This paper presents an analysis of international marketing scenario taking the case of a multinational firm; Starbucks. It discusses various elements that relate to international business for a company such as Starbucks.
Starbuck’s Clientele and Positioning Strategy
The Starbucks Corporation is a Seattle, Washington-based coffee company. It specializes in purchasing and selling of whole bean specialty coffee drinks through an international chain of retail outlets. The firm is well known in North America for its coffeehouses where people come to purchase beverages and food items including ground and bean coffee varieties. The company has become synonymous with Americans conceptualization of coffee products a factor that has ensured the growth of the company globally. Today Starbucks stands as the largest coffeehouse company globally. It has more than 20,000 stores in 62 countries, including 13, 279 stores in the United States alone (Anon, 2014).
The majority of Starbucks customers are drawn from coffee lovers who visit the outlets of its chain of stores. The clientele is differentiated in characteristics such as age, preferences and tastes. However, the unifying factor among them is that they all enjoy Starbucks coffee. Hence, the majority of the clientele that Starbucks targets are high end coffee lovers who do not just come for the coffee due to its premium price, but also because of the quality of the coffee itself. Furthermore, association with the brand Starbucks is engraved in most Americans conceptualization of traditional American coffee, hence their loyalty to the brand (Helliker, 2010).
The target group consisting of Starbucks customer base is class oriented where the majority of its target clientele include; connoisseurs, highly educated relatively affluent, well-travelled and technically savvy persons with an interest in art and cultural events as its main customer base.
Its’ positioning is based on a premium price of its coffee products. Essentially, the chain of its outlets is designed as a place where people can relax other than their homes. The stores are fitted with comfortable furniture and soothing music that are welcoming to the clientele visiting the stores. In addition the stores are equipped with dedicated employees who serve the needs of the clientele guided by customer satisfaction principles .
Elements of the Marketing Mix adopted by Starbucks
The company is cognizant of the elements of the marketing mix that make it a renowned brand in the coffee market. With regard to the price, the company Starbucks has set a premium price for its coffee products as well as other products. This has essentially done a lot in creating the notion of class association with the brand. For this reason, the company attracts high end customers with the capacity to purchase products offered in Starbuck’s outlets .
Secondly, the company has invested in psychographic segmentation that involves division of groups depending on their social class. Through this approach Starbucks has been able to attract a variety clientele that constitute its customer base. The clientele areas differentiated with their financial capabilities as much as they are with their interests. For instance, Starbucks focuses on charity projects and the arts from which it attracts an array of clientele. Similarly, it is making deliberate efforts to contribute actively in corporate social responsibility initiatives that also contributes a unique group of clientele to its pool of customers. By ensuring participation in these and other different positive causes and events, Starbucks has been able to gain a lot of favor in terms of exposure and publicity for its brand.
Another element of the marketing mix that is central to the successful performance of the company Starbucks is in its placement strategy. Starbucks has consistently, scouted for locations where there is high traffic with high visibility. This ensures that its clientele can easily spot its outlets and proceed to make an entrance. Fundamentally, it focuses on locations that are adequate for the provision of convenience for a variety of clients who comprise both pedestrians, as well as drivers.
These three elements majorly; place, price and promotion are the marketing-mix elements that prove key to the success of the products developed by Starbucks. Hence, the company’s success has been banked on these three elements as presented.
Starbuck’s SWOT Analysis
The major strengths of the Starbucks brand comprise its premium pricing and dominance that it enjoys in the American market as well as other markets around the world. Its reputation in the business of Coffeehouses makes it an exceptional competitive company that enjoys a competitive advantage over the rest (Anon., 2014).
An analysis of the threats faced by the firm reveals that a stiff competition remains its greatest challenge. This is because the brand is in direct competition with among others; restaurants and specialty retail stores that have set up in prime locations where Starbucks has established its outlets. Similarly, the brand faces stiff competition internationally from other well established brands. On both instances the majority of its competition comes from cheaper ready-to-drink coffee beverages especially from vending machines .
The major opportunity that is eminent for the company Starbucks lies in its quality of coffee products. Its customers chose the brand due to its superior quality which keeps them coming back. Similarly, the service and convenience offered is also sustainable to the extent that the company can survive and maintain marginal profits despite stiff competition. However, for the firm to maximize on this, it requires to develop strategies for downsizing some of its stores. This would have the effect of maximizing on the profitability of the firm in the light of stiff competitiveness .
The weakness of the firm lies in its lack of diversification; essentially, diversification of the products that the firm offers is central in countering competition presented by rival firms. Barney (2012, p. 208) observes that product diversification can help a company survive through financial difficulties. This can be done through offsetting the losses made from the sales of one product with the profits made from the sale of another. In this way, the entity will have the capacity to stay afloat despite the changes in the market due to stiff competition (Barney, 2012, p. 208).
Starbucks is committed to its clientele operating a customer focused business. It is particularly concerned with customer satisfaction on which it bases it business culture. For this reason, the company has made strategic investments in customer relations ensuring that the clientele receives quality services when visiting outlets of the store. With regard to Hosfede’scultural dimensions, it is found that Starbuck’s has made particular investments in the concept of ‘collectivism’ through a variety of clientele it targets. According to Hofstede’s collectivism influences innovativeness. Similarly, the avoidance of uncertainties that Starbucks has ensured its customers’ enjoy has been found to encourage information exchange behavior. This is particularly useful in identifying the strengths and weaknesses of the firm especially since it’s operating on an international scale (Soares, et al., 2007, p. 281).
This customer focused culture has been instrumental in expanding the market share of that Starbucks commands worldwide. The Wall Street Journal reported that the infiltration of Starbucks in the Vietnamese market threatens to topple the brands that have been existent in the country although a challenging task. This portrays the potential of the corporate culture of Starbucks to influence market trends, as well as win a clientele for the firm. Fundamentally, the firm achieves this through the interaction between its employees and clientele. The firm ensures that understand that the customer comes first which gives it customer satisfaction focused bias resulting in its strong corporate culture (Hookway, 2013).
This paper has discussed international marketing with respect to the operations of the Starbucks Corporation whose business stretches across several countries worldwide. Centrally, the focus of the discussion presents an analysis of the strengths, weaknesses, opportunities and threats that the firm faces in the world stage. Further, the discussion analyzed Starbuck’s positioning strategy relating to its operations and market success. In addition, the discussion has also presented various features of Starbucks corporate culture that give the company an edge over the competition. Principally, the paper presents a detailed analysis of international marketing focused on the case of Starbucks Corporation as presented here-in.
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