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Untitled TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION MAJOR INTERNATIONAL BUSINESS Final Marketing Project Instruction Marketing Principles ANALYZING A MARKETING STRAGETY FOR STARBUCKS[.]
TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION MAJOR: INTERNATIONAL BUSINESS Final Marketing Marketing Principles Project Instruction ANALYZING A MARKETING STRAGETY FOR STARBUCKS Lecturer: Thai Dam Huy Trung Team 05 – Shift 01: Ho Chi Minh City, May 16th 2022 PREFACE In the first place, in order to carry out and successfully complete the subject of Marketing Principles and the final report "Analyzing a Marketing strategy for Starbucks", our team has received a lot of help and facilitated advantage from Ton Duc Thang University In particular, we would like to express our sincere thanks to Mr Thai Dam Huy Trung – our lecturer, who directly guided and accompanied our team throughout the process of completing this course and this final report Our report is made based on the efforts of the team members (team 5) as well as the references, lessons learned from books, research works, information from news sites In the process of implementation, although we have tried our best, but because of limited knowledge and lack of practical experience, it is difficult to avoid shortcomings Therefore, we are looking forward to receiving your attention and comments to improve this report Finally, we wish you all good health and good work We sincerely thank you! Sign Team 0 Tieu luan 0 Tieu luan THE LIST OF GROUP MEMBERS No Full name Student ID Task allocation Evaluation ● Chapter (5.1, 5.2) Nguyen Thuc Khanh 720I0517 ● Chapter (7.1, 7.2) 100% ● Synthesis the report ● Cover page Do Ngoc Anh 720I0434 ● Chapter (7.3, 7.4) 100% ● Presenter ● Chapter Tran Mai Han 720D0022 ● Chapter (5.3) 100% ● PowerPoint ● Chapter Dinh Nguyen Gia Dinh 720I0490 100% ● Chapter (6.1, 6.2) ● Chapter Tran Tien Minh 720D0002 ● Chapter (8.1) 95% ● PowerPoint ● Chapter (5.4) Tran Thi Minh Tam 720K0592 ● Chapter (8.2) 95% ● Presenters ● Chapter Le Hoang Minh Chau 720I0135 ● Chapter (6.3, 6.4) ● Presenters 0 Tieu luan 100% TABLES OF CONTENTS PREFACE THE LIST OF GROUP MEMBERS CHAPTER 1: EXECUTIVE SUMMARY 1.1 Main goals: 1.2 Recommendations: CHAPTER 2: COMPANY DESCRIPTION 2.1 Brief description of the company’s background and industry 2.2 Brief description of your focal Product(s)/Service(s) CHAPTER 3: BUSINESS MISSION CHAPTER 4: MARKETING OBJECTIVE CHAPTER 5: SITUATION ANALYSIS 5.1 Market analysis 5.2 Industry analysis 5.3 SWOT analysis 10 5.3.1 Advantages analysis 10 5.3.2 Disadvantage analysis 10 5.3.3 Opportunity analysis 11 5.3.4 Threat analysis 11 5.4 Competition analysis 11 CHAPTER 6: BUSINESS PROPOSITION 12 6.1 Mission Statement 12 6.2 Segmentation 12 6.3 Target market 12 0 Tieu luan 6.3.1 Senior citizens 13 6.3.2 Millennials 13 6.3.3 Adolescents and children 13 6.4 Positioning 13 CHAPTER 7: MARKETING MIX 13 7.1 Product 13 7.2 Price 14 7.3 Place 14 7.4 Promotion 15 7.4.1 The types of Starbucks sales promotion 15 7.4.2 How has Starbucks implemented promotional mixes? 15 CHAPTER 8: EVALUATION 16 8.1 The forecasted results (e.g., sales volume, market share, revenues over the years ) of the marketing plan 16 8.2 The measurement to evaluate the achievement of goal 16 REFERENCES 17 0 Tieu luan CHAPTER 1: EXECUTIVE SUMMARY The complicated issue of the COVID-19 pandemic in Vietnam, as well as the enforcement of anti-epidemic measures, has had a significant impact on Starbucks' business operations However, Starbucks is still able to keep its workforce, expand the area of sales, and recover from the epidemic thanks to rapid adaptation and strategic modifications by the combination of selling offline and online From the information that we collected about Starbucks, our group decided to research and analyze a marketing plan to set goals and suggestions to help Starbucks improve the quality of customer service in the best way 1.1 Main goals: - Giving suggestions and recommendations to help Starbucks improve the quality and attract more customers - Analyzing the 4P strategy and SWOT model to support Starbucks in determining pricing, product, promotional, and placement marketing choices for Starbucks goods to satisfy particular customer needs From the goals we aim to achieve, we realize that Starbucks needs a strong innovation attitude and aptitude to supply the proper items and align its brand in order to thrive in its international development and growth strategy Starbucks must maintain consistent service and product quality, satisfy customers with flavors, and diversify types and products to serve customers Customers will remember and want to come back to enjoy the atmosphere, the taste of coffee and connect with people 1.2 Recommendations: - Send a letter to the owner requesting that the rent of the premises be reduced - Increasing the number of branches in other provinces - Create some promotions to attract more customers CHAPTER 2: COMPANY DESCRIPTION 2.1 Brief description of the company’s background and industry Starbucks is a globally recognized coffee company This company was founded on March 30, 1971, at 2000 Western Avenue in Seattle (Washington) Jerry Baldwin, an English teacher, Zev Siegl, a history teacher, and Gordon Bowker, a writer, were the initial three creators of Starbucks coffee When the firm first entered the Vietnamese market, it created a frenzy by introducing a new and American-style coffee flavor 0 Tieu luan Initially, the brand was intended to be called "Cargo House," according to cofounder Gordon Bowker Then it was suggested by a partner named Terry Heckler, that a name starting with "St" would help make the agency more impressive After discussing, they built a brand with the name Starbucks from the novel Moby-Dick The name symbolizes the romance of the waves and the seafaring tradition of the world's first coffee merchants After nearly 50 years of establishment and branding, Starbucks has changed the logo image many times; each time the Starbucks logo changes, it has different message meanings However, it was until 2011 that the Starbucks logo was changed to fit that period and is still in use today This Starbucks logo no longer has details such as the circle and the Starbucks Coffee brand name But the core, basic image of the Starbucks logo is still kept, so this logo still creates a familiar identity of the company The color of the Starbucks logo is more minimalistic when only keeping the primary blue and white tones The two-color techniques combined in the Starbucks logo carry the message of cleanliness and deliciousness and attract customers It can be said that the overall Starbucks logo is minimalistic, neater, and more attractive If anyone has never known the old Starbucks logos, they cannot recognize this new change 2.2 Brief description of your focal Product(s)/Service(s) Some of Starbucks' main products can be mentioned as: The coffee, Tea, Frappuccino, Smoothie, Other food and drink, Commodities (cups, instant coffee, etc.) In addition to products sold year-round, Starbucks constantly refreshes its products and product lines with seasonal products, limited edition products and products for the holiday season, Besides diversified products, Starbucks also always focuses on improving the quality of its products and services Starbucks always wants to bring aromatic coffee cups, cakes, and teas with unique flavors and the professional service style of the staff Starbucks has always created new products to meet client demands In addition to coffee with a strong flavor, other products such as fruit tea, seasonal products, and limited products are constantly changing to suit the taste of each season CHAPTER 3: BUSINESS MISSION When building its brand, Starbucks made clear its mission to initiate and stay true to its core values and those core values that arise from relationships with people That means Starbucks not only has a variety of coffee with reasonable prices but also has a cultural space To gain this mission, Starbucks creates its own style with a professional service team, providing the best service to customers Today, when going to any Starbucks coffee shop, customers can not only drink coffee but also read newspapers and work All of those things of Starbucks are developed and follow the set mission That was also the vision of Starbucks when it was founded Starbucks makes environmental mission statements For example, developing innovative and flexible solutions for change, striving to buy, sell and use environmentally friendly products, and making environmental responsibility a company value Starbucks made a commitment to a resource-positive future in 2020, committing to halving its carbon, water, and waste footprints As a step toward those objectives, the company pledges to produce Carbon Neutral Green Coffee by 2030 and 0 Tieu luan to reduce water usage in green coffee manufacturing by 50% (stories.starbucks.com, 2022) CHAPTER 4: MARKETING OBJECTIVE Starbucks Coffee, a well-known and expected top brand worldwide, is brought into the Vietnamese market and established as a profitable brand Starbucks Coffee attempts to respond and adapt to changes in consumption and demand in diverse markets in general, and Vietnam in particular, by maintaining brand identity through traditional products To adjust to the too busy life to enjoy traditional coffee cups, Starbucks' marketing objective is to add a new style of Vietnamese coffee drinking culture, through which they can enjoy coffee cups conveniently brewed in paper cups with a wide variety of flavor options To achieve the above marketing objectives, Starbucks has set some short-term goals: ● Sales goal: In 2022, Starbucks attempt to make up for the loss caused by the Covid-19 pandemic through their sales revenue ● Marketing goal: Starbucks' marketing goal in 2022 is to create information flows throughout social networks to attract customers Through a marketing plan, they want to win market share from competitors such as Highlands, Trung Nguyen, etc ● Branch development goal: In 2022, Starbucks wants to open more branches and stores in cities such as Nha Trang, Ha Noi, Da Nang, or Ho Chi Minh city ● Product goal: Starbucks continues to improve product quality and develop more drinks and confectionery products suitable for the Vietnam market this year They also want to change the products such as straws, spoons, and forks into recycled materials ● Service goal: Starbucks wants to enhance its service in 2022 by improving its apps along with developing its delivery service due to the increased amount of online orders since the Covid-19 pandemic CHAPTER 5: SITUATION ANALYSIS 5.1 Market analysis Vietnam was attacked by a fourth wave of COVID-19 in the summer of 2021, which has added to the pressures facing the coffee industry As a result, Starbucks recognizes the potential of online sales, so they are working to improve the online sales channel to attract more customers 5.2 Industry analysis Coffee is the second most valuable traded commodity on the planet, making it become an essential part of our global economy As worldwide consumption climbs, there is a growing need for coffee, however, global supply falls short of expected demand Therefore, the coffee industry will 0 Tieu luan confront difficulty in the future as worldwide supply fails to satisfy the rising global demand for coffee 5.3 SWOT analysis 5.3.1 Strength analysis - Brand popularity ● For many years, the company has successfully built a brand image as a luxury beverage company ● Starbucks appears in more than 65 countries with more than 40,000 stores in the world Starbucks has 77 stores in Vietnam - Solid financial performance over time ● Thanks to the success of branding, the interest of consumers helps Starbucks' revenue has continuously increased Even during the pandemic, Starbucks still reached positive profit, although not as much as in 2020 (Patricia Marques, 2022) - Quality and diversification of products ● The variety of products, the quality, and the flavors they offer are what make Starbucks famous - Experienced high-quality leadership and management 5.3.2 Weakness analysis - The price is high ● In comparison, Starbucks has the highest prices compared to other coffee shops in Viet Nam Starbucks products cost 38% more than products sold by competitors (chiasenow vn) - Products can be easily imitated ● Products can be easily imitated because Starbucks doesn't have the most unique or distinctive product A large number of coffee chains offer similar types of products For example, Coffee Latte, Capuchino, - Unhealthy products ● Many Starbucks drinks are high in calories and sugar, causing a risk of harm if consumed regularly For example, a Starbucks cinnamon roll Frappuccino contains 510 calories and 85 grams of sugar, 5.3.3 Opportunity analysis: environment, cultural, price, - Natural resources ● Vietnam is one of the most favorable coffee-growing lands The cold, rainy climate in some northern provinces is very suitable for growing Starbucks' main coffee - Arabica coffee - Place of attraction ● With the development of large commercial centers in Vietnam, it is not difficult for Starbucks to find a location that attracts customers with a decent average income With the development of large commercial 0 Tieu luan centers in Vietnam, it is not difficult for Starbucks to find a location that attracts customers with a decent average income - Expansion ● Vietnam is a large and culturally diverse country that opens the door to new opportunities The number of coffee drinkers and Western cultural adopters represented by Starbucks is increasing in Vietnam ● Vietnam is a coffee-growing country and has quite a large demand for coffee, coffee shops are scattered in both cities and provinces 5.3.4 Threat analysis - Global pandemic and recession Competition from other coffee chains ● Many other coffee shop business models in Vietnam are built according to the chain system and threaten Starbucks such as Highland, The Coffee House, ● Sidewalk cafes can offer lower prices and satisfy the majority of customers, so they can attract customers with their new style of decor 5.4 Competition analysis The competitive issue now depends on the efficiency of Starbucks' brand positioning strategy in helping the company establish a good position in the Vietnamese market For example: Revenue (vnexpress.net, in 2019) Popularity Price Products Starbucks ~ 35,000 115,000 VND ● ● ● ● ● 783 billion VND Coffee Tea Frappuccino Ice Blend Other food and drinks ● Goods (cups, instant coffee, etc.) >70 branches Highlands ~ 19,000 75,000 VND ● ● ● ● ● >400 branches Coffee 2,199 billion Ice Blend VND Fruit tea Bread Cakes and other drinks ● Goods (cups, roasted coffee, etc.) 0 Tieu luan Table Comparison table between Starbucks and Highlands in Vietnam CHAPTER 6: BUSINESS PROPOSITION 6.1 Mission Statement Starbucks' mission statement is “To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.” (Starbucks.vn) With the mission statement, Starbucks has underlined the primary role of the business towards its clients, as well as emphasizes the significance of its buyers towards the firm's future growth Starbucks has set out principles to follow their mission statement, for example: ● Starbucks ensures the quality of each cup of coffee ● Starbucks connects with, laughs with, and uplifts the lives of its customers ● Starbucks is committed to the role of environmental leadership (Starbucks.vn) 6.2 Segmentation Starbucks separates the market into three main groups: geographic, psychographic, and demographic segmentation In the geographic group, everyone has different tastes of food by region In the psychological group, lifestyle is the key point For example, office workers often drink coffee every morning, so Starbucks can provide them a free drink or bonus service to attract them to be the regular customer For those who want to be ecofriendly, Starbucks provides them with limited-edition tumblers In the demographic group, Starbucks can divide the customer by their age and gender Children and teenagers often tend to like sweet drinks, on the contrary, people in adolescence and middle age will choose the bitter taste of coffee Similarly, men will often like coffee with a strong flavor than women 6.3 Target market Starbucks segments its target by demographics, psychographics, and geographies While it is possible to identify some segments in a potential market like Vietnam, Starbucks still takes a focused targeted marketing approach That means the company emphasizes on a narrowly defined market segment for high-quality, high-priced luxury coffee products and eye-catching packaging Starbucks customers: 6.3.1 Adults: from 25 to 40 years old Is the main target market of Starbucks (accounting for 49% of all Starbucks businesses) They are usually people with relatively high income, professional career and focus on social welfare What attracts them is the space design, the modern design is consistent in advertising as well as decoration This target audience grows at 3% per year 6.3.2 Young people: 18 to 24 years old Accounting for 40% of all Starbucks businesses What attracts them: Starbucks is positioned as a place where college students can study, chat with friends, meet people, 0 Tieu luan check in, Starbucks uses active social networks to build a youthful image dynamic, direct impact on this target group Young audience growth 4.6 percent per year 6.3.3 Children and adolescents: from 13 to 17 years old Children are often accompanied by their parents, teenagers while using Starbucks as a place to hang out with friends or study What attracts them: milky drinks or coffees with sugar, caffeine, whipped cream topped coffee In addition, Starbucks makes its brand child-friendly, such as special sizes for children 6.4 Positioning Starbucks presents itself as a highly respected brand that offers premium products with global standard flavors, helping to set it apart from competitors in Vietnam such as Highlands Coffee, The Coffee Bean, Trung Nguyen Coffee, and others CHAPTER 7: MARKETING MIX 7.1 Product An essential factor in the success of Starbuck is the products bearing the Starbuck brand values The brand constantly innovates and creates menus to serve each customer's needs In addition, Starbucks also learns about regions and countries about the population preferences, of local people to have a reasonable product launch strategy In the process of researching and learning about customer needs, Starbucks has drawn different criteria: ● Based on the type of coffee bean: roasted and ground coffee, whole bean coffee ● Based on caffeine level: regular coffee contains caffeine and decaf coffee ● Based on roast level: light roast, medium roast, and deep roast ● Based on taste: flavored coffee and unflavored coffee Realizing the potential of customers who not like coffee, Starbucks has developed other products from fruit and tea so that customers can enjoy the Starbucks space In addition, the brand is also very creative when developing products such as glass cups, porcelain cups, and thermos bottles, Not only that but these products are also designed according to each season and event 7.2 Price This has a significant influence on the consumption decision of customers In Vietnam, it is easy to see that the price of a glass of water at Starbucks is to times higher than that of another cafe brand This can affects the competition for the brand However, the customer segment Starbucks is targeting is mid-range to high-end, so this doesn't seem to have too much of an impact on revenue In addition, the ingredients, formula, quality, and brand reputation make this brand still popular with many customers Therefore, Starbucks is said to have a "reasonable" price compared to the quality Starbuck also has many promotions for old customers and discounts for those who bring bottles and glasses of the brand to buy water 0 Tieu luan 7.3 Place With Starbucks' place strategy in marketing, the company has a pretty clear vision to build a direct and personalized relationship with customers This vision led to the company distributing its products at Starbucks coffee shops, online stores, the Starbucks App, and retailers In the incipient period, Starbucks sold its products at Starbucks Coffee shops When the Internet grew, Starbucks offered products in Starbucks' Online stores Moreover, they also link with hotels, airports, and coffee shops for office workers This makes it easy and fast for Starbucks to expand its market and maximize sales profits Currently, Starbucks is present in 11 stores in Viet Nam Starbucks is located in stores with luxurious designs and prime locations in Vietnam, specifically in commercial centers In addition, the world's number coffee brand Starbucks is very attentive to connecting and taking care of its customers The proof is that the company has offered a lot of incentives on birthdays, customers have membership cards, in order to build and connect loyal customers 7.4 Promotion 7.4.1 The types of Starbucks sales promotion In its promotion mix, Starbucks used some forms like advertising, offline, online, social media, sales promotions, and word of mouth marketing 7.4.2 How has Starbucks implemented promotional mixes? If comparing the investment in public relations compared to other brands in the F&B industry, Starbucks' willingness to spend is quite "modest" In 2007, when McDonald's spent 727.7 million dollars on advertising and media activities, Starbucks spent only 16.6 million dollars With the remaining money, Starbucks uses to find and buy prime locations for its outlet stores Along with that, Starbucks also has many other special promotional activities, such as printing its logo on personal items and collaborating with brands and celebrities to launch other limited editions Starbucks knows the brand's position in the market, so this company also focuses on traditional marketing channels by using Starbucks Gift Cards to attract a large number of new customers Instead of Starbucks' "specific" marketing strategy of deliberately "writing the wrong name", the world's No coffee brand has used sheets of paper to stick it on the cup When it is the customers who share their feelings about this change, the effectiveness of the business strategy has spread to the whole world The word-of-mouth marketing channel is also used quite effectively by the company, to improve brand awareness and brand loyalty With over 27 million fans on Facebook and over million followers on Twitter, it's easy to see Starbucks' lightspeed expansion in the race against other players in the market What makes Starbucks' brand successful lies in its quickness to follow trends and creativity in launching communication campaigns 0 Tieu luan CHAPTER 8: EVALUATION 8.1 The forecasted results of the marketing plan According to algorithm-based forecasting service WalletInvestor, Starbucks is a “good long-term investment” Starbucks increased sales growth and profit margins by offering meaningful innovation to their customers while focusing on execution and operational improvements After Japan, South Korea, and Thailand, Vietnam is among the top five Asian countries in terms of per capita coffee consumption Viewed from different angles, Starbucks will continue strong profitable growth in the Vietnam market 8.2 The measurement to evaluate the achievement of the goal Starbucks made the decision to invest in its employees and the communities in which they operate Customer comment cards are used by Starbucks to assess employee performance The organization intends to achieve this goal by cultivating a culture that values acceptance and encourages personal development Personal growth develops via difficulty, as indicated in the firm's ideals, and the organization grows as well The company's diversity and accessibility policies reflect this acceptance aim Furthermore, Starbucks also collects data to track improvements and successful or problematic procedures REFERENCES https://text.xemtailieu.net/tai-lieu/xay-dung-ke-hoach-marketing-cho-cong-tystarbucks-coffee-197392.html https://cafebiz.vn/starbucks-viet-nam-chay-kpi-cuoi-nam-covid-mo-o-at-4-cua-hangtrong-thang-12-2021-dat-chan-toi-tinh-thanh-thu-6-20220105000435224.chn https://theleader.vn/chia-khoa-de-starbucks-viet-nam-phuc-hoi-nhanh-hau-covid1608109813464.htm https://cafef.vn/bai-hoc-lon-sau-2-nam-covid-cua-ceo-starbucks-viet-nam-chung-tamanh-me-hon-chung-ta-nghi-20220218135540549.chn https://m.vcci.com.vn/tong-giam-doc-starbucks-viet-nam-ly-nuoc-90-000-dong-thanhthuc-uong-hang-ngay https://cafebiz.vn/ceo-starbucks-viet-nam-chung-toi-gui-8-la-thu-nhung-chi-vai-chunha-chiu-giam-20-tien-mat-bang-co-nguoi-tha-bo-trong-chu-khong-giam-gia20220105124010177.chn https://123job.vn/bai-viet/starbucks-la-gi-hoc-duoc-gi-tu-thuong-hieu-coffee-noi-tiengbac-nhat-the-gioi-2815.htm https://text.xemtailieu.net/tai-lieu/xay-dung-ke-hoach-marketing-cho-cong-tystarbucks-coffee-197392.html https://amis.misa.vn/28940/chien-luoc-marketing-cua-starbucks/? 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(capital.com) Starbucks Beats Earnings And Revenue Estimates, Raises Forecast (yahoo.com) Starbucks Measures Its Success In Employee Accomplishments (Not Lattes) | Inc.com Corporate Social Responsibility: How Starbucks is Making an Impact — WhyWhisper Collective 0 Tieu luan ... https://igenz.net/chien-luoc -marketing- cua -starbucks/ #ftoc-heading-5 https://capital.com /starbucks- sbux-stock-forecast Starbucks stock forecast: Have Q1 results given the share price a kick? (capital.com) Starbucks Beats... Many Starbucks drinks are high in calories and sugar, causing a risk of harm if consumed regularly For example, a Starbucks cinnamon roll Frappuccino contains 510 calories and 85 grams of sugar,... Strength analysis - Brand popularity ● For many years, the company has successfully built a brand image as a luxury beverage company ● Starbucks appears in more than 65 countries with more than 40,000