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Home , Second Cup, Tim Hortons, Torrefazione Italia

STARBUCKS DATABASE MARKETING ASSIGNMENT

JUHI

1 | P a g e STARBUCKS CANADA Company Analysis:

The Starbucks Story

Our story began in 1971. Back then we were a roaster and retailer of whole bean and ground , tea and spices with a single store in ’s Pike Place Market. Today, we are privileged to welcome millions of customers through our doors every day, in more than 17,000 locations in over 50 countries.

Folklore

Starbucks is named after the first mate in Herman Melville’s Moby Dick. Our logo is also inspired by the sea – featuring a twin‐ tailed siren from Greek mythology.

Starbucks Mission

Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

Our Coffee

We’ve always believed in serving the best coffee possible. It's our goal for all of our coffee to be grown under the highest standards of quality, using ethical sourcing practices. Our coffee buyers personally travel to coffee farms in Latin America, Africa and Asia to select the highest quality arabica beans. Once these quality beans arrive at our roasting plants, Starbucks experts bring out the balance and rich flavor of the beans through the signature Starbucks Roast™.

Our Stores

Our stores are a welcoming third place for meeting friends and family, enjoying a quiet moment alone with a book or simply finding a familiar place in a new city. Total stores: 17,009 (as of January 2, 2011) 8,870 Company‐owned 8,139 Licensed store

Operating in more than 50 countries Argentina, Aruba, Australia, Austria, Bahamas, Bahrain, Belgium, Brazil, Bulgaria, Canada, Chile, , Cyprus, Czech Republic, Denmark, Egypt, El Salvador, England, France, Germany, Greece, Hong Kong, Hungary, Indonesia, , Japan, Jordan, , Lebanon, Malaysia, , New Zealand, Netherlands, Northern Ireland, , Peru, , Poland, Portugal, , Romania, Russia, , Scotland, Singapore, South Korea, , Sweden, Switzerland, Taiwan, , Turkey, , United States and Wales.

2 | P a g e STARBUCKS CANADA Our Products

Coffee: More than 30 blends and single‐origin premium arabica . Handcrafted Beverages: Fresh‐brewed coffee, hot and iced beverages, coffee and non‐coffee blended beverages, Vivanno™ smoothies andTazo® teas.

Merchandise: Coffee‐ and tea‐brewing equipment, mugs and accessories, packaged goods, music, books and gift items. Fresh Food: Baked pastries, , salads, oatmeal, yogurt parfaits and fruit cups. Consumer Products: Products in 13 countries (Austria, Canada, China, Denmark, Germany, Ireland, Japan, Korea, Mexico, Norway, Spain, UK and U.S.) in three categories:

 Coffee and Tea: Whole bean and ground (Starbucks and Seattle’s Best Coffee brands), Starbucks VIA® Ready Brew, ® tea filterbags and tea concentrates.  Ready‐to‐ (RTD): Starbucks® bottled ® coffee , Starbucks Discoveries® chilled cup coffees, Starbucks Doubleshot® espresso drinks, Starbucks Doubleshot® Energy+Coffee drinks; Seattle’s Best Coffee® Iced , Tazo® bottled iced and juiced teas.  Starbucks® : Super‐premium coffee and coffee‐free flavors.

Brand Portfolio

Starbucks Coffee, Seattle’s Best Coffee, Tazo Tea, and Torrefazione Italia Coffee.

Objectives

Starbucks is an American brand following the same traditions all over the world including Canada, they serve different type of Coffee products, food and drink including serve free Wi-Fi to satisfy growing customer needs. They have even launched their brand of coffee beans so that the customers can enjoy the same Starbucks taste with comfort in their home. Their main objective however will be to provide most unique coffee experience to their customers, some of their other objectives are mentioned below

3 | P a g e STARBUCKS CANADA A. Starbucks offers new design and concept which makes them the No # 1 choice of their loyal customers B. Starbucks have established some unique and innovative strategies to acquire new customers like having the customer’s name on your coffee cup, customer recognition C. To maintain their brand image throughout with amazing service and great quality products. Situation Analysis

 Company and Product

Starbucks is constantly striving hard to provide customer one stop for unique coffee experience. The Store are always in immaculate condition and often is place where people get together for studying or even meet friends. Starbucks is sometimes location landmark at certain places. Starbucks being an international company has close to 55,000 stores around the world and more than 4000 stores in Canada. The company is growing tremendously and is now again becoming a market leader with increasing sales. In past few years Canadian coffee market is growing close to 157 % and new entrants have limited space to grow, Since Starbucks is an established company in Canada it has opportunity to increase competition by taking customers from its competitors. Starbucks is a premium coffee shop with prices sometimes beyond the reach of certain group of people and now machines are available to make good coffee at home. Economic conditions have also created lot of issues like increase in oil prices, transportation prices have increased, as best coffee beans comes from places around the world such as Africa and South America . Starbucks is still working hard to provide best consumer experience and great coffee at the best price possible.

 Competitive Analysis

Tim Horton’s is one of the biggest competitors in Canada for Starbucks, with Second cup catching up. Tim Hortons offers low priced coffee in price sensitive market, and customers who have poor knowledge about coffee and focus on the price factor are attracted to ’s. Some new local coffee shops are also threats to Starbucks, as customers would prefer local stores nearby than driving all the way to some Starbucks coffee shop for a cup of coffee in Canadian climate.

4 | P a g e STARBUCKS CANADA Marketing Strategy

 Positioning strategy

Starbucks is under the expansion phase, opening coffee shops in new locations and near densely populated areas. Starbucks have coffee shops close to malls, retail shops or even urban business areas so that customers does not have to travel far to get their favourite coffee. Starbucks logo is one of the most recognizable logo in the world, and having a Starbucks coffee cup in hand is a sense of pride for loyal customers who do not want to be seen with competitor’s products. Starbucks coffee shops are huge, with great ambience, comfort and proper space allotment with the smell of freshly brewed coffee. This helps customers to relax and enjoy their time with friends and family or even business associates to peacefully have a business conversation and to order a cup of coffee again.

 Product strategy

Starbucks has always been innovative with their Products, offering new holiday flavours apart from their regular coffee products. Starbucks have always been associated with coffee, but now they have also included other products such as Starbucks coffee beans, coffee maker, frappe, chocolate drinks, sandwiches etc and off lately on 4th February 2015, Starbucks Canada president mentioned about revamping their strategy

Starbucks baristas: Make room for bartenders — and a carbonation station for teas and juices.

An evening menu of wine, beer and tapas, including flatbreads, olives, nuts and cheese, will be launched at the coffee chain’s locations in and other big cities by the end of the year, Starbucks Canada president Rossann Williams told The Star in her first sit-down interview since taking the helm nine months ago.

She said the company’s aim is to appeal to women, who make up 60 per cent of Starbucks’ customers and don’t necessarily like to hang out in bars with their friends. She says the idea has been a hit so far in big U.S. cities.

5 | P a g e STARBUCKS CANADA In order to maintain high quality and great customer service all the Starbucks are operated and service by Starbucks partners i.e. Starbucks employees making them one the largest self-operating coffee shops in Canada and around the world, Since Starbucks have long term contracts with their partners, prices are always in control. Starbucks is very lucky for one critical fact – coffee is addictive so sales and customers will always remain, all Starbucks needs to do is provide customers with satisfactory customer service experience and great new products and innovation. Starbucks coffee range includes espresso and drip brewed coffee including whole bean coffee and beverages including hot and cold drinks, sandwiches, Panini, pastries and salads. Starbucks also offers Starbucks card which is reloadable and for different occasions.

 Market share

“There are nearly 40 Starbucks locations for every 1 million Canadians.”

Among the findings from Quartz:

 The United States leads the world in the total number of outlets, at more than 11,500.  Canada is No. 2, though far behind, at almost 1,400.  But on a per-capita basis, Canada is at the top, with 39.54 stores per million people, followed by the United States at 36.25, Kuwait at 22.13, Singapore at 18.01 and Hong Kong at 13.34.  By city, Seoul has the most outlets, at 284, followed by at 277, at 256, London at 202, Chicago at 164 and Toronto at 160.

Competitors Analysis

The 2 major competitors of Starbucks Canada are Tim Horton’s and Mc Donald’s. 62% of Canadian consumers say they visit coffee cafes at least weekly, and 12% do so daily, according to Technomic’s 2013 Canadian Bakery & Coffee Cafe Consumer Trend Report. And among the 34% of consumers who report visiting coffee cafes more often in the past year, convenience and service speed were cited as top factors encouraging their increased patronage.

6 | P a g e STARBUCKS CANADA Tim Horton’s currently stands head and shoulders above other restaurant chains in Canada in terms of domestic system wide sales: Its Canadian sales stood at $5.9 billion in 2012, versus McDonald’s Canada’s $3.8 billion and Starbucks Canada’s $978 million. Still, while Tim Hortons’ sales were up 6.2% in 2012, Starbucks Canada’s were up 8.8%, and McDonald’s Canada’s rose an also-impressive 5.7%.

STRENGTHS WEAKNESSES Market leader Expensive Strong brand loyalty Local competitors International Presence Limited products Strong brand equity Over priced Strong financial background High developed supply chain Free wifi OPPORTUNITIES THREATS New markets and locations Local businesses New innovative ideas New entrants Service improvement Price wars Offers Economic crisis Healthy food and organic trend Anti Starbucks groups and unions

FEATURES BENEFITS Free Wifi Customer convenience Loyalty card Time saving Contests and offers Customers can browse online, finish important meetings Great customer service Good faith

7 | P a g e STARBUCKS CANADA International brand Customer comfort Huge stores Free goodies/gifts Drive through Customers don’t need to wait in long queues

Market Plan (Target Market)  Geographic o Region : Canada o Area : All the areas o Density : Majority urban o Climate : All seasons

 Demographics o Age : above 15 years of age o Gender : All o Income : All income groups o Occupation : Any o Education : Doesnt matter o Race : Not applicable

 Psychographic o Personality : Coffee lovers o Lifestyle : Healthy people leading active lifestyle

 Behavioural o Consumption rate : Regular o Benefits : Great taste, great service o Loyalty : People looking for quality and service.

Analysis of Consumers

Starbucks store is targeted to consumers from all walks of life, i.e. from 15 years of age and above, anyone who likes good coffee is welcomed at the store.

8 | P a g e STARBUCKS CANADA Everyone is given equal treatment whether its male or female. Starbucks have also tied with various organisations such as being associated with World Aids day which creates good faith among buyers. Starbucks have been foremost in community service and youth program, they have also started Starbucks Foundation and funds. Creative elements

Starbucks logo is one of the most recognized logo in US and Canada. Almost everyone in US and Canada has heard about Starbucks and once in their lifetime may have passed by the store or at least been in one. Starbucks have been forefront in creating new products for the benefits of their customers, and they have some signature themes, like the smell of fresh coffee at each and every Starbucks the same, logo placements, seating arrangement are all the same. This enables the customer to recall the brands distinctive image. Database Requirements

Starbucks has its own loyalty card which gives them inside view of their most loyal customers, and they can always come up with new programs which increases loyalty also allow referrals which in turn increases customers base with Starbucks

LTV and Referral Program

9 | P a g e STARBUCKS CANADA The Lifetime Value or the LTV of Starbucks customers is shown explained below with help of a chart

10 | P a g e STARBUCKS CANADA Starbucks already has a My rewards card which is said to be the best card in the retail industry. Upon implementing the My Rewards program Starbucks saw a record setting quarter. The program helped increase revenue by 11% to an astonishing $3.6 billion. Executives pointed to the increased participation in the loyalty program as the main driver of these amazing results.

APPENDIX

11 | P a g e STARBUCKS CANADA http://www.starbucks.ca/about-us/company-information

http://www.forbes.com/sites/greatspeculations/2014/01/30/starbucks- profits-surge-despite-sales-slowing-down/

http://www.macleans.ca/economy/business/starbucks-takes-on- timmys/

http://business.financialpost.com/news/retail-marketing/starbucks- canada-to-open-150-new-outlets-in-biggest-expansion-ever

https://blogs.technomic.com/coffee-war-heats-up-in-canada/

12 | P a g e STARBUCKS CANADA