Starbucks (Last)
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1) Starbucks once targeted the premium consumer segment with incomes over $28,000, attracting customers with high-quality coffee and a distinctive third place experience. 2) However, consumers began to feel that Starbucks lost touch with its core customers and no longer delivered on its promises of excellent customer service and a quality experience. 3) The global financial crisis further impacted Starbucks, forcing it to cut jobs and refocus its growth strategy on existing markets rather than new store openings.
Starbucks (Last)
- 1. Starbucks: is it still the third place?Youand Starbucks. It's bigger than coffeeGianpaolo | Lucas | Thomas
- 2. AgendaStarbucks positioning (what, who & how)Every beginning has an end Morpheus (Matrix)Assumptions: analysisA) Who is drinking Starbucks: premium segmentB) The value proposition: the promise & what is being deliveredRecommendations & Further questionsA) Customer service: is going down?B) Starbucks Growth-strategy: until 2008, crisis and currentAB
- 3. Who is drinking Starbucks: the premium segmentUrbanizationThe rise of the middle classAgeing PopulationFemale spending powerIndividualism & Single householdLifestyle changesGrowth in educationTo be sure of hitting the油target, shoot first, and call whatever you hit the油target 油Ashleigh Brilliant油The Premium Segment: Income > $ 28,000 PPPFast growing segment Segment grows 72% in 2005-2015 By 2010, more potential premium consumers in China than EuropeSource: Nestl辿 Investor Seminar 2008 (Premiumization)
- 4. Who is drinking Starbucks: the premium segmentTo be sure of hitting the油target, shoot first, and call whatever you hit the油target 油Ashleigh Brilliant油Source: Nestl辿 Investor Seminar 2008 (Premiumization)
- 5. The value proposition: the promise"For Starbucks, it's not just selling the coffee, but selling the experience Eileen Wall Distinctive product:Coffee Fresh, dark-roasted, full- flavored coffee "We will not pollute our high-quality beans with chemicals" "to build a company with soul" that will pursue the perfect cup of coffeeSource: www.mhhe.comThe Starbucks experience
- 6. The value proposition: what is beingdeliveredConsumers have toppled Starbucks from its No. 1 spot in favor of Dunkin Donuts (2007)It is what the company does, not what it says, that reinforces the brandHoward Schultz CEO & Chairman Starbucks
- 7. Customerservice: isgoingdown?A driving ambition is of little use if you're on the油wrong油road 油Frank TygerWhat do you like the least about the Starbucks in-store experience?Source: www.customerthink.com19July 2010 (P. la Castellana, Madrid)Source: www.customerthink.com
- 8. The Growth Strategy: until 2008It was sofocusedongrowthby opening new stores thatit lost touch withits core customersRohitDeshpand辿, HBSRohit Deshpand辿 Profesor Marketing Harvard BS
- 9. What about the global crisis? There might be an amplifying effect - No causalityThe Growth Strategy: the global crisisStarbucks rumoured to cut more jobsSource: es.finance.yahoo.com
- 10. The Current Growth StrategyTheres tremendous opportunity to go much deeper in our existing marketsJohn Culver, VP OperationsFOCUS FOCUS FOCUS New Strategy working? Share price goes up, future will tell
- 11. RecommendationsThe great thing in the world is not so much where we stand, as in what direction we are movingOliver Wendell H. Centralize Marketing and closely tie it to the strategy (CEO involvement) Monitor what the customer wants in order to avoid gaps between what is delivered and what is perceivedDeal with increasing local competition Communicate what makes Starbucks differentConsistently deliver on what is promisedMonitor and evaluate service
- 12. Further questions How are the sales in other channels related to the performance of the Starbucks retail? Analyze whether there is a different perception of Starbuck in divers local marketsO traveler, there is no path. Paths are made by walking.油Antonio Machado When is a market saturated? Global strategy with local characteristics?