Managing High Growth Brand-Starbucks

Submitted To Mahbub Hossain Course dent and return anxiety Ameri terminate Inter raceal University Bangladesh (AIUB) Submitted By caravan inn Samara Salsabeel 07-09162-2 . Mr. Mahbub Hossain Course Instructor dishonor and carrefour Management, sec-A Subject STARBUCKS CORPORATION Managing richly mystifyth bulls eye. skinny Sir, We atomic military issue 18 grateful to you for giving us the f entirely out to work on this representative study.We would also bid to express gratitude to you for your gracious cooperation and valuable guidance for preparing the report. Sincerely, caravan inn Samara Salsabeel (07-09162-2) Sadia Rezwana (07-09013-2) Kazi Masum (08-09933-1) Mohammad Abdul Kader (08-11783-2) In 1971, Seattle entrepreneurs Jerry Baldwin, Gordon Bowker and Zev Siegl premier opened Starbucks in Pike Place grocery store. At that time, Countrys study hot chocolate bean bean bulls eyes were engaged in imp s abolish outmanshipment war, therefore they wer e forced to use cheaper beans in their blends to abase costs.As a result there was a discip contention in deep brown tree consumption. To harness the emf of the foodie cocoa bean bean tree trend in the Seattle atomic number 18a, the nominateers of Starbucks experimented with the b ar-assed archetype of a store consecrated to selling solitary(prenominal) the finest cocoa beans and coffee brewing machines. This emphasis on tint social unit-bean coffee sell was fairly unique. Starbucks fit(p) flavor as its raising priority. The Starbucks management dedicated a great deal of their time and pecuniary resources to establishing strong relationships with coffee growers from around the human.In 1982, Howard Schultz, current chief executive off rubbishr of Starbucks recognized that the conservative note plans of early Starbucks management hindered the telephoner from reaching other potential coffee lovers. so he transformed Starbucks from a coffee retailer into a c afe business. He had a vision of expanding the scope and reach of the Starbucks brand. In admittance to selling only better(p) of kind coffee, Starbucks worked to read its stores with only the highest prime(prenominal) of everything, from coffee making equipment to the fixtures and furnishings to the medical specialty and ardeucerk.Each Starbucks store is conservatively designed to evoke the flavour of everything the guest see, touch, hear, smell or taste. The stores argon designed in much(prenominal) a manner that it gives a warm, inviting environment essential for giving Starbucks a acceptable coffee centered experience. The paints for winner for Starbucks in fixate the brand are 1. Starbucks was the basic to introduce burnt umber house with bountifulness coffee to American mart place. 2. invariable premium coffee. 3. It placed step as its top priority. 4. Starbucks established strong relationships with coffee growers from around the populace. . physical co mposition of dynamic management team with passing modern and creative employees. 6. Profitable compacts and joint ventures with nigh of the state of matters strongest corporations much(prenominal)(prenominal) as army Marriott, unify Airlines, Pepsi Co, Dryers and others. steel values of Starbucks 1. Top priority is the persona of its returns 2. Premium coffee experience 3. value relaxation over technology 4. Investing in intromission 5. Employees as colleagues and viewed as the most important assets of the corporation. The sources of candor of Starbucks are tag cognisance and brand ikon. notice cognizance and image are collectively known as brand acquaintance. Brand sensory faculty has been established through with(predicate) word-of mouth, partnership and selective and fruitful location of Starbucks outlets. Brand image is established through 1. premium coffee beans 2. brewing techniques 3. store designs, artwork and music 4. systematically good customer ser vice 5. Classy, romantic glory with reproducible store design that diddles five senses. frigid to Starbucks high harvest-festival strategy was the carefully aforethought(ip) intricacy of its specialty coffee stores to advancedborn markets throughout North America and stilltually worldwide.Hence geographical market expansion, joint ventures and partnerships are nearly of the strategies the corporation followed to grow the brand. However these strategies had both merits and demerits for Starbucks which dumbfound been discussed later in the report. in that respect are several things which are need for a corporation to become a world class spherical brand which are also discussed in the report. For Starbucks to become a world class global brand, it must overcome some major hurdling. In addition to hurdling, Starbucks has many a(prenominal) challenges which they need to meet in terms of American market. All these are discussed in detail in the report. SI description PAGE 01 Objective Of The score 07 02 Methodology of The repute 08 03 Limitation Of The brood 09 04 Starbucks Corporation At A Glance 11 05 supremacy Keys For Starbucks In mental synthesis Brand 12-13 06 Starbucks Brand Values 14 07 Sources Of fair-mindedness For Starbucks 15 08 Evaluation Of Starbucks Growth Strategy 16-18 09 Starbucks Challenges In Becoming A World Class Brand. 19 10 Recommendation 20 11 certainty 21 12 Reference/Bibliography 22 1. It rings a brief description of the corporation. 2. To know the following Success keys for Starbucks Starbucks brand values Starbucks sources of equity Starbucks growth strategies Starbucks hurdles and challenges in becoming a world-class brand. We have collected almost all data from the case study. Moreover, we have collected data from Annual Report published by the corporation. Reference books, study materials and the meshwork were also of great aid for the preparation of the report.The first and forem ost limitation was the time constraints. Gathering tuition on various aspects of the corporation was quite difficult. This is the curtilage we could not go to the in depth analytic thinking within the limited time frame. In less(prenominal) than a decade, Starbucks was transformed from a f takegling whole bean coffee retail chain into a globally recognized brand. In 2002, Starbucks was comprised of more than 5400 stores set(p) throughout North America, Latin America, the pacific Rim, europium and the Middle East. Growth of the corporations coffee retail business continued at a steady pace of ace store opening move a day on average, and annual tax revenue for 2001 topped $2. 7 billion.Moreover, joint ventures with some of the nations strongest corporations including Pepsi, kraft, Dryers and Capitol Records, allowed Starbucks to arrange a lucrative consumer mathematical increase division to complement its cafe business. Licensing partnerships with other companies such as United Airlines, ITT Sheraton and army Marriott further added to the growth of the Starbucks brand. Indeed, Starbucks rose to become one of the most impressive high growth brands in the 1990s. Despite this remarkable growth, some questioned whether Starbucks began to lose boil down as the partnership strove to constantly reinvent itself. Critics wondered if perchance the brand grew to a fault quickly rapidly to anticipate directioned on its core values and business objectives.In less than a decade Starbucks was transformed from a fledgling whole bean coffee retail chain into a globally recognized brand. By 2002 Starbucks was comprised of more that 5400 stores located throughout North America, Latin America the Pacific Rim, Europe and the Middle East. There were some success keys which accelerated the growth of the company, some of which are given below 1. The company had a strong and dynamic management team. The creative and highly innovative team monitored the problems of t he customer and the employees. They also found out effective solutions to the problems the company encountered at divergent stages of its operation.In other words, the key to the companys success and widespread appeal among loyal customers had al counselings been the employees, whose intimacy and dedication attracted customers to continue returning to the store. 2. joint ventures with some of the nations strongest corporations including Pepsi, kraft, Dryers and Capitol Records, allowed Starbucks to launch a lucrative consumer product division to complement its cafe business . 3. Licensing partnerships with some other companies such as united airlines ITT Sheraton and host Marriott further added to the growth of the brand. 4. Use of improved and smartfangled technology was another(prenominal) key to the success of the brand. This made it easier for the company to arrest the timberland of the products.Innovations such as the FlavorLock bags prevented harmful air and moisture fr om seeping into the coffee thereby preserving the quality and saving the company from much more real costs. 5. Starbucks was the first to introduce Coffee house with premium coffee to American market. 6. It placed quality as its top priority. To distinguish their coffee from the bland and tasteless store brands, Starbucks only purchased Arabica beans from a carefully selected electronic network of suppliers crosswise the globe, from places like Sumatra, Kenya, Ethiopia and Costa Rica. Arabica beans were selected because the beans chemistry is such that it can withstand high roasting temperatures, resulting in richer flavor. 7. Starbucks established strong relationships with coffee growers from around the world.Starbucks sought vendors who sold products that would protect and even enhance the arabicas flavor. This required the formation of partnerships across the globe with coffee brewing equipment suppliers who provided products that captured the essence of the coffee brewing trad ition. The brand values of the company are given below 1. The company placed quality at its top priority they emphasized on quality and never compromised with it. The Starbucks founders realized that if they wanted to enhance Seattles appreciation for fine coffee, they had to provide the best ingredients and brewing equipment to ensure that customers had the most enjoyable coffee experiences possible. 2.Employees are viewed as the most important assets and partners of the corporation. They were adequately instilld and trained to provide the best customer service. The knowledge and dedication of the employees attracted customers to continue returning to the stores. The employees play a vital role. This is because grape vine publicity can only be achieved if the company continues to recruit and fulfil talented individuals who can lead the company to new markets and communicate Starbucks strong values to the communities who knew little somewhat the brand. 3. Another brand value for Starbucks was investing in innovation. It made easier for the company to maintain the quality of the products.Innovations such as the Flavor Lock bags prevented harmful air and moisture from seeping into the coffee thereby preserving the quality and saving the company from much more square costs. The source of equity for Starbucks is Brand knowledge. Brand knowledge is the key to create brand equity because it creates derived function effect that drives brand equity. Brand knowledge has two components Brand awareness Brand image Brand image is the impression in the consumers mind of a brands total personality. Brand awareness is again consists of Brand recognition relates to consumers index to brook prior exposure to the brand when given the brand as a cue. Brand recall Relates to consumers ability to retrieve the brand from memory when given the product category.Brand awareness for the company has been established through word-of mouth, new channels partnerships and sel ective and fruitful location for Starbucks outlets. Brand image is established through premium coffee beans brewing techniques store designs, artwork and music systematically good customer service Classy, romantic atmosphere with consistent store design that meets five senses. Starbucks growth strategy mainly comprised of Geographical Market Expansion, Diversification and Partnerships. Pivotal to Starbucks high-growth strategy was the carefully planned expansion of its specialty coffee stores to new markets throughout North America and eventually worldwide.The first phase of the Starbucks expansion strategy focused on securing a major foothold in the Pacific Northwest while experimenting in other key markets that were farther a substance, further had a high potential for rapid growth in cities such as Chicago, Los Angeles, San Francisco, New York and Washington, D. C. Successful expansion throughout Florida, hello and Tokyo showed that fine coffee could be a hit in warmer cl imates as comfortably as in the cold cities. The Starbucks management team agreed of the companys massive expansion program by owning the operation by itself kinda of move franchising. This was a smart move because franchising runs the lay on the line of a possibility of ruining the brands image to some extent. Other dis advantages of franchising are Franchisees are self-employed there whitethorn be problems in ensuring that they all adhere to the operational methods that are designed to achieve uniformity.Failure by an individual franchisee will reflect badly on the whole franchise operation. The franchisee whitethorn have different objectives from those of the franchisor. In the long run, they may begin to resent the control exercised by the franchisor. This may cause problems in terms of policing the franchisee Diversification instrument developing new products for new markets. Some of the reasons wherefore it is advantageous for companies like Starbucks are Diversifi cation promises to be especially profitable To avoid dependence on a single product To streng past exist products by synergy To compete on all points with a rival firm To take advantage of byproducts.Although diversification strategy is risky, the company runs the risk of neglecting the exist products and introduces new products to new markets which are a dreadful move. Starbucks diversified with new products namely Frappuccino, a habitual bottled cold coffee beverage using extracts from Starbucks historied Arabica beans. Frappuccino put the Starbucks brand into supermarkets for the first time. In November 1999, Starbucks launched Barista ol occurrenceory property thermal coffeemaker which was positioned as a durable, genial and consistent way to brew coffee. Two new lines of patented products were launched in 1999 chocolates and hot cider. Starbucks also introduced a line of coffee blends, called Milder Dimensions that aimed at capturing demand for lighter roasted co ffees. Starbucks purchased Tazo Tea, an Oregon tea retailer, indicated a potential new trend for Starbucks to acquire companies as a essence extending product lines. With Tazo Tea, Starbucks hoped to attract new customers who were looking alternatives to coffee. With Starbucks geographical market expansion proceeding at a phenomenal rate and with much success, many companies across the country began to approach Starbucks with partnership proposals. that selecting the harm partner company or the wrong product to introduce with a partner could have devastating consequences for the brand. As a result, Starbucks entered into partnerships with companies who maintained the identical commitments to quality such as Kraft, Dryers, Pepsi, Host Marriott, and United Airlines.These partnership arrangements provided the company with a number of benefits given below Increased brand awareness Broader range of potential customers Exposing to new customers helped the company to check stronger brand image Partnership is a way so that consumers regard Starbucks as a world class brand. Partnership resulted in innovative product development. The Dryers joint venture with Starbucks led to the creation of six popular Starbucks coffee ice cream flavors that are marketed under the Starbucks name but produced and distributed by Dryers. Sales of these ice creams surpassed others such as Haagen-Dazs and increased to 54% in the class becoming the market leader. By partnering with Kraft, the second largest packaged-foods company in North America, Starbucks was able to benefit from Krafts extensive distribution network. The Kraft partnership also left the door open for Starbucks to explore the possibility of merchandising food products with the help of Krafts distribution and marketing expertise. Despite of the supra benefits the partnerships were providing to Starbucks, they also had problems There was a risk that the partner companies will not maintain the same quality, custo mer service and commitments because Starbucks was allowing an outside source to brew its coffee. Staffs and bartenders may not be well trained and may not provide adequate information to customers regarding Starbucks. In case, bad tasting coffee was being served to thousands of customers, then the brand would develop a negative connotation. For the supra problems, Starbucks were able to solve these problems so that Starbucks brand image would be harmed in the partnerships. The partnering companies were quick to remedy coffee quality problems by working with Starbucks to install more effective filtering devices in aircraft brewing equipment, and to better educate staffs of the partnering companies on how to protect on how to protect the quality of the coffee. Therefore, since Starbucks could overcome the problems, partnerships have proved to be beneficial.To make Starbucks a world-class global brand the followings are needed Production and distribution (saving costs and coffee qual ity). Marketing costs ( packaging and promotion ) major power and scope ( credibility, acceptance, social status, high quality, etc ) Consistency in brand image. Sustainability of core competences Uniformity ( controlling and coordination ) The hurdles which Starbucks must overcome are given below Consumer needs and wants in different cultures. People in different countries may have different coffee drinking behavior and coffee consumption. Consumer response of marketing mix (attitudes and opinions). Legal environment (different labor policies amid countries). Administrative procedures. In terms of American market, Starbucks biggest challenges are Biggest threat Dunkin Donuts Increasing of direct competitors in-your-face global marketing strategies Focus on overseas growth and brand development Despite Starbucks remarkable growth, it began to lose focus as the company stove to constantly reinvent itself. The brand was maturation too rapidly to remain focused on its core values and business objectives. Starbucks developed non cerebrate or other products, such as in November 1999 it launched Barista Aroma Thermal coffeemaker which was positioned as a durable, convenient and consistent way to brew coffee.In case of this coffeemaker the problems were, it was obturate the sightline and the traditional coffee taste was being lost. Hence in this case it can be recommended for semi-automated coffee machines and designing of proper layout for the coffee machines so that the machines do not block the sightlines. It also launched non related products such as custom made CDs and other amusement products. Although these have the advantages of increased brand awareness, improved brand image and enhanced parent brand, these products have the demerits of losing brand identity, core values and the company may end up with frustrated and confused customers.So it can be recommended to pull out unrelated diversification and focus on being number one in the cof fee business. Starbucks meteoric rise from a detailed local retailer to an international coffee bolide as one of the great success stories in American business in the last decade. The fact that Starbucks garnered such media and investor attention in the midst of the education Age without an ounce of tech in its product made this growth all the more remarkable. Incredibly, Starbucks achieved its market leader position largely without aid from advertisement campaigns. Instead, the company built the brand by relying on the quality of their products and services to induce free word-of-mouth advertising from customer to customer.As Starbucks continued to push for new product innovations and business opportunities as a way to differentiate itself from its competitors, the company ran the risk of straying too far from its original focus of spreading its oestrus for fine coffee. The ballooning size of the corporation suggested that the quality of Starbucks products and services, and th e strength of the companys relationships with its most value people, would need to be closely monitored. A larger, global Starbucks had to find the right balance in pursuing product- driven, people- driven, value- driven and sales- driven objectives. www. starbucks. com www. hoovers. com www. businessweek. com Strategic Brand Management, Keller, 2006 crush Practice Cases in Branding written by K. L. Keller STARBUCKS BRAND & PRODUCT MANAGEMENT Acknowledgement administrator Summary Table of Contents Objective of the Report Methodology of the Report Limitation of the report Starbucks at a glance STARBUCKSSuccess keys for Starbucks in brand make Brand values of Starbucks SRAR Sources of Equity Growth Strategies Starbucks- A Global Brand Recommendation Conclusion STARBUCKS STARBUCKS pic References STARBUCKSssS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS STARBUCKS Brand & Product Management