1. By:LauraTerry

2. Starbucks Key Description
• Starbucks is a coffeehouse chain, selling coffee all around the world with more than
21,000 stores in 65 different countries.
• Purchases high quality coffee beans from all around the world to roast and sell.
• Sells all different varieties of drinks such as: Freshly brewed coffee, blended beverages,
hot and iced espresso beverages, smoothies, hot and iced teas, refreshers
• Serves Breakfast sandwiches ALL day long. Also serve yogurts and fruit cups and bagels
that work great for breakfast.
• Lunch items are available such as: Panini's, deli style sandwiches, salads, bistro boxes
• Starbucks serves a variety of delicious pastries from their La Boulange bakery that make
great anytime snacks.

3. Starbucks History
• Starbucks opened in 1971 in Seattle, WA where its corporate offices are currently
• During the first 5 years of operation, Starbucks only sold roasted high quality
coffee beans and only brewed coffee for free samples.
• During the very first year of operation, Starbucks bought its green coffee beans
from Peet’s then shortly after started buying directly from growers.
• In 1987, the original co-founders sold the company to its current Chief Executive
Officer, Howard Schultz.
• Two years after Howard’s take-over, the company had 46 stores and Starbucks was
roasting over 2 million pounds of coffee. It didn’t take long for Howard Schultz to
expand Starbucks Corporation outside of Seattle.

4. Starbucks also owns….
“To provide fresh, high quality
teas and the products to serve
them. And to create a unique
tea experience in each store
by encouraging a positive,
healthy outlook for all who
enter.”
A San Francisco
Bakery and café that
has been serving
artisanal pastries and
great food since 1996.
“We begin with the
world’s finest tea
leaves, then artfully
blend them with
herbs, spices and
botanicals to create
unexpectedly rich,
truly memorable
flavor experiences.”
“We believe in a different
approach to making juice.
The cold-pressed way. It’s
our way of helping protect
the flavor and nutrients of
the raw fruits and vegetables
we bring into our juicery. No
added colors or flavors
nature didn’t put there. Just
our favorite produce, tasting
as close to fresh picked as
possible with minimal
processing. ”
“We’ve been roasting and
brewing coffee for more
than 40 years. And for us,
it’s always been a labor of
love. One we want to
share. Frozen, iced, hot or
perfectly warm, we’ve got
options and seasonal
favorites that satisfy your
every craving, every day.”

5. Key Personnel
Howard Schultz,
Chairman and Chief
Executive Officer
Kevin R. Johnson,
President, Chief
Operating Officer
and Director
Robert M.
Gates,
Independent
Director
Mellody Louise
Hobson,
Independent Director
Javier G. Teruel,
Independent
Director
James G.
Shennan,
Independent
Director

6. Key personnel
Craig E.
Weatherup,
Lead
Independent
Director
Olden C.
Lee,
Independent
Director
Bill Warren
Bradley,
Independent
Director
Myron E.
Ullman,
Independent
Director
Joshua
Cooper
Ramo,
Independent
Director
Clara Shih,
Independent
Director

7. Financial Data
Starbucks Worldwide
• “Starbucks delivers record quarterly revenue of $4.9 billion”—The
increase was primarily driven by incremental revenues from the
acquisition of Starbucks Japan, a 7% increase in global comparable store
sales and the opening of 1,592 net new stores over the past 12 months.
• Consolidated operating income grew 22% to $938.6 million in Q3 FY15, up
from $768.5 million in Q3 FY14
Starbucks in the Americas
• Net revenues for the Americas segment were $3.4 billion in Q3 FY15, an
increase of 12% over Q3 FY14. The increase was driven by 8% growth in
comparable store sales and incremental revenues from 658 net new store
openings over the past 12 months.

8. Stock
NASDAQ: SBUX
$61.89 on December 7
Trading Range (52 week): $39.22-$64
+50.27% Year-to-Date
The graph below is the stock trend over the past year:

9. Recent News
Starbucks brings back it’s
most famous FALL drink
on September 8 and this
year it is even MORE
talked about since the
company changed the
recipe to include actual
pumpkin in the recipe!
Starbucks is also
getting more into the
FALL season this year
with their popular
decorative cups! As if
people already didn’t
take selfies with their
Starbucks cups before
they added the FALL
cuteness!!
Starbucks just released a “Mobile Order and
Pay” app, allowing a customer to choose a
close Starbucks location and order their
Starbucks online to have ready when they
arrive. The app will allow you to pay with your
Starbucks card and tell you when to
approximately pick up your items! This is very
convenient for customers and it really beats
waiting in the long morning rush lines! As of
right now, it is only on iPhones, but the
company is currently working on the Android
App and other great modifications!

10. Starbucks Evening Stores are becoming more popular
Starbucks® Evenings stores provide a curated menu of wine and craft beer, coffees
and tea beverages as well as sharable small plates. A few facts as to why Starbucks
decided to launch their evening stores:
• Starbucks customers are also wine enthusiasts: 70 percent of Starbucks customers
drink wine, as compared to 30 percent of the general U.S. population, according to
Mintel Reports 2014. Providing another occasion for these customers to visit
Starbucks during the evening hours was natural for Starbucks – giving them a place
to start and end their day.
• There’s a demand for the casual meeting environment in the evening hours and
Starbucks Evenings menu satisfies that need.
• Research shows that Starbucks customers love beer too: Starbucks customers are
two times more likely to drink craft beer than the national average, according to
Mintel Craft Beer US 2014. They’re showing the same interest in the uniqueness of
local and regional craft beers as they have for Starbucks® regional coffees.

13. Starbucks: Coffee Category
• cof·fee: a beverage consisting of a decoction or infusion of
the roasted ground or crushed seeds (coffee beans) of the
two-seeded fruit (coffee berry) of certain coffee trees.
• Coffee has become more than just a shot of caffeine. It’s a $30
billion-a-year national industry, a foodie fixation, an
affordable luxury, a boost of disease-fighting antioxidants, a
versatile ingredient, an intoxicating aroma and a beverage
that brings people together.

14. History of Coffee
• The Arabs were the first, not only to cultivate coffee but also to begin its trade. By the
fifteenth century, coffee was being grown in the Yemeni district of Arabia and by the
sixteenth century it was known in Persia, Egypt, Syria and Turkey.
• Coffee was not only drunk in homes but also in the many public coffee houses -- called
qahveh khaneh -- which began to appear in cities across the Near East. The popularity of the
coffee houses was unequaled and people frequented them for all kinds of social activity. Not
only did they drink coffee and engage in conversation, but they also listened to music,
watched performers, played chess and kept current on the news of the day.
• Coffee Comes to Europe: European travellers to the Near East brought back stories of the
unusual dark black beverage. By the 17th century, coffee had made its way to Europe and
was becoming popular across the continent.
• By the mid-17th century, there were over 300 coffee houses in London, many of which
attracted patrons with common interests, such as merchants, shippers, brokers and artists.
• In the mid-1600's, coffee was brought to New Amsterdam, a location later called New York by
the British.
• Plantations around the world: As demand for the beverage continued to spread, there was
tense competition to cultivate coffee outside of Arabia. Though the Arabs tried hard to
maintain their monopoly, the Dutch finally succeeded, in the latter half of the 17th century,
to obtain some seedlings. Their first attempts to plant them in India failed but they were
successful with their efforts in Batavia, on the island of Java in what is now Indonesia. The
plants thrived and soon the Dutch had a productive and growing trade in coffee. They soon
expanded the cultivation of coffee trees to the islands of Sumatra and Celebes.

15. Methods of Distribution
• Retail Outlets (Starbucks, Dunkin Donuts,
etc.)
• Wholesalers
• Online Sales

16. Source:Slideshare.com/StarbucksCompetitiveAnalysis

17. Major Players Worldwide

18. Coffee
• Seasonal Factors: Seasonal factors have a significant influence on
the price of coffee. There is no extreme peak in world production at any one
time of the year, although coffee consumption declines by 12 percent or more
below the year's average in the warm summer months. Therefore, coffee
imports and roasts both tend to decline in spring and summer and pick up
again in fall and winter.
• Regional Factors: “Coffee is typically cultivated in tropical and
subtropical areas at high elevations, often in rugged mountainous
areas and naturally grows under a shaded canopy of trees. Traditional
coffee is often integral to agro-forestry systems in which tree species
are cultivated together with coffee and other agricultural
commodities.”
• Other regional factors associated with the temperature at which
coffee grows are also crucial for obtaining a superior quality beverage.

19. Regional Coffee Harvesting Areas
Source: news.mongabay.com

20. Seasonal Factors of Coffee
• Coffee requires careful, timely processing. Once the growing season ends, the pulp is
removed from the bean, and it is dried and prepared for roasting. The chart below describes
the growing season for coffees in different countries.
Source: Hcvalentine.com

21. New Product Introduction
• Toasted Graham Latte: Graham and sweet cream meet steamed milk and our signature espresso,
then are finished off with a sprinkling of cinnamon graham crumbles for a less sweet perfect treat.
• Holiday Spice Flat White: Smooth ristretto shots of Christmas Blend Espresso Roast and perfectly
steamed micro-foam are infused with warm holiday spices to create a festive version of an espresso
classic.

22. Benefits and Appeals
• New packaging
• Product differentiation such as custom mugs throughout
each big city and state Starbucks is located in.
• Being able to custom order to your specific drink needs.

23. Source: cacholajennifermar100.blogspot.com

24. Top 10 Innovations of the last 2 years
• Teavana Oprah Chai Tea: Oprah Winfrey personally developed this tea that features a bold infusion of
cinnamon, ginger, cardamom and cloves, blended with loose-leaf black tea and rooibos. A portion of these
sales go towards young leaders to the Oprah Winfrey leadership academy.
• Teavana Shaken Iced Tea: These iced teas are vigorously hand shaken ten times to help ensure all the
ingredients are cooled down quickly and mixed perfectly to bring out their distinct flavors.
• Fizzio handcrafted sodas: Fizzio beverages are individually handcrafted for each customer, featuring
three flavors: Spiced Root Beer; Golden Ginger Ale; Lemon Ale. The Fizzio™ machine is a breakthrough in
carbonation technology with the ability to deliver an unmatched soda experience.
• Digital Tipping, Shake to Pay, Mobile Order and Pay: Allows a customer to show their appreciation
to their barista by tipping digitally. Also allows a customer to shake their phone to automatically bring up a
barcode so it’s easier to pay. Mobile Order and Pay is the most recent technology allowing a customer to
order ahead of time, and pick up their order when it is ready.
• Starbucks Mobile Truck: A pilot mobile service debuted on three college campuses this fall, offering a
menu of drinks and food nearly identical to what customers would find in their neighborhood Starbucks
stores. The Starbucks mobile truck can move to various locations on campus throughout the day, making it
convenient for students and faculty to grab a snack or beverage.
• Evolution Fresh Smoothies
• Single-Origin coffees in grocery stores
• Iced coffees brewed to personalize at home
• Starbucks Chestnut Praline Latte: First new holiday drink in 5 years.
• Starbucks For Life: A contest to give 14 lucky customers free Starbucks for life.

25. News about Competitors September-October 2015
Dunkin Donuts has
caught on to the popularity
of Fall beverages and also
releases their own line of
“Fall products.”
If you’ve ever had the
Starbucks caramel
macchiato, you know that
it is great….Dunkin
Donuts has caught on.
To the left: Mccafe is testing a
new green apple smoothie in
certain districts and regions
To the right: As if we weren’t
competing with McCafe
enough, now this company
has decided to sell its own
bags of coffee.

26. Recent News about Competitors December 2015
• Costa Coffee: Costa has released a hashtag on social media encouraging the use of
spreading the holiday cheer #MerryChristmasToMe The company has released a
12 days of Christmas Advent Calendar, packed with competitions, price draws,
games and special offers on the run up to Christmas. They also released their
holiday treats and beverages such as the the Gingerbread and Cream Latte and the
Brie, Bacon, and Cranberry Panini.
• Tim Horton’s: Tim Horton’s has also released a hashtag on social media
encouraging the spread of holiday cheer. The hashtag that is going around is
#WarmWishes. The company has released seasonal beverages and treats such as
the holiday sugar cookie and the Sugar Cookie Latte as well as a Candy Cane
cappuccino and Candy Cane Hot chocolate. Tim Horton’s also promotes its
nutritional value items on its main web page.

27. Top Brands by Dollar
• STARBUCKS CORP: Revenue: $18.4 billion Net
Income: $2.7 billion
• TEAVANA: Revenue: $202 million Net Income:
$14 million

28. Growth Trend of Starbucks
Source: Sites.google.com/starbucksgrowth.png

29. Growth Trend of Teavana
• Teavana was started in Atlanta, Georgia in 1997, with the opening of the first teahouse
at Lenox Square.
• December 31, 2012: Starbucks officially owns Teavana
• 2013: In the company’s annual report, released in September, the financial segment
that includes Teavana grossed $393.7 million for the year which was up 88.7%
compared to the previous year largely due to the contribution from Teavana, but the
exact amount Teavana contributed was not stated. Net revenue for the segment
increased $185 million during the year, “driven by incremental revenues from the
acquisition of Teavana in the second quarter of fiscal 2013 (approximately $156
million),” according to the financial filings.
• Schultz said that “one year into the integration of Teavana, we are poised to begin the
roll out of additional stores on the heels of the successful opening of our first two
Teavana tea bars in New York City and Seattle.” The company, which currently operates
366 stores, intends to open 1000 more in the next five years. This averages 4 to 5 stores
per week, a threshold easily met by a company that currently opens 1,500 coffee shops
a year.
• March 2014- Teavana Oprah Chai makes its huge debut. At the company’s annual
meeting in March CEO Howard Schultz introduced Oprah Chai Tea in a surprise
announcement that brought the celebrity on stage to discuss her love for tea.
• Teavana currently has over 355 stores.

30. Category Share by Country
Source: Huffpost.com/StarbucksCoffeeCup

31. Category Share by Region

32. Category Share by Country and Region
• TEAVANA: The company has over 400+ locations throughout
the United States, Canada, Asia, Mexico, Puerto Rico and the
Middle East.
• On March 18 Teavana President Annie Young-Scrivner told investors
“we realized a large portion of the business is actually outside of
North America. Out of the 66 countries that Starbucks does
business in today Teavana is only in 7, a large portion of the $125
billion category actually resides in Asia,” she said.

33. Pricing Trends
• Starbucks is a master of employing value based pricing to maximize profits, and the company uses
research and customer analysis to formulate targeted price increases that capture the greatest
amount consumers are willing to pay without driving them off. In Starbucks case, price increases
throughout the company’s history has already deterred the most price sensitive customers, leaving
a loyal, higher-income consumer base that perceives these coffee beverages as an affordable
luxury.
• In order to compensate for the customers lost to cheaper alternatives like Dunkin Donuts,
Starbucks raises prices to maximize profits from these price insensitive customers who now depend
on their strong gourmet coffee.
• Rather than trying to compete with Dunkin Donuts, Starbucks uses price hikes to separate itself
from the pack and reinforce the premium image of their brand and products. Since their loyal
following isn’t especially price sensitive, Starbucks coffee maintains a fairly inelastic demand curve,
and a small increase can have a huge positive impact on their margins without decreasing demand
for beverages.
• Also, only certain regions are targeted for each price increase, the prices vary across the U.S
depending on the current markets in those areas. For example, the most recent price hikes affect
the Northeast and sunbelt regions, but FL and CA prices stay the same.
• Starbucks also applies price increases to specific drinks and sizes. By raising the price of a tall
brewed coffee exclusively, Starbucks is able to capture consumer surplus from the customers who
find more value in upgrading to a Grande after witnessing the price of a small drip with tax climb
over the $2 mark.

34. Starbucks pricing 1994-2015
• 1994: a tall coffee cost $1.25 and was a gourmet treat not an everyday commodity.
• 1997: Starbucks raises the price of coffee by a nickel and espresso drinks by a dime.
• 1999: A cup of coffee goes up about 10 cents in the US and Canada.
• 2000: Starbucks raises the price of coffee drinks from 5-15 cents in San Francisco, San Diego,
and Sacramento.
• 2004: Price for a regular coffee raised 10 cents, and a mocha goes up a quarter. But
customers are hooked, so they barely flinched.
• 2006: Most coffee drinks cost an additional 5 cents in the US and Canada.
• 2007: Mocha Frappuccino's go up by an average 20 cents in early January. In July, Starbucks
raised prices on other coffee drinks by about 9 cents per cup, due to higher dairy prices.
• 2009: The prices on simple drinks such as lattes and brewed coffees fall by 5-10 cents, while
more labor intensive drinks like Frappuccino's and Macchiato's become about 30 cents more
expensive.
• 2010: Starbucks raises its prices on some large sized and “complicated” drinks. A regular tall
coffee remains about $1.50.
• 2011: Starbucks boosts the price of a tall coffee 15 cents in the Midwest, Hawaii, Pacific
Northwest, and Southern California.
• 2012: The Northeast and Sunbelt states see prices rise about 1 percent. Tall coffee goes up 10
cents.
• 2013: Nationwide, prices go up about 1 percent.
• 2015: Size of a tall coffee is now $2.00 even.

35. Competitor News:
• Dunkin Donuts plans to close 100 of their stores: Dunkin Brand
announced that one of its franchisees will be shutting down 100 of its
stores in the next 15 months. Dunkin’ said a spike in the cost of eggs due
to the recent avian flu outbreak in the U.S. was a reason along with
concerns with the rise in minimum wage laws in cities across the country.
• Last month, New York became the first state to raise the minimum wage
for fast-food workers to $15 an hour. Despite these closures, the company
rolled out its 2015 plan to have 410-440 new Dunkin stores throughout
the U.S. to help build its coffee culture.
• Dunkin Donuts also unveiled a new delivery system that is set to begin in
2016 where a customers donuts and coffee can be delivered right to their
door.
• Dunkin Donuts perks up their loyalty battle with Starbucks: Starbucks has
one of the most successful loyalty programs going, and now its coffee
competitor is attempting to launch something similar.

36. Competitor News:
• The story of McCafe: When competing on price can fail. In America,
the price of McCafe drinks is actually hurting them. McCafe in the
USA is seen as too cheap and therefore “nasty.” Coffee seems to be
a social signifier and for the same reason one would not go to Wal-
Mart to buy a suit, consumers just don’t want to visit a McDonald's
for their daily coffee.
• However, McCafe in Australia is thriving due to their well-developed
market. McCafe in America is guided to just “stick with it.”
Eventually espresso drinks will become a staple and not just a
luxury. Then this will be McCafe’s chance to shine again.

37. Demographics of Users
• Men and women aged 25-40 account for nearly half (49%) of its
total business. These people are Starbucks primary target market.
• Young adults aged 18-24 total 40 percent of Starbucks sales.
Starbucks positions itself as a place college students can hangout,
study, write term papers, and meet people. The young adult
audience grows 4.6 percent each year.
• Kids and teens are also a large part of Starbucks target audience.
Customers aged 13-17 account for just 2% of Starbucks sales, but
most items for kids are purchased by the parents.

38. Frequency of Purchase/Usage
• The industry’s demand for premium coffee and snack products are
mainly driven by a number of factors which include disposable
income, per capita coffee consumption, attitudes towards health,
world pricing of coffee and demographics.
• The average Starbucks customer visits the store six times per month while
the heaviest 20% of customers go to Starbucks at least 16 times per month

39. Place of Purchase
• Americans in the western region of the U.S are 64% more
likely than average to visit Starbucks. Starbucks Americas
operating segment is comprised of approximately 73% total
net revenues in Fiscal 2014.
• China is on track at becoming Starbucks largest market
outside of the U.S. Starbucks is rapidly expanding its store
count in Asia.

40. Heavy User Profile
• Consumers such as newlyweds and new parents are going through life
changes that can potentially turn them into heavy users of Starbucks.
• Adults aged 25-40 men and women are generally the heavy users of
Starbucks, making up nearly half of the sales. Starbucks’ appeal to this
consumer age group through hip, contemporary design that is consistent
in its advertising and decor, and working to keep its products current as
status symbols.
• Customers tend to be urbanites with relatively high income, professional
careers and a focus on social welfare. This target audience grows at a rate
of 3 percent annually.

41. Awareness and Attitude
• The image and brand awareness of a business are vital to its individual success. As
consumers, we don’t really think of the importance of branding or how an individual
brand plays a significant role in our day to day life.
• Starbucks has the power to influence so many people around the world. Coffee is often
a daily ritual for lots of consumers around the world.
• Reasons why Starbucks has a high brand awareness and has formed great attitudes:
• Starbucks has such a high power in the market, that even by simply using the Starbucks
logo in a coffee shop, it automatically draws in more customer’s. This is due to the
great branding and the great attitude this company shares throughout the 63
countries this coffee chain is located in.
• With the companies great marketing strategies, free Wi-Fi, comfy and relaxing store layouts
and top notch coffee, its no wonder why this company has built such a great reputation.
• Starbucks are also very accessible, making it easy to spend money there.
• The company is also very innovating and trustworthy coming out with new products for
season and holidays. They always keep the drinks new and exciting, and the promotions are
outstanding especially on their digital app.
• Starbucks displays its passion for the coffee business by using its employees to always highly
connect and welcome its day to day customers.
• Starbucks likes to keep its environment relaxed, but at the same time they hope to be quick,
convenient and familiar. Therefore, the brand awareness is well known and individual
customers have formed very high attitudes of this chain.
• The company lives by its barista promise to re-make a drink until the customer is satisfied so
therefore they will always leave happy. This high customer service and innovation has lead
the company into one of the most well known brands in the world! They are definitely doing
something right.

42. The Purchasing Cycle:
Source: Smartinsights.com

43. Decision Maker vs. Purchaser
• There are two kinds of buyers. Ones that go through the “Consumer Decision Making
process” and one’s that just “Purchase” and take less time to weigh their options. However,
every single customer goes through this process before trying out a new product or brand.
• The 1st stage that would lead a customer into a Starbucks store is the need recognition of coffee.
Starbucks is one of the top coffee brands and people automatically think of this company when
wanting to satisfy a need.
• Starbucks belongs to a low-involvement product purchase, and the customer usually doesn’t know
what they would like to order until they step inside the store. So, the information search takes
place once the customer steps inside of a Starbucks.
• This coffee chain provides many in store promotion by eye catching product images and advertising
or having promotions such as “Frappuccino Happy Hour” to help sway a consumer’s decision. After
a customer spends some time inside, he or she usually notices the store’s unique ambient that the
store offers.
• Starbucks involves alternative evaluation generally because of its unique experience. Starbucks is
able to promote friendliness and great communication and conversations through their employees.
They generally make the customer feel good about being in a Starbucks. Therefore, Starbucks is
considered a high-prestige brand.
• The next stage is purchasing. Usually a customer walks in the store for a cup of coffee, so that is
what he or she leaves with. In most cases, the customer already had in mind of purchasing before
they even entered the store to begin with.
• Most Starbucks customers know that they can expect a great experience from Starbucks, and
because of the great customer service customers leave satisfied with the product they purchased
(Purchase evaluation.) Because Starbucks is so well established and has a intense amount of loyal
customers, the Consumer Making process is pretty irrelevant. It is basically reduced to two stages:
Need Recognition and Purchase.

44. Normal Purchase Cycle
• There are 5 stages of the Purchase Cycle: 1) Problem Recognition 2) Information Search 3)
Alternative Evaluation 4) Purchase Decision and 5) Post-Purchase Behavior.
• Starbucks comes into play very minimally in this cycle since the purchases at a coffee shop are very
low-involvement.
• During the problem recognition cycle, a consumer realizes that they would like an energy boost and
realize that they would like some coffee at a coffee shop.
• For the second part of this cycle, a consumer usually performs internal and/or external research.
Since buying Starbucks doesn’t require much risk or consequences, this thought process is very
minimal. Internal search is where the consumer uses his or her own knowledge usually for
frequent purchases like this trip to Starbucks. External search is knowledge the consumer does not
have and therefore needs to seek out information from friends, family etc. to make the best
decision possible. The consumer most likely uses only the internal search for this process, since
Starbucks is one of the most well known coffee brands in the world and doesn’t require any heavy
decision making.
• The third part of the purchase cycle is alternative evaluation. This is when a customer narrows
down to whether (for example) they would like to stop at a Dunkin Donuts or a Starbucks on the
way to work.
• The fourth part of the purchase cycle is the Purchase Decision. This is the step where the
consumer finally chooses to visit a Starbucks. In this step, a customer usually decides what exact
Starbucks to go to, what one is closer to where they are going, etc.
• The last step is the Post-Purchase Behavior. A typical customer at Starbucks would feel much
happier and more “awake” after their daily caffeine intake. Lots of customers feel very happy after
their decision to purchase a latte or a cup of coffee. However, there are a select few who feel
poorly after a bad experience or a bad drink they might have had.

45. Brand Loyalty vs. Switching
• Most coffee drinkers are loyal to their franchise (71% according to the chart
below). However, there are a considerable number of Dunkin Donuts and
Starbucks consumers who jump between coffee houses. The chart below shows
the percentage of coffee drinkers who also visit competitor brands.
Source: Experian.com

46. Starbucks loyalists vs. Dunkin Donuts loyalists
Source: Civicscience.com

47. Brand Loyalty
• Word of Mouth Marketing Transfers Brand Loyalty- 92% of
customers around the world trust word-of-mouth
recommendations from friends, family, and colleagues above all
other forms of advertising. Starbucks is very big on word-of-mouth
marketing, so I believe there is some sort of link between this and
the number of brand loyal consumers this company has.
• Starbucks also has a loyalty program and an app in which
consumers receive free drinks, coupons, and much more. This also
plays a part in the number of brand loyal consumers that this
company has.

48. Creative Marketing Strategy
• Key elements from Starbucks marketing strategy:
• Getting personal with customers
• Adding value (free Wi-Fi etc.)
• Clusters of coffee shops.
• “Brand Marketing” or Great Word of Mouth- word-of-mouth recommendations
are a cornerstone of Starbucks marketing strategy, particularly when new stores are
launched. Starbucks marketing budget can be as little as 1% of Starbucks spend on
advertising. Word of mouth is a process of building up a customer base of loyal fans. The
Starbucks marketing strategy has always focused on “word-of-mouth” advertising and letting
the high quality of their products and services speak for themselves. For years, this has been
uniquely Starbucks, and it has played a huge part in making Starbucks Coffee Company a
success.
• Great offers: Starbucks has clearly embraced the digital realm. The brand has set a high bar
when it comes to being social and engaging its customers.
• “Perfect Cup of Coffee”: Starbucks places a huge emphasis on product quality. Their coffee is
notorious for satisfying customers with its rich, delicious taste and aroma.

49. Creative Marketing Strategy Cont’d
• “Third Place”: From the very beginning, the Starbucks Marketing strategy has focused on
creating the “third place” for everyone to go to between home and work. Creating this
unique and relaxing “experience” and “atmosphere” for people has been very important for
the company as they have realized that this is one of the strongest concepts attached to the
company, to which customers have been strongly attracted
• ”Customer Satisfaction”: Customer satisfaction is a very important issue with Starbucks.
From entrance to the store to the very last drop of their coffees, it is a must that customers
feel the uniqueness of enjoying their Starbucks coffee experience.
• Creating a Starbucks community: The Starbucks marketing strategy has even expanded to
create a community around their brand. On their website, individuals are encouraged to
express their experiences with Starbucks history, and the company strives to “personally”
join in the discussions.
• Smart Partnerships: Starbucks Coffee Company has been known to create strategic
partnerships that demonstrate the fact that another way to grow your business is to partner
smart. Over the years, the Starbucks Corporation has greatly increased sales just by using this
strategy.
• Innovation: Through the years, the Starbucks Coffee Company has been known to think up
creative and innovative ideas to add to their products or services. They’ve added different
flavors to their coffee, more food on their menu, and even became one of the firsts to offer
internet capability in their stores.

50. Starbucks Mission, Values & the Barista
Promise
• Starbucks Mission: “To inspire and nurture the human spirit—one person, one
cup, and one neighborhood at a time.
• Starbucks Values: Creating a culture of warmth and belonging, where everyone
is welcome. –Acting with courage, challenging the status quo and finding new
ways to grow our company and each other. –Being present, connecting with
transparency, dignity, and respect. –Delivering our very best in all we do, holding
ourselves accountable for results. We are performance driven, through the lens of
humanity.
• Our Barista Promise: Love your beverage or let us know. We’ll always make it
right

51. Appeals
• Starbucks’ strategy of providing a personalized service to their customers has enabled it to
retain its clientele. Personalized services offered by Starbucks include flexible changes to the
orders, personal greeting, and memorizing of the favorite orders for its customers.
• The customer intimacy and human touch is an essential aspect in ensuring customers’
appeal. The company also provides great quality products served in clean and convenient
placed stores.
• In addition, the company offers a friendly and a fast service in a pleasant atmosphere.
• Its coffee shops are located in strategic locations where its clientele could access for a coffee
drinking ritual. Most importantly, its high quality coffee is served in a special and intimate
ambience according to each customer’s taste and preference.
• Appeal to ages 25-40 by contemporary design that is consistent with its advertising and
décor. Appeals to ages 18-24 (mostly college students)-the company positions its outlets as
ideal places for college students to spend their leisure time, hold group discussions, and meet
new people. Company appeals to this segment through new technology.
• Starbucks focuses on social networking in cultivating a youthful image. In addition, it offers
free Wi-Fi in its stores to attract the young audience.
• In recent years Starbucks has focused on teens aged 13-17 years in a bid to increase its
market share. It has introduced caffeinated, sugary, whipped cream topping drinks and
steamed milk with focus on teenagers. Since teens normally travel with parents, it is crucial
to provide products that they can identify with.

52. Social Responsibility
• “We have always believed Starbucks can – and should — have a positive impact
on the communities we serve. One person, one cup and one neighborhood at a
time.”
• Community: Every store is part of a community, and we take our responsibility to be good
neighbors seriously. Bringing people together, helping provide education and employment
opportunities and making a difference in
people's lives – it's all part of being a good neighbor and a sustainable company. Starbucks, even as
a public company, has always believed that we can balance profitability and a social conscience.
(Opportunity for Youth, Community Service, veterans and military support, diversity and inclusion,
Starbucks College Achievement Plan, Farming Communities, create jobs for USA, (Starbucks)RED).
• Ethical Sourcing: We’re committed to offering high quality, ethically purchased and responsibly
produced products. Helping people thrive helps ensure the long-term sustainability of the premium
products we provide. Whether it’s coffee, tea, cocoa or manufactured goods, we’re committed to
offering ethically purchased and responsibly produced products of the highest quality.
• Environment: Minimizing our environmental footprint and inspiring others to do the same. Our
comprehensive approach to reducing our environmental impact means looking at all aspects of our
business, how they intersect and how we can integrate new solutions to create meaningful and
sustained change. (Water and energy conservation, recycling ad reducing waste, climate change).
• Global Responsibility Report: Over the next few years, our efforts will increasingly focus in
three areas where we think we can have the biggest impact – building a future with farmers,
pioneering green retail on a global scale, and creating pathways to opportunity for young people.
With your input, we want to set ambitious goals, some of which we may not achieve. But I strongly
believe that today, more than ever, companies such as Starbucks must lead, using their platforms
and resources to create opportunities for their people, as well as for the communities they serve.

53. Seasonality
• Starbucks really only specifically markets and is in the media when new drinks launch
for the season that creates a lot of hype.
• The Pumpkin Spice Latte is Starbucks most popular seasonal beverage of all time.
The “PSL” has a strong social media following of its own, after bursting on the social
scene last fall with its launch of Twitter and Tumblr pages.
• Other favorite seasonal beverages come around Christmas time. This causes a lot of
media attention, and is great for revenue boosting. Some of the famous holiday
beverages are the eggnog latte, chestnut praline latte, caramel brulee latte, skinny
peppermint mocha, peppermint mocha, and the gingerbread latte.
• For many, the holidays officially return when the company launches these anticipated
seasonal beverages that go in the seasonal “red cups”. Within the first 48 hours of
Starbucks launching their red cups last year, a photo of Starbucks holiday red cups were
shared on Instagram every 14 seconds. On Twitter, holiday tweets will also be a bit
more festive this year with a red holiday cup emoji hashtag appearing after the hashtag
#Redcup or #redcups.

54. Regionality
• Depending on your region of the country, Starbucks either got the
“seasonal” Starbucks Vampire Frappuccino or the Starbucks Frappula
Frappuccino. These Frappuccino's were released specifically to kick off
Halloween. If you were in Europe and Latin America, your local
Starbucks received the Vampire Frappuccino. The U.S, Canada, and
Asia Pacific stores got the Frappula Frappuccino.
• Another regional item that is coming to Asia this upcoming holiday are
Starbucks gift cards decorated with Swarovski crystals.
• Also, a “Starbucks Green Apron Delivery Service” begins in the Empire
State Building. How it works: Created specifically for the unique
characteristics of the building, Starbucks Green Apron Delivery Service
will allow Empire State Building tenants to order a selected set of food
and beverages via a dedicated website. Beverages will then be
handcrafted by Starbucks baristas in a designated kitchen within the
building.

55. Media Employed by Top Brands
• A brands employees are socially connected and they have great influence over the company.
• There are 3 kinds of media of content marketing:
• 1) Owned Media: Starbucks and Teavana’s website, social media pages, and email
databases
• 2) Paid Media: the typical ads promoted by these companies.
• 3) Earned Media also known as “the other people”: the ones who share your stuff.
• All 3 types of this media have their share of strengths and weaknesses. For example having
“Owned Media” like social media pages is great because you can control it. However, you do
not have control of what trolls the page might consume and negative comments you may
have to read.
• Paid Media is great because it reaches out to a wide variety of prospective consumers but
the downside is that it is not cheap, and costs money!
• Earned Media is great because it is free and it is great because it comes from individuals
sharing your business content and is great at trust building and the general reputation of the
brands. However, in order for your posts to be shared, you really have to earn it by coming
up with some creative and interesting content. And anyone can tell you, this is much harder
than it sounds!
• Starbucks and Teavana use all three of these types of media.
• Starbucks uses their social media pages wisely and is one of the most liked consumer brands
on Facebook. Starbucks and Teavana both connect with their consumers on a level out of
this world.
• Although, Teavana hasn’t consumed as many fans as Starbucks, they are building a great fan
base on their social media pages and will soon grow because of this.

56. Spending Patterns
• In 2011, Starbucks spent 244 million dollars in Marketing/Advertising. In 2012, the company
spent 277.9 million. In 2013, they increased to about 306.8 million and by 2014 they had
spent 315.5 million dollars in marketing/advertising.
Source: Onlinemarketingtrends.com

57. Spending Compared with Market Share
• Starbucks dominates the coffee industry with a market share of 36.7%.

58. Competitor Spending
• In 2012, Dunkin Donuts was ranked #12 for the most media
spending company, ahead of Starbucks by 6 spots. Dunkin
Donuts spent a whopping $135 million on advertising, a
majority of that being on television. (82%).
• When McCafe first started in McDonald's, it launched a $100
million dollar rollout campaign showing TV commercials,
internet ads, billboards, etc.

59. Promotions
• A majority of Starbucks’ sales promotions are dispersed through their loyalty
program. For every transaction you make at Starbucks, you rack up stars. For
every 12 stars, you earn a free beverage or food item of your choice (no limits.)
This loyalty program also gives out free birthday beverages and random lucky
dozen free drinks and coupons (such as 50% off a breakfast sandwich.)
• In addition, they also hand out samples of promotional or seasonal beverages or
pastries hoping to make sales off of it. They also have Point-of-Purchase displays
which catches the eye of the consumer and then generates extra sales.
• They also have ran contests in the past, such as last Christmas when 14 lucky
Starbucks customers won Starbucks for Life. And just for playing, customers also
randomly received free pastries as a prize, or a free cup of coffee to keep the
incentive going.
• They will also discount retail products or give free shipping on their website.
• They also do holiday promotions such as buy one, get one on all holiday
beverages.

60. Major Brand Promotions & Examples
• Loyalty Program: A customer has an incentive to load money onto their Starbucks
card and earn points for every purchase made at Starbucks.
• Another major brand promotion is the holiday promotions. They do really well
during the holiday season, when they have buy one get one holiday beverages.
• They also do Frappuccino Happy Hour to kick off the start of the summer which
also drives in a lot of consumers.
• They will also include coupons from your morning receipt that you can retrieve
during an afternoon visit (usually after 2PM) for half off a cold beverage, iced tea,
pastry, or whatever promotion they are doing at the time.)
• Sampling is also fairly big within the company. Although it is not always ideal due
to short staffing and the busy hours of the store, it is very effective at making sales.
Customers will usually take recommendations of the employees, because they
value their opinion.

61. Success Rate/Growth of Loyalty Program
Source: Marketrealist.com

62. Competitor Promotions
• Dunkin Donuts just added on their very own loyalty program similar to
Starbucks which includes a free drink just for signing up. Also, Dunkin
Donuts gave out free coffee on National Coffee Day, which is something
that Starbucks did not do.
• McCafe sometimes hand out coupons and they have also ran “social
hour” promotions in certain areas such as Southern California with buy
one, get one McCafe drinks. At one time, they also had a special going on
for ANY SIZE hot coffee or iced coffee for only $1 hoping to drive in some
customers due to its very low price. McCafe’s current promotion is the
medium Pumpkin Spice Latte going for only $1.99 as well as with any
other McCafe premium beverage.

63. Digital Strategy: Starbucks Website
• http://www.starbucks.com/

64. Starbucks Website

65. Purpose of Starbucks’ Website
• To drive in customers and inform them about the company,
building up their brand and also allowing a customer to
shop for their favorite items online.
• To push the online shopping incentive, Starbucks often
provides free shipping on either all orders or orders above a
certain price. The company also has lots of deals such as
25% off flavored syrups or tumblers.
• The website includes all of the retail anyone can imagine
that is often not sold in local Starbucks locations.
• Starbucks also wants each individual who visits the site to
see how great they are as a company and what they do for
their employees (which is listed in depth on the site.)

66. E-Commerce Activities
• Starbucks isn’t a brand that one would think
would have a need for e-commerce operations.
Starbucks business module is one where walking
into the location is actually part of the
experience. After all, the company offers free Wi-
Fi and actually encourages people to come inside
their stores and loiter. However, Starbucks will
introduce an e-commerce service for its
customers beginning some time in 2015. Now,
people will have an opportunity to order their
favorite beverages or food items and have them
delivered directly to their workplace.

67. E-Commerce Activities Cont’d
• "Imagine the ability to create a standing order of Starbucks delivered
hot to your desk daily," Howard Schultz, CEO of Starbucks, told Fast
Company. "That's our version of e-commerce on steroids."
• "The pilots are coming soon," said Matt Ryan, Starbucks' global chief
strategy officer. "We are going to be looking at a number of different
options. There will probably be a multiple number of solutions that we
go with them in terms of how we operationalize this."
• The move by Starbucks highlights how important e-commerce has
become for companies; even those with operations - on the surface at
least - appears wouldn't benefit from online transactions. For
companies like Starbucks and others that want to conduct consumer
transactions over the Internet, there are a number of things to be
mindful of outside of simply creating an online purchasing portal. The
goal is to not have an individual make a one-time purchase, but to turn
them into loyal customers who keep coming back.

68. • Facebook: Starbucks is one of the most liked consumer
brands on Facebook with a whopping 36,085,800 likes.
Although the company posts a few times a week and the
posts are usually only eye catching images, each post still
manages to gain thousands of likes and hundreds of
comments. The company uses Facebook as a huge way to
connect with their customers, reaching out to them when
they are unsatisfied or even replying to a customer
complimenting the way the business is run. If there were any
brand to use as an example of a correct way to run a Facebook
account, Starbucks would be the one.

69. • Twitter: Starbucks takes on an equally relaxed attitude on Twitter,
tweeting about 10 times a day on average. The company repeatedly
tries to promote through hashtags, encouraging fans to use the same
hashtags on their own photos. Around the holidays, the hashtag
#RedCups was the number one trending topic on the site, promoted by
Starbucks of course. The company uses Twitter to engage with their
fans a little differently than on Facebook. The content is not the same
as Facebook, different pictures and posts are made specifically for
Twitter. The company also re-tweets and replies to most, if not all of
their customers. Customers feel like their voices are always heard with
Starbucks through this platform, hence why the account has made it to
11.4 million followers.

70. • Instagram: When it comes to Instagram, Starbucks is great
at posting eye catching images of their products that draw
consumers in. The company is famous at stretching every
piece of content out to different social media channels as far
as it can. In other words, you will find a lot of similar content
on Starbucks other social media sites such as Facebook or
Twitter. However at the same time, to make them less
predictable, new content is generated for each specific social
media outlet as well. You will find certain posts on Instagram
that you will not find on any of their other social media
accounts. Just enough to keep you checking this site
constantly. Starbucks has a whopping 7.5 million followers on
its account.

71. • Pinterest: Starbucks tries to engage their Pinterest
audience on a daily basis with coffee and tea recipes
boards along with “How To’s” and “Coffee Crafts”
(DIY’s). They also display many of their retail through
Pinterest, since the site is used by a majority of
females. The company has over 234.6K followers
with a numerous amount of pins (2.9K) and 23
different boards. Now that is a lot of material.

72. Search Engine Optimization

73. Search Engine Optimization

74. Market Automation Effort: MyStarbucksIdea.com
Source: Linkedin.com/Starbucks

75. Social Media Strategy
• Social Media enhances the customer experience and
improves customer interaction.
• Starbucks social media strategy is guided by 10
principles: 1) Listen; 2) Be transparent; 3) Use
authorities; 4) Be human; 5) Share timely
information; 6) Offer personal attention; 7) Be
humble in replies; 8) Don’t preach; 9) Give fans
access; 10) Don’t spam users.

76. Brand Value
• Starbucks has become one of the world’s most beloved and trusted brands, and we can tell
you what creates our brand strength. In a survey of all of the people who consider
purchasing at Starbucks because of brand appeal, they do so because: 47% love the Starbucks
brand because of the connection between partners and customers; 27% say they love the
way Starbucks treats its people; 26% love the coffee.
2015 brand performance*
Brand value $11,115 million
Brand rating AA+
Enterprise value: $58,885 million
Value / enterprise value 18.9%
* Figures taken on 31st December 2014.
2014 brand performance*
Brand value $9,976 million
Brand rating AAA-
Enterprise value: $43,380 million
Value / enterprise value 23.0%

77. Source: Experian.com

78. Source: Experian.com

79. Source: Experian.com

80. Qualitative Research
• The questions below were asked to a few individual
Starbucks customers at a Starbucks in Allen, TX on
12/09/2015:
• If you could describe Starbucks in a few words, what
would it be?
• If you could see Starbucks expanding into anything else
that it currently already doesn’t do, what would it be,
what service would it be offering, or what would the
company start selling?
• What would improve your Starbucks customer service
experience?

81. Qualitative Research
• Key words describing Starbucks from the customer point of view:
• Addicting
• Quality
• Friendly Baristas
• Various coffees
• A “splurge”
• Innovative
• Recognizable
• Trendy
• Professional
• Cozy/ Homey
• Fast-Food
• To summarize, most of these key-words are very positive and powerful in
describing positive customer experiences. However, one negative description to
the company would be “Fast-Food”. As a coffee company that is supposed to be
trendy, professional and cozy, it should not be known as “Fast-Food”. Starbucks
does not want to be known as Fast Food, they want to be known as the “Third
Place” also known as the place you visit between work and home to relax and get
work done at.

82. Qualitative Research
• In the minds of the Starbucks frequent customers, if Starbucks could
expand they would…
• “Start selling clothing merchandise in stores. As cheesy as that may sound, Starbucks
has a very high prestige name and people would actually purchase this kind of stuff. I
could see them being successful on baby clothing and meme shirts/other retail with
humorous sayings such as “Without you I’d be depresso.” or “We appreciate you a
latte.”
• “I would expand the stores to cater to children better that still are café style, but not
prepackaged chips or applesauce. When I take my children here for breakfast, they
don’t really have options here. I end up buying them a full sized sandwich only to give
them a half of it.”
• “I could see Starbucks expanding their stores and cater more to the people who go to
the stores to just hang out. I think it would be cool to include a library style bookshelf
or magazines, that the customers could use at their leisure.”
• “Starbucks needs a consistent delivery coffee service where they focus on catering
items to business meetings. Like platters of breakfast treats and the delivery of the
coffee travelers and other personalized drinks people may order. I always want to pick
up travelers and pastries for our business meetings but am really crunched for time.
This delivery service would really be beneficial both to the company and business
people.”

83. Qualitative Research
• What would improve your customer service experience?
• Here are some of the answers that were given by these same
Starbucks frequent customers.
• “Improve the mobile ordering system.”
• “Make sure ALL of the stores are consistent in their beverage
making. Sometimes I LOVE my iced coffee, but other days I really
cannot even finish it.”
• “It would be nice to target the thrifty customers like myself to
disperse more deals, that way I don’t have to feel like I’m splurging
every time I want a Frappuccino.”
• “The baristas could consistently check on customers throughout
their café visit, and assist them in coffee or tea refills, etc.”

84. Quantitative Research
Source: SurveyMonkey.com

85. Quantitative Research

86. Quantitative Research

87. Quantitative Research

88. Quantitative Research

89. Quantitative Research

90. Recommendations
• There are 196 countries in the world. Starbucks is in 63 of them. That is roughly
1/3 of the world. This just puts things into perspective on how much power this
company has on not only the United States, but throughout the entire world.
• Starbucks seems to have it all figured out with their booming business and
thousands of locations. However, here are some of the recommendations as to
what they can improve upon primarily based upon my Quantitative research:
• Starbucks needs to find a way to try and up the sales of their breakfast sandwiches
and other food items. Although the demand may be high for breakfast here, a lot
of people might be turned away from purchasing them due to the high price. I
would suggest a “dollar breakfast sandwich day” or “half priced lunch” day. Based
on my Quantitative Research, roughly only 20% of customers actually purchase
food while visiting a Starbucks. Also, the average person only goes to Starbucks
and spends between $4 and $6, only getting their beverage.
• My Quantitative Research also showed that Starbucks customers either visit a
location more than 6 times per month, or barely at all (between 0 and 2 times). In
my opinion, I think something should be done as an effort to try and get these
customers to stop by more and spend more money.

91. Recommendations
• Throughout my Qualitative Research, I gathered a lot of opinions and recommendations
from the regular Starbucks’ customers perspective. Here are some of the
recommendations that they thought of for the company to improve upon:
• Starbucks’ should ensure proper training throughout all of their stores to enhance the
quality and taste of each individual beverage. Customers visit Starbucks and pay a
descent amount of money for their cup of coffee or espresso beverage and it is only fair
if it is made to the highest standard and quality that it should be. For example,
Starbucks released a new “Flat White” beverage about a year ago, and it seems some
baristas have not had the proper training on how to correctly make one.
• As far as adding new associations and extensions to the company, some of the
recommendations would be to add a new clothing and other merchandise line to the
stores and to expand the size of the stores, adding library shelves and magazines for
customers to read at their own leisure.
• Catering more to children would be another suggestion to the company. There aren’t
any specific food items for children besides prepackaged food and chips, etc.
• Also, I would advertise my RTD&E (Ready To Drink & Eat) foods a little more. It seems a
bit unorganized and overwhelming when you walk into a Starbucks. There are random
snacks and food items scattered throughout and some of them are a little unnoticeable.

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