The report provides an overview of Starbuckss strategic development. It is an established brand on the target market of coffee and other soft drinks. It refers to the implications between the brand and the target clients in the given niche. The research offers a critical evaluation of the Starbucks brand and its strategic development based on four steps. Considering the research findings, the researcher shares certain recommendations that could help Starbucks to enhance its strategic brand management in the target industry. The suggestions of the researcher also provide some insights on findings effective solutions to solve the existing problems of the brand.
The report outlines an extensive business review with regards to both primary and secondary research results. It reflects the outcomes of the study in four different steps. The fundamental aspect of concern is a coherent history of brand development. The study also includes general information about the company and its strategic brand plan. It also considers the efforts in building brand equity that represents brand elements, integrated marketing communication, and effect of the country of origin. At the same time, the research covers the brand performance with regards to its measuring and interpretation. The final step is the ways to grow and sustain brand equity by means of brand architecture, brand portfolio, its hierarchies, and brand extension.
Coherent Story of Starbucks Development
Starbucks Company is one the primary chains of transnational coffee houses all over the global. It is located in Washington DC, United Stated and has around seventeen thousand subsidiaries across more than forty countries. According to the corporate history, the company was founded in 1971 by three individuals, such as Gordon Bowker, Zev Siegl, and Jerry Baldwin in Seattle, United States. In eleven years, Starbucks Corporation welcomes Howard Schultz on the position of a Director of Retail and Marketing. After Howard Schultz reviewed the approach of Starbucks to its target customers, he offered an idea to establish coffee houses all over the place.
The purpose is not only to create a store that sells coffee and beans. Instead, it makes more sense to found a place for people to stay and drink coffee. Moreover, it should be the place to interact with other people and share personal or professional experience based on the interests of different individuals. Nevertheless, the board members of Starbucks did not accept such vision for the company and its development in the future. The perception of the company and its executives was merely to the fact that people should prepare and drink coffee at home. It means that the focus of the company would be different if the board of directors approves an innovative business approach of Howard Schultz.
The contradiction of the Starbucks executives made Howard Schultz quit his position in 1986 and start his Italian Coffee business, known as Il Giornale. In a year of professional business activities, Howard Schultz purchased Starbucks Corporation with all its stores. Afterwards, the reconsidered the brand strategy of selling coffee based on his insights gained while operating coffee houses at Il Giornale. It became the birth of a well-known global company that people know today as Starbucks. In the next year, the company opened three more coffee houses both inside and outside the United States. The goal was to scale the existing business in the international context. In 1992, the company entered the stock market with a hundred and sixty-five outlets across North America. Another strategic approach of Howard Schultz was to acquire various competing companies in the target coffee market. As a result, Starbuck became present all over the United States.
Step 1: General Information About the Brand and Its Brand Plan
Starbucks Company is an American coffee brand and a famous chain of coffee houses located all over the United States. Since the birth of the Starbucks Corporation in 1971, the company operates in approximately twenty-four thousand locations all over the globe. The brand plan of Starbucks corresponds to utilising certain strategic principles. The fundamental branding strategy of the company consists of different elements, which help the company to remain on the top lines of the Fortune 500 companies . Refer to the brand plan and its strategic intentions that include the following elements:
- Utilising High-Quality Coffee Beans;
- Employing Baristas Employees;
- Taking Advantage of Corporate Social Responsibility;
- Managing Effective Physical Environment;
- Considering the Best Locations Globally.
Step 2: Building Brand Equity
The initial logo of the Starbucks Company was a graphical representation of a siren or a twin-tailed mermaid. The idea behind the logo is in the Greek mythology that illustrates the ways to attract people. Howard Schultz applied the same principle to acknowledge that the sailors in the legend are the target customers whereas the sirens represent the coffee brand. They all live on an island in South Pacific, which is a representation of the so-called Starbuck Island. The idea behind the logo of the company is to attract the target clients from the target market and target industry as a whole . Refer below to the identification of logo elements and their meaning:
The intention of Howard Schultz was to make its logo recognisable by the target clients all over the place. He succeeded in such intention since the popularity of the company grows every single day. Refer to the Starbucks logo below and its changes overtime for the reference:
Integrated Marketing Communications:
The communication of the company with its target customers starts with a favorable approach to the employees of Starbucks. Currently, the company has more than two hundred and thirty million target clients every week. It has a positive impact on the duration of their stay in the coffee houses . As a result of such marketing communication and use of integrated strategies, the company tends to transform its new clients to the repeated ones in a month. However, such high efficiency of operations is based on the high-quality personnel working with a strong faith in the Starbucks brand.
The key to mutual understanding is in the treatment of employees as business partners. The same applies to the interactions of the employees with the target customers worldwide . It results in successful relationships in the workplace and helps the company to guarantee high reliance, ability to adapt to the working conditions, gratitude, and integrity among all the Starbucks members. In addition, the company trains employees to serve the target customers in the best possible way, which assures its high ranking in the Fortune 100 list of companies.
Country of Origin Effect:
The effect of the country of origin is obvious. Howard Schultz tends to meet the needs of the target population in the United States. The same applies in the other related markets that the company has as the penetration targets. It also refers to the ideas that the unique coffee drinkers need the product to be of the highest possible quality with all the applicable brand attributes, such as services, simplicity, branding, customer care, and alternative business offers. At the same time, the country of origin represents the opportunities for people to have a cup of coffee and share the thoughts and experiences at the end of each day. People could sit at the Starbucks coffee houses and entertain themselves with coffee and pastries of a different kind.
Step 3: Measuring and Interpreting Brand Performance
The brand performance of Starbucks reflects a global presence of its affiliated Starbucks coffee houses, which is known as the second wave coffee. The idea of Howard Schultz is to differentiate its brand from other coffee serving venues across the United States. The primary difference is in high-quality coffee and unique taste that form an astonishing experience of the target customers. Besides, the company takes advantage of darkly roasted coffee that is so attractive to the target audience. It represents the third wave of coffee producers to deliver the target clients with lighter roasts. At the same time, the company takes advantage of the automated espresso machines which ensure high efficiency of the end production.
Thus, the approach to the development of the company and its brand led to prosperity. It happened due to an innovative approach of Howard Schultz to delivering more value to the target audience. Even in the period of economic recession, the company turned out to be efficient and remain afloat. A great advantage of the brand reputation refers to the presence of Starbuck in many locations outside the United States. Overall, it counts over one-third of annual revenues every year.
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Step 4: Growing & Sustaining Brand Equity
There were many changes to the logo of the company and its original design. It changed while adding more products and services to the target audience over time. As a result, the company has a polished logo, which positions its business to the target communities of high-quality coffee drinkers. Refer below to illustrated changes that applied to the Starbucks logo overtime:
It is important to acknowledge that Starbucks coffee houses serve both hot and cold drinks, comprising whole-bean coffee, coffee latte, micro ground instant coffee, espresso. It also includes both full- and loose-leaf teas, such as Teavana, fresh juices, La Boulange pastries, Frappuccino beverages. The company also provides its target customers with a variety of snacks, such as crackers, chips, and the Pumpkin Spice Latte. Starbucks also offers pre-packaged meals, such as hot or cold sandwiches, and drinkware, such as mugs or tumblers. It also considers the other drinks, such as wine, beer, or appetisers. In addition, Starbucks serves its branded coffee with ice cream or bottled cold coffee drinks all over the grocery stores in the United States and other countries.
It is imperative to consider that the scaling effect was achieved by Howard Schultz due to opening several new locations every single day starting from 1987 and continuing to 2007. Another important fact is that in December 2016, Howard Schultz resigned from the position of CEO in favour of Kevin Johnson who will officially accept his position in April 2017.
It includes more than thirteen thousand coffee houses in the United States, more than two thousand subsidiaries in China, around a thousand and a half coffee houses in Canada, more than a thousand stores in Japan, and almost a thousand new ones in South Korea. It is a global brand plan that the company performs on the regular basis while striving to enhance it with various improvements and use of innovative technologies .
The study is based on the marketing implications of Starbucks. It relates to the performance of the brand and strategic brand management insights. The performance of the company refers to all the levels of knowledge that apply to an international business context. The report considers a discussion on the choice of brand and its presence in the target market. It also corresponds to a particular wealth information that could support the brand development strategy. The study evaluates the activities of the brand based on four steps towards strategic brand management. The researcher discusses some characteristics of the Starbucks brand in each step.
At the same time, the research offers possible recommendations about the use of effective branding strategies that could enhance overtime. The findings consider an in-depth discussion of all the outlined four steps referring to the analysis of the company. Thus, the outcomes of the study are presented from the position of comprehensible results and reliable findings. The considerations are based on the use of pertinent literature and revealed evidence on the implications of marketing the business along with an appropriate management of its brand strategies.
Utilising High-Quality Coffee Beans:
The quality of Starbucks coffee is the primary aspect of concern among the target customers of the brand. The company continues using the coffee beans delivered from Africa, Asia, North and South America. Such approach of the company helped it to develop strong positive relationships with the coffee farmers. It also allows the company to control and direct the supply chain processes almost entirely. It claims a high economic viability of the coffee producers since they are engaged in the long-lasting agreements with the coffee houses globally. At the same time, such marketing approach of the company helps to decrease production costs without the loss of the coffee quality through the process of coffee-roasting.
Considering the Best Locations Globally:
Starbucks Corporation owns approximately twelve thousand outlets in the United States. The idea behind such marketing strategy is to reach the target customers and at the same time offer convenient services. It applies to all the location of the company globally. As a result of having the best possible location on the planet, the company could increase its annual sales and overall client loyalty.