The Best coffee for best you

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Submitted to: Maam bushra Hashim

Submitted by: Backstreets Group

Name Roll No
Ishtiaq Bhatti BBA-023R13-17
Qasim Shah BBA-023R13-21
Farhan Mehmood BBA-023R13-31
Hafiz Anan Akbar BBA-023R13-44
Sahl Khan BBA-023R13-21

BBA (Hons) 6Th Semester (Sec-A)

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Table of Contents
Page #
1.0 Executive Summary.......... 2
2.0 Introduction............. 3
3.0 Origin........ 4
4.0 Mission............ 4
5.0 Time Line View........ 5
6.0 Product Line............. 6
7.0 Advertising............ 7
8.0 Packaging........... 8
8.1 Promotion...... 9
9.0 Marketing Strategy......... 11
9.1 Market Needs......... 11
9.2 Market Growth...... 11
9.3 Value Proposition......... 12
9.4 Customer Experience...... 12
9.5 Marketing Objectives...... 12
9.6 Positioning..... 13
9.7 Marketing Mix..... 13
10.0 Success Factors......... 15
11.0 DownFall....... 16
12.0 Scope for Next 5 Years......... 17
13.0 Suggestions.......... 19

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 1.0 Executive Summary

Starbucks is the biggest competition for any new coffee house when they enter the market. They
are also the biggest. They have hundreds of locations all over the world. There are some that have
their own building and then there are those that are in airports, schools, malls, etc. The main
objective for Starbucks is to be the most respected and recognized brand for coffee and specialty
drinks.
In order to achieve this goal, Starbucks must continue to grow by expanding their locations and
make sure they are introducing new products and keeping their customers from going to other
coffee shops. They also need to make sure they capitalize on the opportunities in other countries
outside of the U.S., which will help them grow even more in the globalmarket.
Starbucks is an all around great company. They treat their employees well because to
them happy employees make happy customers that want to come back. All of Starbucks
employees are eligible for benefits and health insurance. Every employee starts above
minimum wage and they even employ the students of any of the schools they are located
in. Starbucks is also becoming more environmentally aware. They are using more products that
are recyclable and they even have boxes sitting out at all locations to recycle thesleeves off the
cups.
Starbucks is also a big contributor to local charities, especially the ones that focus on
children, homeless, AIDS research, and the environment. Starbucks prides their company
on being a strong force in not only the market but their communities as well. Starbucks
plans on continuing to have the college students and business associates as their
customers, but would also like to target seniors more as well as parents and children.

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 2.0 Introduction

Starbucks is one of the largest Coffehouse Company in the world. It is typical company-owned
store has a pleasant coffee-house atmosphere replete with couches and Wi-Fi. Starbucks also
licenses stores, not to individuals but to other businesses.
Starbucks has more than 24,000 locations in over 70 countries. In addition to the excellent
coffees and espresso drinks, people now enjoy Tazo tea and Frappuccino ice blended beverages.
The choice also includes organic and fair trade coffee made from a selectionof beans sourced
across the globe. There is also a fine selection of teas from fruit flavoursto Earl Grey and a
choice of hot chocolates. Cold drinks include mineral water and freshfruit juices. The Starbucks
experience also includes fresh and tasty snacks such assandwiches, Paninis, pastries and cakes.
Starbucks is the world's leading specialist coffee retailer, priding itself on great coffee and
friendly service in familiar surroundings.
It opens at 4.30 in the morning and gets closed at 8.30 in the evening.
The latest Starbucks Reserve coffee isRwanda Gakenke Fair trade.The coffees fromRwanda
have been winning awards and capturing the attention of coffee enthusiastsaround the world.
They used many different components, blend them together, a little of this and a little of that.
Two things for which they are known are Aged Sumatra and sun-dried Ethiopiancoffees. Aged
Sumatra is the cornerstone of two of the most popular offerings. Theseofferings are Christmas
Blend and Anniversary Blend. Some of the most respectedcoffees in the past have been the
sun-dried Ethiopian coffees from Harrar and Sidamo.They started with these two coffees.
After many experiments, they came across two coffees: Colombia and Papua NewGuinea.
These two coffees added the brighter top notes. In this way, Starbucks TributeBlend was born.
It is also known asThree Region Blendthat owns the OTRB (OriginalThree Region Blend) title
from Starbucks. Its a wonderful blend of coffees from EastAfrica, Central America and Papua
New Guinea with lush floral and herbal notes.
Starbucks VIA flavored coffee is an instant coffee with flavorful taste. It is made from the finest
ingredient, such as molasses, Arabica beans, Korinji cinnamon. This coffee will become an
essential part in breakfast.

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 3.0 Origin
The Starbucks Story
Our story began in 1971. Back then we were a roaster and retailer of whole bean and ground
coffee, tea and spices with a single store in Seattles Pike Place Market.
Today, we are privileged to connect with millions of customers every day with exceptional
products and more than 24,000 retail stores in 70 countries.

Folklore
Starbucks is named after the first mate in Herman Melvilles Moby Dick. Our logo is also
inspired by the sea featuring a twin-tailed siren from Greek mythology.

The Starbucks starts in Seattle in 1971.Jerry Baldwin, Zev Siegl, and Gordon Bowker hada
passion for fresh coffee. They opened a small shop and began selling fresh-roasted,gourmet
coffee beans and brewing and roasting accessories. The company did well, butthings began to
change in the 80s.
In 1980's, Howard Schultz joins Starbucks in 1982. In 1990's, the demand for great coffeeallows
Starbucks to expand beyond Seattle, first to the rest of the United States, and thenfurther a field.
In 2000's, The Starbucks phenomenon continues.

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 4.0 Mission
Starbucks mission is to "inspire and nurture the human spirit-- one
person, one cup, and one neighborhood at a time."

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 5.0 Time Line view
1971
Starbucks opens first store in Seattles Pike Place Market.
1982
Howard Schultz joins Starbucks as director of retail operations and marketing. Starbucks begins
providing coffee to fine restaurants and espresso bars.
1990
Starbucks expands headquarters in Seattle.
Unveils Starbucks Mission Statement.
Total stores: 84
1996
Begins selling bottled Frappuccino coffee drink through North American Coffee Partnership.
Opens stores in: Japan (first store outside of North America) and Singapore.
Total stores: 1,015
2003
Acquires Seattle Coffee Company, which includes Seattles Best Coffee and Torrefazione Italia
coffee.
Opens roasting facilities in Carson Valley, Nev., and Amsterdam, Netherlands.
Opens stores in: Chile, Cyprus, Peru and Turkey.
Total stores: 7,225
2009
Launches Starbucks VIA Instant
Opens Farmer Support Center in Kigali, Rwanda.
Launches My Starbucks Rewards loyalty program and Starbucks Card mobile payment.
Opens stores in: Aruba and Poland.
Total stores: 16,635
2015
Launches Cold Brew iced coffee and Evolution Fresh handcrafted smoothies.
Announces sixth two-for-one stock split.
Commits to hiring 10,000 opportunity youth by 2018.
Expands Starbucks College Achievement Plan to offer full tuition coverage for all four years of an
undergraduate degree for qualifying U.S. Starbucks partners. Commits to 25,000 partners graduating by
2025.
Reaches 99% ethically sourced coffee milestone.
Opens stores in: Panama Total stores: 22,519 (as of June 28, 2015)

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 6.0 Product Line
Starbucks offers a range of exceptional products that customers enjoy in our stores, at home, and
on the go.

Coffee: More than 30 blends and single-origin premium coffees.

Handcrafted Beverages: Fresh-brewed coffee, hot and iced espresso beverages, Frappuccino
coffee and non-coffee blended beverages, Starbucks Refreshers beverages, smoothies and teas.
Merchandise: Coffee- and tea-brewing equipment, Verismo System by Starbucks, mugs and
accessories, packaged goods, books and gifts.
Fresh Food: Baked pastries, sandwiches, salads, salad and grain bowls, oatmeal, yogurt parfaits
and fruit cups.

Consumer Products

Coffee and Tea: Whole bean and ground coffee (Starbucks and Seattles Best Coffee brands),
Starbucks VIA Instant, Starbucks Coffee K-Cup pods, Starbucks and Teavana
Verismo pods, Tazo tea filterbags, and Tazo tea latte concentrates.

Ready-to-Drink (RTD): Starbucks bottled Frappuccino coffee drinks, Starbucks

Discoveries chilled cup coffees, Starbucks Discoveries Iced Caf Favorites, Starbucks Iced
Coffee, Starbucks Doubleshot espresso drinks, Starbucks Doubleshot Energy Coffee drinks;
Starbucks Refreshers beverages, Evolution Fresh bottled juices, Tazo bottled iced and
juiced teas.

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 7.0 Advertising
Starbucks advertising expenses totaled USD 198.9 million, USD 205.8 million and USD182.4
million in fiscal 2014, 2013, and 2012, respectively.[2] Print and media advertising represents
the core of Starbucks marketing strategy and the advertising attempts to associate Starbucks
brand with the superior quality and pleasing experience. Accordingly, messages communicated
by Starbucks to the target customer segment via print and media advertising include the
following:

Beware of Cheater Coffee. It Comes with a Price

If Your Coffee Isnt Perfect, Well Make It Over. If Its Still Not Perfect Make Sure You Are in
a Starbucks
Starbucks or Nothing. Because Compromise Leaves Really Bad Aftertaste

Starbuck began to use social media and viral marketing much earlier than the majority of its
competitors with the positive implications on the volume of its sales. Starbucks large social
media campaign was launched back in 2009, when US-based customers were offered a free
pastry via social media if they purchased a drink before 10:30 am. The marketing initiative
announced via social media attracted about one million customers.[3] The most recent and
efficient social media marketing campaigns launched by Starbucks include
tweet @tweetacoffee, Blonde Roast, Pumpkin Latte, #TreatReceipt and others. Moreover, social
media is adapted by Starbucks as an effective communication channel with customers to develop
new products taking into account customer preferences and opinions.

8.0 Packaging
Starbucks wants its cups to be 100 percent recyclable by 2012 and is recruiting the packaging
and recycling industries to help it get there.
Only Americans use about 58 billion paper cups each year. But landfills are quickly running out
of space for the 645,000 tons of waste they result in. At the same time, consumers are taking
notice of the foodservice industrys growing inconvenient truth, pushing for more green

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alternatives to traditional packaging. The solution seems easy: Prevent the cups from going into
landfills and cut back green house emissions equivalent to removing about half a million cars
from the road.

But the solution is anything but easy, Starbucks is finding. In an attempt to divert its cups from
landfills and perhaps save the planet along the way, Starbucks, which pumps about three billion
cups into the global consumer stream each year, is recruiting the recycling and packaging
industries to help make 100 percent of its cups recyclable by 2012.

What youve seen in the past is somebody will call a product recyclable based on the
materiality of that product and not necessarily whether or not its actually able to get
recycled, says Jim Hanna, director of environmental impact for Starbucks. So for our cups,
for us to actually call our cups recyclable, they have to be recyclable in the communities where
we operate our stores.
There have been efforts to make cups more recyclable and eco-friendly before within the
company. In 2006, Starbucks introduced a paper cup that contained 10 percent post-consumer
recycled fiber, and last year it switched from the standard PET cold cups to polypropylene cold
cups, which use significantly less plastic and reduce greenhouse gas emissions during
manufacturing by 45 percent. But today Starbucks is thinking even bigger. The new initiative to
make its cups recyclable goes beyond just what the cup is made of, it takes into account the
entire life of the cup.

In May 2012, As part of the effort, the coffee company conducted its first Cup Summit at its
Seattle headquarters, gathering experts from every facet of the cup supply chain, including raw
material providers, cup manufacturers, cup converters, environmental NGOs, waste management
companies, Starbucks peer companies, academics, and municipalities.

According to Hanna, Starbucks had two goals in conducting its Cup Summit. Obviously one of
the goals was to get people understanding that they play a significant role in the process, he
says. And then the other goal was to help us develop some specific work streams about how we
are going to get to this endpoint of 2012 where we can consider our cups recyclable.

The overall aim for Starbucks, Hanna says, is to get all retailers, including Starbucks
competitors, using similarly designed, completely recyclable products. In addition, its looking to
create an infrastructure that can deliver those products successfully to recycling facilities.

From Starbucks :

We are working to shrink our environmental footprint and meet the expectations of our
customers by reducing the waste associated with our business, increasing recycling and
promoting reusable cups.

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Recycling seems like a simple, straightforward initiative but its actually quite challenging. Our
customers ability to recycle our cups, whether at home, at work, in public spaces or in our
stores, is dependent upon multiple factors, including local government policies and access to
recycling markets such as paper mills and plastic processors.

8.1 Promotion
Starbucks is a phenomenal success story. It started life as a Seattle coffee bean roaster and
retailer in 1971, and now has more than 20,000 outlets in 70 countries, according to its
Wikipedia page. On average, Starbucks opens two new stores every day, and you dont build a
business of that size without having a brilliant marketing strategy and structure to support and
sustain growth.
Weve cherry-picked a few of the things that we think Starbucks promotion does very, very
well.
Getting personal with customers
If youve been to a Starbucks recently and ordered a drink, youll know the staff always ask your
name which they write on your cup. A lot of regular customers actually loved the fact that the
staff at their local Starbucks remembered their names. And you only have to do a quick Google
search to see how many customers have shared pictures of their cups on social media.
Adding value
In my role, Im on the road a lot, attending meetings and appointments. If I have time between
them, Ill always make a beeline for a Starbucks because I know I can access the free WiFi. This
allows me to have a coffee, and maybe a cheeky cake, whilst cracking on with work. That little
bit of extra value beyond the fare of coffees and cakes keeps me going back again and again.
Clusters of coffee shops
Starbucks marketing strategy is to hit a new territory hard and open a few coffee shops there
often in very relatively close proximity to one another.

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This is very clever, because it creates the impression in consumers minds that theyre
everywhere, and this omnipresence often both compels consumers to use the stores, and
validates the decision because theyre so accessible.
Great word of mouth
Word-of-mouth recommendations are a cornerstone of Starbucks marketing strategy,
particularly when new stores are launched. WE were amazed to read that the marketing budget
can be as little as 1% of Starbucks spend on advertising.

As a joined-up strategy, clearly points one and two play a key part in this as part of a process of
building up a customer base of loyal fans.
Great offers
The words Starbucks and offers arent words youd typically associate with one another.
However, when the stores do them, they do them very well indeed.

The offers are usually focused around new products and done in a very engaging but understated
way, which often makes a customer feel like theyre in on something that not everyone else
knows about. And, lets face it, all of us consumers feel like were in the know by taking
advantage of promotions.Take a look at these great examples of the way Starbucks runs
promotions.

In this world of IT the company believes on one to one promotion rather than electronic media
advertisement.
On the whole the company spends little budget on its promotion.
Seasonal induction of items are considered main source of customer attraction.
Beside that cards are issued that promotes its popularity.
Certain gift cards are given on beverages that increase sales considerably.
Coffees are transported to offices free of additional cost and irrespective of cup size, making
officials permanent

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 9.0 Marketing Strategy
Howard Schultz prided himself on making sure that Starbucks never grows too fast outside its culture.
The same goes for its marketing strategy. This culture consists of two key points.
The first is our image. When you walk into a Starbucks, a friendly face greets you. The color scheme is
very earthy and warm. The same thing can be said about the smells. We want to make it a comfortable
place for you to relax. It could even be where you and your wife met, or where you heard your favorite
band for the first time.

The second is, well, you.

You are our culture. We want to make sure that you come first. This is why our baristas do their best to
remember your regular drinks. And since our culture is you, we know just how to reach you. Weather this
be via a mobile phone app, our website, or in-store, we are there for you.

The goal over the next 3 years for 2011-2013 is that we stand to make our company more social,
streamline and shape up our image, and get back to our roots.

9.1 MARKET NEEDS

What does the market need? That is the question. The answer lies in the ability for the company to adapt
to changing ways of communicating with customers. Customers easily get tired of the clutter involved in
traditional advertising and promotion techniques, but to keep innovating and thinking of new ways to
reach these customers is what is needed for Starbucks to maintain their dominance. Although it may not
be a real need of customers. The energy drink industry is growing and there is great potential in
expanding and creating a different type of beverage that could help diversify Starbucks. Something
comparable with Monster Energys Java Monster.

9.2 MARKET GROWTH

-College Students are increasing at a rate of 4.6% annually
-9 to 5ers (Business Professionals) are growing in the downtown area at a rate of 3% annually
In Starbucks market, there is significant room for growth in the college student market. They also, have
significant room for growth in the energy drink industry. As the world ages, Starbucks needs to continue

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to establish themselves among younger people, so when they become prime ages to start drinking coffee,
they will choose Starbucks. There isnt much to change

9.3 VALUE PROPOSITION

Starbucks will have a year by year focus when it comes to our marketing goals, focusing on three specific
areas we can improve upon:
- 2011: Build a stronger relationship with customers of Apple products via app that will place orders
-2012: Using an ad campaign strategy of to pull for regular and decaff coffee in-store
-2013: Improve our image in the area of market saturation.

9.4 CUSTOMER EXPERIENCE

Since one of the prime aspects of our culture is our image, we try to make the customer experience a
quality one. The first thing you notice when walking into one of our locations is that it smells amazing. It
makes it an inviting experience and then you notice all the available comfortable seating. You then think
to yourself, Who is that great band that is playing on the P.A.?. Well, thankfully, we are selling that
CD, both in-store and digitally via iTunes and the mobile iPhone/iPod Touch/iPad Music Store. The last
aspect of the experience is the cool earthy green tones of our cafes.
This all leads to the feeling of being at home, in your study. Weve noticed a lot of people will spend
hours working in our cafes. This is why weve made it feel like this is a place to get work done and be
productive. Thats why we have partnered up with AT&T to give you the fastest wireless internet
available.

9.5 MARKETING OBJECTIVES

Starbucks has grown from its original image of the Seattle Grunge rocker to an anyone can drink coffee
regular joe. Having said that, being that we are in 70 countries does make for specific audience that comes
in.
Here are just a few:
Mothers: This one is primarily due to our tasty Frappiccinos. Theyre the kind of demographic that
doesnt necessarily like to drink straight black coffee, but they like the taste. They also have the income to
spend on the large sizes and premium options. Their age ranges from 30-50.
9-to-5ers: These savvy groups of people never have time to brew their own pot, much less have
breakfast, but we are on their walk to the office. They will grab a pastry or bagel along with that classic
black coffee. It really gets their day started. Male or female, from 23-45, the 9-to-5ers are a great demo.
Web 2.0 : This group is the ones that follow us on Twitter, the ones that like every status of ours on
Facebook, the ones that download our app off iTunes. They are young and hungry.

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With the following promotions (see section 3.9.3), we hope to increase foot traffic into our
stores from all of these groups by 20%.

9.6 POSITIONING
At Starbucks, we position ourselves as high value, moderate cost. Reason being is that the cost of a coffee
shop that is high end and family owned will have its products priced higher because they think that people
will pay those high prices because the product is good. Well, we realize that times are tough: Trust us, we
know. That is why our prices are just a bit lower.
Dont worry though, as the product will never change. Regarding the exact positioning of our company
compared to the rest of the market, we feel it is fair. Most customers know that we have quality product,
and they will pay a modest price for it.

9.7 MARKETING MIX

A portion of our marketing will reflect the social aspect of our customers, while the other half will focus
on rebranding many of our locations and strengthen our core product. As we mentioned before, our
culture wouldnt exist without our product that you love so much.
Since the beginning, weve prided ourselves on obtaining the best and fair trade coffee beans possible.
We will never sacrifice taste for cost. Building off this core product will be exciting over the course of the
next three years, but the marketing mix will prove that its still about the coffee.

9.7.1 PRODUCT AND SERVICE STRATEGY

We will continue to serve the mass customization culture; Weve seen a great success with the however-
you-want-it Frappuchino (Chicago Tribune) and will apply the same aspect with our regular coffee. The
however-you-want-it-coffee will allow customers to add anything to their coffee for a fixed price. This
will bring in exsisting customers, knowing that they can get their favorite drink for a flat rate without
worrying about being charged extra for things like sugar, cream, and/or ice.

9.7.2 PRICING
Back in January, we had to raise the price of certain products in several of our larger markets. Many
customers did not like this and complained of defecting to Dunkin Donuts (Daily Finance). These
complaints were found on Twitter. To fix this, we will bring back prices to their pre-January prices.
Regarding the however-you-want-it regular coffee line the price model we will use is 1.50 for small,
2.00 for medium, 3.00 for large.

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9.7.3 PROMOTION
We plan on a strong social media campaign. For starters, our Starbucks iPhone app will post to Twitter
once you place a order. This will make promotion a viral effort, promoting from user to user. This can be
opted out of if a user feels that the feature is too obtrusive. Another feature we plan to implement into our
stores is the use of QR codes. Smartphone devices and point towards a link can scan the QR codes. Links
will be exclusive codes and information on product. Regarding the partnership we established with Apple
back in 2007, new customers of Apple computers, iPhones, and iPods will get a $25 dollar gift card to
start a relationship with these customers. This is one of our strongest demographics (see section 3.4) and
will further strengthen it

9.7.4 PLACE
Over the years, we have gained considerable flack for market over-saturation. To combat this, we will go
and re-brand over 500 of our locations in markets that have considerable less demand for the product or
the competition is too strong in markets where regional coffee chains and shops. We have had much
success with our Seattles Best Coffee brand and placing it within many different retail locations (i.e.
Subway, Burger King, grocery stores) (Reuters). Rebranding certain locations will help improve our
image of over saturation in the market where consumers are not familiar with the Seattles Best. If there
are locations of Seattles Best or placement of the brand within 30 miles, we will rebrand some Starbucks
locations as a local shop. We have had success with this in the past and will continue the procedure
further.

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 10.0 Success Factors
Starbucks main advantage is the diverse clientele they have fostered. The ideal Starbucks
customer has a great appreciation for quality-roasted coffee beans along with a powerful taste
palate. Although there is a misconception that most Starbucks customers are affluent, middle-
class customers have tried the coffeehouse brand, as the quality of every drip is quality tested.
Co-branding with bookstores such as Chapters in Canada has increased exposure and awareness
for their brand. 4 Their first mover advantage (first coffeehouse to align themselves with a
recognize store in Canada) in frozen coffee flavored drinks was the Frappuccino, which has
gained Starbucks an aggressive edge on their competitors. Starbucks leading and innovative
appreciation for philanthropy established them as a front-runner in the market. 5 By consistently
promoting causes such as AIDS in Africa, pure water with the sale of ETHOS water bottles, and
smaller community organizations, Starbucks is confident that they have developed a helping
hand to the greater community. The success of Starbucks would be non-existent without their
appreciation for the art of coffee and expressing their love one person, one cup and one
neighbourhood at a time.

The keys to the success for Starbucks are:

The unique, innovative, upscale atmosphere that will differentiate Starbucks.
The establishment of as a community hub for socialization and entertainment.
The best coffee and bakery items.
Keeping their products as a status symbol
The huge online presence through social networking and other mediums

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 11.0 DownFall
Falling down is a very big subject, and so is the concept of downfall. None of us escapes,
and I have had my share of both. BY Michael Leunig

Changes in Starbucks began after 2005, when problems to challenge Starbucks' success. These
problems continued to affect the performance of the company until December 2010. The
objective of this research is to analyze Starbucks' response to the effects of the 2007 financial
crisis when its shares were devalued by more than 80%, dropping from US$39.63 in May 2006
to US$7.17 in November 2008, at the peak of the global crisis.
-2007 global crisis affects Starbucks as well
-660 stores closed in 2008 due to lack of profit ability
-300 more in 2009
This was one of the reasons why the company took a hit during the economic slowdown of 2008
as customers opted for cheaper options for their everyday coffee. Starbucks was forced to shut
600 shops that were not making profits. By March 30, 2008, its profit had fallen 28 per cent
compared to the same period in 2007. In 2009, it closed another 300 stores and laid off 6,700
employees.
On January 8, 2008, Howard D. Schultz returned as CEO of Starbucks after a gap of eight
years, replacing Jim Donald. Schultz had nurtured the company since 1982 when it had only four
outlets. He had served as CEO from 1987 to 2000 and had presided over the companys public
offering in 1992.He takes revolutionary steps to get back Starbucks image.
In March 2008, "My Starbucks Idea" was rolled out for customers to exchange ideas with each
other and directly with the company. As part of this, customers were able to give opinions on
everything such as products, services, layout, advertising, corporate social responsibility, in-store
music and so on. More than 93,000 ideas were shared by about 1.3 million users on social media,
and page views per month rose to 5.5 million.
After the 2007/08 crisis, Starbucks had to rebuild its customer relationships and show the world
that it cared for quality and consistency. It also had to give a leg up to the altruistic component of
the brand such as community building and care for the environment. Through the "My Starbucks

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Idea" customers had a direct link with the headquarters and of course Starbucks was listening.
Soon Starbucks's ubiquity became an asset as customers from around the world had an
opportunity to connect with each other, spawning like-minded communities like the 'free Wi-Fi
group', 'soy group', 'comfy chair group' or 'frappuccino lovers'.
Starbucks implemented over 100 ideas. Through this initiative, the coffee retailer built a robust
fan base. By giving customers a platform to voice their ideas and views on the brand and by
responding to it, it was able to reignite the brand trust.

12.0 Scope for next 5 Years

Starbucks is performance driven organization through the lens of humanity. Thats what Ive
imprinted on the entire organization over the last two years. Performance is the price of
admission (Starbucks stock price in November 2008 was $7.17/share, compared with $80/share
in December 2014. Company market cap is $60 Billion) and Starbucks have proven we are best
in class, but it is about more than numbers. Its about the body of work.
The rules of engagement for a public company have changed. Companies now must do more for
their people and the communities they serve.
Starbucks Reserve Roastery and Tasting Room (opening 12/5 at 8:00AM) is a metaphor for the
entire company. The Roastery represents over 2 years of thoughtful, disciplined work about
creating a retail experience that does not exist, not only in the world of coffee, but in the world of
retail.

"We are building a new brand within Starbucks." The new brand is Starbucks Reserve an
opportunity to get access to rare micro-lot coffee that were going to roast to perfection in this
new facility. In addition that were going to open Starbucks Reserve stores, about the same size
as an existing Starbucks store. The reserve stores will bring to life a super-premium experience
for our customers.

We have an opportunity to make history. Ive never been more optimistic, more enthused about
the things that we are going to do. Howard Schultz,CEO

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Over the next 5 years, Starbucks will grow to nearly $30 billion in annual revenue with more
than 30,000 stores globally.

Starbucks partners (employees), coffee and corporate reputation (trust in the company) drive
long-term brand loyalty.

Starbucks seven strategies for growth:

1. Be the Employer of Choice Invest in partners capable of delivering a superior customer

experience.

2. Lead in Coffee Continue to build our leadership position around coffee agronomy, sourcing,
roasting, brewing and serving handcrafted beverages.

3. Grow the Store Portfolio Increase the scale of the Starbucks store footprint with disciplined
expansion. (Different formats, licensing opportunities and international expansion)

4. Create New Occasions to Visit Stores Grow store usage across day parts with new product
offers. In addition to breakfast, create new food offerings for lunch, afternoon refreshment and
snacks, and evenings.

5. CPG Brand Growth Focus on the Starbucks brand to unlock profitable growth rarely seen in
consumer packaged goods internationally.

6. Build Teavana Create a second major business in tea. The global tea market is about a $109
billion dollar industry. (Emphasis on Tea Bars, relevant tea products and formats, Teavana in
Starbucks, and Teavana in the grocery aisle)

7. Extend Digital Engagement Drive convenience and brand engagement through mobile
commerce platforms. This includes expanding the number of customers participating in My
Starbucks Rewards, and launching Mobile Order & Pay and Delivery. (1 in 8 Americans
received a Starbucks gift card for Christmas)

"These strategies will deliver growth and the enduring company Howard spoke about."

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 13.0 Suggestions
-Starbucks biggest growth is in its International segment. The emerging markets of Brazil, India,
China, South Africa and Pakistan with a growing middle-class population continue to offer
significant opportunities to add new stores and serve more customers. Starbucks has already
made significant inroads into the Chinese market but there still is a lot of untapped potential
growth in these markets. Starbucks should grow in these emerging markets by winning locally
Starbucks must remain relevant to the customer in order to grow in these markets, and its
management teams should have the freedom to operate within their overall framework to tailor
store format, introduce local product mix and price points to the needs, lifestyles and tastes of
each individual market/community.

- Under Starbucks international strategy, it should transfer its core competencies and capabilities
country to country and then gradually build profit drivers in several countries as it continues its
global expansion in an organic way.
- Starbucks has great growth opportunities in Tea and Fresh Juice products mix. They should
build up these products along the same line of their core coffee products.
- Also as consumer tastes and lifestyle shift towards more snacks and beverages options,
Starbucks should tailor its menus and expand to give more healthy product offerings in its mix.
- Coffee beans are a significant input into Starbucks value chain and there have been wide
fluctuations in the market prices of high quality coffee beans. Starbucks could mitigate this price
volatility risky by implementing an effective hedging strategy like future contracts to lock in
their estimated quantity inputs at a low swing price so that the future costs can be managed to a
greater extent.
- Starbucks growth strategy in the saturated U.S. market should focus on getting additional
penetration into untapped rural markets.

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- Another growth sector is its packaged coffee packets and iced beverage products. Starbucks
should build better relationships with big box retailers to get premium shelf space and increase
the efficiency of this distribution channel.
- we see that Starbucks invest very little in advertising and marketing initiatives. It would be
recommended that Starbucks make significant investments in advertising and marketing
initiatives in the face of increased competition in the market.
- Further build and retain customer loyalty, by building on beta concept of on-the-go home
delivery.
- Their mobile apps business drove 10% of the sales in the US, so it would be recommended for
further building to stream lining ease of use and payment process which would help drive more
customers, decrease wait time in stores and increase efficiency. Integrating Starbucks loyalty
program with the mobile application would also be recommended.

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