, tumblers and even CDs are sold at the various outlets of Starbucks.
It is also important to mention here that all products that are present within any outlet of Starbucks are branded in nature. Another area where Starbucks has provided immense attention in refining the image of its product is the way through which it was presented. This has played a pivotal role in the re-positioning of the product and garnered some positive comments from customers who visited Starbucks. The process of redefining product image has mainly taken place through enhancing the ambiance of the store with the ultimate goal and single line agenda of making customers want to linger for the product that Starbucks offers them. In addition to this the environment that has been created also allows customers to experience a sense of social feeling and appeal (Kettle, 2010)
 This is catered with the help of inculcating a sense of community and making Starbucks synonymous with this communal feeling as a place where people can easily come together, communicate with each other and share their thoughts. The feeling of community building and strengthening has further been enhanced with the incorporation of Wi-Fi and internet availability services in all their outlets. This has allowed customers with the leverage of not only communicating with people physically present with them but include all those whom they want to share the experience of having coffee at Starbucks.
Hence, the very concept of ambiance rebuilding and positioning has indeed an extremely important role in providing the product of Starbucks a completely new and refined image. Similarly, changes have also taken place as far as the physical maintenance of their products is concerned. Smoking is banned in all outlets of Starbucks; as a matter of fact customers are not even allowed to wear perfumes as they can contaminate the food and other products that are being offered.
In Starbucks the pricing strategy followed is regulated according to customers’ response. Starbucks sets prices of its products based on a simple formula and agenda. This is based on providing customers high quality at a moderate cost. When people see that they are getting a good deal of their money, they will definitely make up their minds to pay for something that is charged extra. The pricing strategy of Starbucks has also a lot to do with the way the brand positions itself and at the same time provides the brand with the leverage to charge premium prices of the products that it offers (Slideshare, 2011)
Thus, when Starbucks introduces a new coffee flavor or product, customers happily pay more for the newly launched product since they know that the quality that they will be provided with at Starbucks will not be available anywhere among its competitors. Therefore it can be understood and said that customers today take Starbucks as the name synonymous with good quality coffee brand. In addition to the quality coffee that is being sold Starbucks also provides various denominations and ranges to customers in coffee from which they can use based on their own choice. All they need to have are $3 to $4 in their pocket to enjoy a coffee of Starbucks.
Established back in 2007 in a time span of more than a decade Starbucks has been able to take the coffee market of US, Canada and UK by storm. It has become one of the most trusted coffee brands of the world that offers good quality at an extremely affordable and economic rate. Apart from the United States it operates in more than 50 countries in almost all continents of the world. It is only I Africa where induction and establishment of Starbucks is still in embryonic stages (Larson, 2008).  
Moreover, it is important to mention here that in all the different countries where Starbucks operates it has successfully been able to design and mold itself with the coffee consuming tastes of people. It is precisely the reason why Starbucks has been able to gain immense success as a brand in almost all markets where it operates or has been operating for a long time. With numerous locations and convenient accessibility it has become very easy for customers to buy products of Starbucks no matter where they are. However, there are certain flavors and products that are season specific, for instance the newly launched Frappuccino flavors that can only be available in certain seasons. Furthermore, it is also important to state here that even sometimes high demand of certain flavors can also create a dearth of certain flavors which usually happens upon the launching of new flavors or products.
It is a generally acknowledged fact that Starbucks does not spend much of its expenditure on advertising. The company has always relied overwhelmingly on word of mouth marketing which has always played a profound role in the development and progress of the overall brand. However, with the passage of time Starbucks has also realized that in order to effectively compete with other brands, and at the same time maintain an upper hand in customers’ mind it is important that it should provide some serious attention towards steps that encourage massive investment and surge in advertisement budget.
However, even before an easy method that Starbucks can easily apply in its situation is by creating internal advertisements within its own retail stores. Advertising tools such as posters, flyers, new product signage and other associated tools can easily be made use within the premises of a particular outlet and can be used as an effective means of advertising about new products (Larson, 2008).
Nonetheless, advertising done through these means will only be effective and fruitful to people who are coffee drinkers and regularly visit Starbucks for that. But, how will it reach to people who are non-coffee drinkers? There needs to be a way through which they can be reached and catered. For the fulfillment of that purpose it is important that some traditional and modern methods of advertisement are also highlighted. This can be in the form of either advertising their new products, services and schemes on TV Spot or web marketing them. Historically, Starbucks has never engaged in doing any TV Spots for any of its products or services before and plus the cost of doing that is exceptionally high in comparison to web marketing which is easily affordable and currently in the favorite medium of the target market and audience that Starbucks has largely catered for over a long period of time.
TV advertisements must also be done, but for the time being they should be placed at second priority for Starbucks as compared to other means like web marketing or on social media which will be very effectively in the preliminary stages of any product or service launched by the brand.
Marketing tactics and timeline
As mentioned in earlier sections of our discussion that in order to have a stable and well established global presence the most convenient and auspicious form of marketing that can be applied by Starbucks will be in the form of web marketing. There are some apparent reasons that actually lead to this choice. First and foremost being that by choosing web as the dominant and top prioritized medium of advertising they can easily reach a mass audience which might be technically possible through other traditional media like advertising in newspaper or television. In addition to this another integral part of marketing tactics will also comprise of in-house marketing or word of mouth marketing that Starbucks has always been overwhelmingly reliant upon.
Outlets of Starbucks that are present in over 50 other countries will act as the advertising agencies for the organization to introduce the new products and services and campaigns that the company intends to launch. Also, as soon as a new product is launched or unveiled it will be immediately updated on the Facebook, Twitter and other social networking websites so that customers of Starbucks are immediately made aware of the innovations that are taking place in their favorite brand.
 An estimated cost or projected cost on this form of advertising will range from $2000-$4000 something which will definitely not be burdensome for a brand like Starbucks especially when it’s providing him with the new lifeline and a new image for its loyal customers. However, it is important to mention here that the timeline allocated for the entire web marketing session must be for the whole year. For the first six months web marketing campaigns must be observed closely as during that time period they will require constant input of finances. In the next six months results will start to show and definitely prove that the investment was worth making.
Marketing contingencies
In case of failure, it is important that a couple of backup plans need to be made. For instance if the marketing tactics proposed do not produce desired results, it is important to understand that people are either more aligned towards competing coffee brands than Starbucks or they simply do not think that the brand name is trustworthy. In such a situation it will be feasible to switch towards defensive mode.
Critical situations demand critical measures and in such a situation Starbucks needs to come up with strategies that can help build its image and reinstate its credibility. A very simple step that can initiate and propagate the process will be in the form of creating videos and posting them on YouTube that talk about and discuss the services being offered by Starbucks which others are not. With such contingency planning things will definitely change course towards optimism.
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