Starbucks began as a small coffee shop in 1971 and has since grown into a global brand with over 16,000 locations worldwide. The company aims to establish itself as the most recognized brand globally through its focus on coffee quality, creating a third place experience in its stores, and innovation. While facing competition, Starbucks is expanding its retail presence internationally and developing new products to continue its long-term goal of dominating the specialty coffee market.

1. Peer PEER SHMELZER MORATIN MKTG 6000 MAY 2011P STARBUCKS

2. TABLE OF CONTENTS 2 Coffee Statistics 3 Starbucks’ History 4 Starbucks’ Mission 5 Starbucks’ Vision 6 Starbucks’ Six Principles 7 Starbucks’ Unconventional Marketing Strategy 8 Starbucks Expansion Strategy 11 SWAT Analysis 12 Competitors 16 Starbucks Today 17 Summary 19 Works Cited 20

4. Among coffee drinkers the average consumption in the United States is 3.1 cups of coffee per day.

5. 50% of the population, equivalent to 150 million Americans, drink espresso, cappuccino, latte, or iced/cold coffees.

6. Independent coffee shops equal $12 billion in annual sales.

7. At the present time there are approximately 24,000 Coffee Shops across the country. Statistics show there will be approximately 50,000+ Coffee Shops by the year 2011.

8. Americans consume 400 million cups of coffee per day making the United States the leading consumer of coffee in the world.3

10. Starbucks’ Mission "To inspire and nurture the human spirit - One person, One cup, and One Neighborhood at a time." 5

11. Starbucks’ Vision “Establish Starbucks as the most recognized and respected brand in the world." 6

13. Embrace diversity as an essential component in the way they do business.

14. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of their coffee.

15. Develop enthusiastically satisfied customers all of the time.

16. Contribute positively to their communities and their environment.

17. Recognize that profitability is essential to their future success.7

18. Starbucks’ Unconventional Marketing Strategy Starbucks chose an unconventional marketing strategy that may be unique and seldom-tried, that will most perfectly match the concept that the company wants to portray. Perfect Cup of Coffee- Emphasis on product quality. Their coffee, even though priced slightly more expensive than expected, is notorious for satisfying customers with its rich, delicious taste and aroma. Third Place- Creating this unique and relaxing “experience” and “atmosphere” for people to go to between home and work has been very important for the company as they realized that this is one of the strongest concepts attached to the company, to which customers have been strongly attracted. 8

19. Starbucks’ Unconventional Marketing Strategy Customer Satisfaction–From the 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. 9

20. Starbucks’ Unconventional Marketing Strategy Innovation- Through the years, they’ve added different flavors to their coffee, more food on their menu, and even became one of the first to offer internet capability in their stores. Brand Marketing- 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. 10

22. Ensure city is able to support 20 or more locations in the hub within the first two years

23. Once hub is blanketed, open more stores in smaller city areas around the region

24. Implement zone managers to oversee the development process of each hub11

26. Established logo, developed brand,copyrights, trademarks, website andpatents

28. Valued and motivated employees, good work environment

30. Customer base loyalty

31. Widespread and consistent

32. Strong Board

33. Strong financial foundation12

35. Lack of internal focus (too much focus on expansion)

36. Ever increasing number of competitors in a growing market

37. Self cannibalization

38. Cross functional management

39. Product pricing (expensive)13

41. Technological advances

42. New distribution channels (delivery)

43. New products

44. Distribution agreements

45. Brand extension

46. Emerging international markets

47. Continued domestic expansion/ domination of segment14

49. US market saturation

52. Cultural and Political issues in foreigncountries 15

54. Dunkin Donuts

55. McDonald's

56. Green Mountain Coffee Roasters

57. Coffee Bean and Tea Leaf

58. Costa Coffee

59. Peet'sCoffee and Tea

60. Caribou Coffee

61. Second Cup

62. Kraft

63. Procter & Gamble

64. Nestlé16

66. Total net revenues increased 10% to 2.8 billion

67. EPS increased 21% to $0.34 in Q2 FY11 compared to $0.28 in Q210‘s 16,706 Starbucks stores in the world located in more than 50 countries Number of Starbucks’ stores world wide Starbucks around the Globe 17

68. Starbucks Today Starbucks vs. Industry This Chart compares Starbuck's stock to the Special Eateries Industry average. As depicted by the graph, Starbuck's has been a defining force in the industry, as the industry average follows the exact same pattern/line, just slightly below Starbucks, for the past five years. 18

69. Summary What was once a small coffee shop opened by Gerald Baldwin, Gordon Bowker, and ZievSiegl in 1971, Starbucks Coffee Company has grown into the number one specialty coffee retailer. With over 16,000 coffee shops in more than 50 countries, the company’s main objective is to establish Starbucks as the “most recognized and respected brand in the World. Currently, Starbucks is relying on retail expansion, product innovation, and service innovation to achieve a long-term goal of creating a chain of coffeehouses that would become America’s “third place”. By working toward this goal, Starbucks wants to open new stores in both new and existing markets, expand their product development process, and cater to customers’ needs to eventually improve their financial position and dominate market share. 19

71. Kembell, Brent, Michelle Hawks, Sean Kembell, Leonard Perry, and Luke Olsen. "Catching the Starbucks Fever - Starbucks Marketing Strategy." Open Sharing of Academic Unpublished Papers & Research Papers. Academic Mind, Apr. 2002. Web. 06 May 2011. <http://www.academicmind.com/unpublishedpapers/business/marketing/ 2002-04-000aag-catching-the-starbucks-fever.html>.

72. Starbucks Coffee Company. Web. 29 Apr. 2011. <http://www.starbucks.com>.

73. "Starbucks Marketing Strategy." Why Do People Vote - Vote For Us. Voteforus. Web. 01 May 2011. <http://www.voteforus.com/starbucksmarketingstrategy.html>.

74. "Starbucks Mission Statement." Business Intelligence: How Your Business or Organsation Can Rapidly Benefit! Web. 05 May 2011. <http://www.rapid-business-intelligence-success.com/starbucks-mission-statement.html>.