Introduction
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INTRODUCTION Starbucks is known to be the world’s largest coffee company. With over 17000 locations in over 50 countries the brand has positioned itself in customer mindset through its quality product, service and environment. The marketing plan is going to investigate the possible launch of the franchise of Starbucks Coffee shop in Dhaka, Bangladesh. The focus of the report is the analysis of the marketing and the financial forecast of the project to determine the success and return of the proposed project. MISSION AND VISION The mission is to introduce Starbucks as a franchise of the original Starbucks of Seattle Washington in Bangladesh in order to deliver the signature coffee and quality experience that had always been the trademark of Starbucks. We will focus on making our Amsterdam store successful by adapting to the needs of the local customers while keeping the core Starbucks strengths intact. This store will set a positive example of corporate social responsibility by adhering to our high environmental standards and create a positive experience for customers to create repeat business. Vision: We see a world in which we inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Mission: To introduce Starbucks, the most recognized and respected brand in the world, in Bangladesh with the highest quality whole bean coffee. Starbucks thrives to provide the world with joy and inspire the people to see what we see. We continue to be the most recognized and respected brand of coffee in the world and will never stop providing our consumers with the highest quality of whole bean coffee. Our mission and vision provides our consumers, partners and prospective sponsors with our beliefs and morals with no room for misinterpretation. CURRENT MARKETING SITUATION The international market of Starbucks Coffee Company is in 49 countries with more than 16500 stores. Starbucks was based on the idea that enjoying a cup of coffee is a social experience. Our project aims on delivering the same experience in Dhaka by franchising The Starbucks Company and hence utilizing its brand equity. Bangladesh has recently encountered a boost in the Page | 1 entertainment sector of its economy where social hangouts with friends and peer have recently captivated the youth culture. With a few competitors like Gloria Jeans and Coffee World the consumer group is not left with much of option to diversify their experience. Since Starbucks had always stuck with the motto of delivering the most expensive coffee in the world our target consumer group is the elite social group that either reside or work in Banani, which is equivalent to the Beverly Hills in Bangladesh. MARKET DESCRIPTION We would segment our market based on Demographic segmentation. For Demographic segmentation we would primarily focus on the age group discrimination. The targeted age groups that lie between 17-25 are more concerned about the environment and the service that comes with the product. It is much easier to develop brand loyalty among this targeted segment. Therefore the venue should provide incidental services like free Wi-Fi zone and couch seating arrangement as they usually accompany in groups. The 25-40 group is all working class and therefore are more concerned about the product than the experience. Hence in order to satisfy this consumer group we should offer take-away coffee in disposable Starbucks Cup. ANALYSIS OF STARBUCKS THROUGH SWOT ANALYSIS SWOT analysis is an excellent tool in evaluating the strength, weakness, opportunity and threat of the proposed project particularly because the project involves the risk of penetration of a foreign franchise into the domestic market. Strength Brand equity: All across the globe Starbucks is well established as a pioneer in the Coffee Company. This well established brand equity can be easily liquidated to customer equity through awareness. It provides a range of different quality coffee that has been its Unique Selling Point in Bangladesh market because the concept is still not dispersed in the Bangladesh market and it has to survive through few competitors who include Gloria Jeans and Coffee World. Extended worldwide network and community helps to generate insight into consumer behavior and quality expectation thereby giving it an edge against its competitors. Page | 2 Weakness The premium price charged against the product (coffee and other incidentals) reduces its number of target consumer group because the economy of Bangladesh has a lower GDP than the other countries where Starbucks is dispersed. There had been events of past failure of similar projects when started in Holland because of differentiation on evaluation of domestic consumers against a broad spectrum of international homogenous consumer group. Opportunities As previously discussed the takeaways in Starbucks customized parcel bearing its logo could serve as an excellent tool for promotion among the demographics of its targeted customers. Also by providing an excellent and memorable location in adjacent with the quality product will allow the Starbucks franchise in Bangladesh to gain competitive advantage to its customers. Increased revenue with expanding new market base is another opportunity for Starbucks. Threat The political disruptions in Bangladesh can have an impact on the operations of the Starbucks coffee shop in Bangladesh. Such disruptions can hinder the revenue generation stream and also hence cause risk if the capital structuring is through non-recourse debt financing. The stealing/copying of brand name and logo with slight/ minor alteration is a common practice in Bangladesh and there had been recent cases and several victims of the same which also include the franchise KFC. Page | 3 SWOT ANALYSIS OBJECTIVES AND ISSUES Objectives We have set aggressive but achievable objectives for the first and second years of market entry. First-year objectives. During 2014 initial year on the market, we are aiming for unit sales volume of BDT 5,000,000. Second-year objectives. Our second-year objectives are to sell a combined total of one million units and break even early in this period. Issues In relation to the product launch, our major issue is the ability to establish a well-regarded brand name linked to meaningful positioning. We will invest heavily in marketing to create a Page | 4 memorable and distinctive brand image projecting innovation, quality, and value. We also must measure awareness and response so we can adjust our marketing efforts as necessary. MARKETING STRATEGY Segmentation: The segmentation part will be similar to the standard Starbuck segmentation. We will use demographic, psychographic and behavioral segments. First of all, the demographic segmentation will focus on age, income and occupation. We see the 15-40 group as our main customer. This correlates with our own observations in French and Swiss Starbucks’. This group can be divided in two other groups. The group 15-25, and the group 25-40. The first group will have a lower income, and probably be students. This is the youngest generation, and for this segment Starbucks has to be hip and modern. The other group is probably working and has a higher income. The difference between the groups is also that the first group will probably use the sitting space whereas the second will most likely be customers who make purchases and consume them outside of the store. In the psychographic segment we have focused primarily on lifestyles segmentation. This is very similar to the demographic segment above. The students will have another lifestyle than the working group. Another lifestyle segment will be the people who drink coffee, and those who do not drink coffee. This is a crucial segment, because Starbucks has to have an image that you don’t have to be a coffee drinker to enjoy Starbucks. The behavioral segment is the most interesting one, and also the segment that can be the most influenced. It is strong because we can create new segments. First of all, we will segment customers with respect to benefit and usage. Benefit segmentation is for the customers who go to Starbucks because of the Starbucks products or Starbucks service. So the segmentation here will be (again similar to the demographic and psychographic) the people who prefer to sit down and enjoy their product and the buy & go customers. The usage can be divided into light, medium and heavy users. We recommend focusing primarily on the high usage segment. The advantage of this type of segmentation, mentioned before, is that Starbucks can create a new behavioral segment group and through this, new customers. This can be achieved through segmenting customers based on their desired benefits. A very recent example of this, introduced in several Starbucks’ through the world is wireless internet. This is an extra incentive to go to Starbucks, because of the creation of benefits driven segments, in this example, customers who use wireless internet. Page | 5 Target Market: Starbucks strives to provide it consumers with a product that best fits the consumer’s needs. To do this we have selected a specific target market to provide for: Male and Female Age 15-35 Inner city residence White collar ambiance career Environmentally friendly consumer Generally purchase more than just coffee Latte, specialty flavors, reusable cups Positioning Strategy Starbucks has already brand equity therefore the objective is to convert the established brand equity in international market into customer equity in Bangladesh market. Our marketing will focus to deliver the signature coffee and quality experience that had always been the trademark of Starbucks. Product Positioning Quality Ambiance Frame of Reference: “PREMIUM QUALITY” Pricing Strategy Starbucks already has a reputation of having the most expensive coffee in the marketplace. Therefore we try to retain the Starbucks ideology by following the Market skimming pricing which focuses on setting high initial prices to skim revenues layer by layer from the market.