This project assignment shall provide some insights into the problems Starbucks has to face today, why they occurred and how they might be solved. More specifically this project focuses on the question: why have customer difficulties perceiving values added by Starbucks?
Table of Contents
1. Introduction
2. Methodology
3. Theory
4. Brand portrait
4.1 Business strategy
4.2 Brand portfolio
4.3 Brand characteristics
4.4 Starbucks in the market
5. Problems of Starbucks and their solutions
5.1 Lost focus and incorrect decisions
5.2 Increased competition
5.3 Aggressive expansion strategy
6. Conclusion
Objectives and Core Themes
This work examines the challenges faced by the global coffee brand Starbucks, specifically addressing the growing customer difficulty in perceiving the brand's unique added value. Through an analysis of the company's business history, strategic decisions, and market positioning, the project explores how competitive pressures, a diluted brand focus, and aggressive international expansion have impacted the company's core identity and its relationship with customers.
- Analysis of brand equity and strategic brand identity.
- Evaluation of the impact of brand extensions on customer perception.
- Assessment of the "Third Place" concept and sensory marketing strategies.
- Critique of aggressive international expansion and market saturation.
- Development of strategic recommendations for refocusing on core brand values.
Excerpt from the Book
4.2 Brand portfolio
Starbucks offers a very broad brand portfolio, which is extended from time to time. In the beginning focussing on its core product – highest class coffee -, the brand added especially through co operations lots of additional offers. Starbucks certified towards fair trade regulations (Keller 2008:314). Other drinks that are labelled by Starbucks are Frappucinos that introduced Starbucks into supermarkets (Keller 2008:313), coffee sold in 12-ounce bags by Kraft (Keller 2008:313) or the Shade Grown Mexican coffee (Keller 2008:314). Starbucks also found its own charity Foundation (Keller 2008:314) and sells coffee brewing equipment like the Starbucks Barista Aroma thermal coffeemaker in its stores and via catalogue (Keller 2008:314). When Starbucks noticed that the must customers come in the first half of the day to the stores, they introduced Sandwiches and other lunch items (Keller 2008:320).
Starbucks also acquired firms in order to extend its product lines and profit from the other firms experiences (Keller 2008:315). One important example of such an acquisition is Tazo Tea, which offered the possibility to sell premium tea in Starbucks stores, restaurants and supermarkets (Keller 2008:315). For the Starbucks Company it was always important just to partner with companies that follow the same objectives and values as they did (for example the highest quality possible). To offer a special service to its customers Starbucks started with the in-store and catalogue sale of books and CDs, they also released a special mix CD every season in cooperation with Capitol Records (Keller 2008:315). Another partnership with Oprah Winfrey led to the sale of books her book club recommended by Starbucks (Keller 2008:315).
Summary of Chapters
1. Introduction: Provides an overview of the history of Starbucks, the evolution of its mission under Howard Schultz, and the formulation of the central research question regarding customer perception of value.
2. Methodology: Outlines the approach to analyzing the brand, including the theoretical framework based on marketing research and the secondary data sources used to investigate current business challenges.
3. Theory: Defines the core concepts of brand equity, competitive advantage, and the differences between functional, emotional, and social brand values in the context of consumer choice.
4. Brand portrait: Details the company's business strategy, its diverse brand portfolio, visual identity, and its market positioning as a "benefits brand" focused on providing a premium experience.
5. Problems of Starbucks and their solutions: Discusses critical challenges including the loss of core focus due to brand extensions, the impact of increased competition from fast-food chains, and the risks associated with an aggressive global expansion strategy.
6. Conclusion: Summarizes the personal reflection on Starbucks' future, emphasizing the need for the brand to return to its core focus and authentic values rather than prioritizing mere expansion and profit.
Keywords
Starbucks, Brand Equity, Competitive Advantage, Brand Portfolio, Customer Value, Sensory Marketing, Brand Extension, Global Expansion, Third Place, Market Saturation, Brand Identity, Marketing Strategy, Coffeehouse Culture, Strategic Focus, Consumer Perception
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on analyzing the Starbucks brand, specifically investigating why the company has faced difficulties in ensuring customers perceive the added value of its products and services amidst rapid growth and market changes.
What are the primary themes discussed in the work?
Key themes include the evolution of the Starbucks brand, the role of brand equity, the impact of brand extensions, the challenges of competitive market differentiation, and the consequences of an aggressive global expansion strategy.
What is the primary research question?
The research is driven by the question: Why do customers encounter difficulties in perceiving the values added by Starbucks?
Which scientific methods or theoretical frameworks are used?
The analysis relies on marketing theory, specifically utilizing frameworks from de Chernatory & McDonald regarding brand equity, Neumeier’s perspectives on brand focus, and Pine & Gilmore’s "Experience Economy" model.
What topics are covered in the main body?
The main body examines Starbucks' internal brand portrait, its business objectives, the diversification of its portfolio, the specific challenges caused by brand dilution, and the competitive pressures from other coffee retailers.
What characterizes this brand analysis?
The work is characterized by its critical look at how "lifestyle" brand extensions and rapid geographical expansion can potentially lead to the loss of a company's core identity and competitive edge.
How does the author evaluate the "Third Place" concept?
The author highlights the "Third Place" as a vital component of the Starbucks experience, describing it as a comfortable, social gathering point between home and work that provides customers with a sense of relaxation and aesthetic value.
What is the author's stance on Starbucks' current expansion strategy?
The author argues that the current aggressive expansion strategy is potentially counterproductive, suggesting that focusing on the US market and specific promising niches would be more sustainable than attempting to maintain a global presence in saturated markets.
- Citation du texte
- Silke Specht (Auteur), 2009, The Starbucks Brand, Munich, GRIN Verlag, https://www.grin.com/document/232182
