principle of marketing management

Executive Summary Starbucks is a renowned coffee corporation that operates several establishments throughout multiple nations.. Subsequently, Starbucks has established itself as a key pa

University of Northampton

NAME: TOAN MINH TRANG NORTHAMPTON ID: 23852779

WORDCOUNT: 2686 PRINCIPLE OF MARKETING

MANAGEMENT ASSIGNMENT 2

Table of Contents

3

2.1 Current Market ÁnaÌÏySÌS << Sóc cọ TH ng n nợ km 3

7.1 Short-term Marketing SŠtraf€BI€S co ng mưu mm 9

"—- 10

Executive Summary Starbucks is a renowned coffee corporation that operates several establishments throughout multiple nations The following is a comprehensive research on the company's background, including an analysis of Starbucks’ activities in Singapore and a thorough evaluation of its strategic objectives Utilize analytical methods such as PESTEL and SWOT to assess strategic pathways The research reveals that the company's strategy is marked by effective execution of extensive geographical growth, stringent product quality management, premium pricing tactics, and marketing techniques centered on customer loyalty and brand awareness The paper highlights the need of being adaptable in order to adjust tactics according to evolving customer preferences and market situations

Starbucks has emerged as a prominent force in the coffee market The company's widespread success has led to the establishment of over 33,833 outlets in 64 nations globally The firm engages in the manufacturing and dissemination of coffee beverages, along with providing customer-centric services at coffee establishments The objective is to provide clients with high-quality coffee at an affordable price Starbucks made its first foray into the Singaporean market in 1996 by establishing its first outlet in Liat Towers on Orchard Road Subsequently, Starbucks has established itself as a key participant in Singapore's coffee culture, with a multitude of branches around the whole island The brand's worldwide allure, along with its varied menu, has bolstered its popularity among both local residents and visitors

According to the company's website, their purpose is to motivate and cultivate the human essence by focusing on individuals, a single cup, and a single community at a time This statement encompasses basic beliefs, development strategy, and the company's connection with customers Starbucks places a strong emphasis on performance, giving priority to the active participation of humans in their supply chain and company processes The core principles include a distinct culture, a commitment to exceptional performance, and a sense of responsibility The company's corporate culture and strategy prioritize attributes such as bravery, questioning established norms, and promoting openness, integrity, and courtesy Starbucks, a global coffee chain, has a total of 33,833 shops around the globe In the Asia Pacific region,

Starbucks has a distinct approach in Singapore, where it portrays itself as a prominent operator in the restaurant industry

2.1 Current Market Analysis By January 2022, Starbucks had firmly established itself in Singapore and had a robust market presence The brand had effectively assimilated into the indigenous coffee culture, providing a variety of drinks and snacks The market circumstances, customer tastes, and Starbucks’ success may have changed since that time Starbuck locations are strategically positioned in areas with high levels of vehicular and pedestrian activity, making them very noticeable Typically situated at commercial hubs, corporate complexes, airline terminals, and other areas with high foot traffic Despite being a tiny island nation, there are around 146 shops present, which is a considerable quantity considering the country's small size and low population density

3.1 Political Factors

Political policies in Singapore exhibit a notable degree of stability and tranquility Since 2002, Singapore has regularly held the position of being the nation with the lowest political risk in Asia, according to the Corrupt Practices Investigation Bureau (2015) This has led to several benefits for both local and international enterprises, enabling them to experience fast growth in recent years Despite the favorable investment assistance laws for international enterprises, they encounter the obstacle of exorbitant rental fees and labor wages Politics is a dynamic and ever-changing domain, necessitating firms to exercise caution Starbucks has achieved certification for ethical commerce and sustainable branding, which has contributed to its status as a renowned worldwide coffee business

3.2 Economic Factors Singapore's economy is now robust, with GDP projected to sustain a favorable level in the foreseeable future Nevertheless, the corporation continues to be impacted by the worldwide economic downturn, potentially leading to rising personnel and operational expenses

According to a research published by the Economist Intelligence Unit, Singapore ranks as the costliest city globally for expatriates Consequently, StarBuck is compelled to raise prices in order to maintain its profitability

Moreover, there is a substantial amount of rivalry arising from nearby coffee establishments Typically, coffee rates in the local area are more affordable and well- known to individuals Two coffee brands, Kopi Tiam and Ya Kun Kaya Toast, are popular among locals in this area

Despite the obstacles, StarBuck has successfully established a strong presence in the hearts of Singaporeans and continues to see significant growth

4

3.3 Social Factors Singaporeans possess a keen interest in coffee and have a deep appreciation for coffee culture Since 1996, Starbuck has garnered a significant client base That is the primary factor contributing to Starbuck's continued robust presence in the market here Nevertheless, as soon as the firm contemplated the notion of raising pricing,

customers promptly reacted with disapproval, expressing their discontent and asserting their willingness to boycott if Starbucks proceeded with the price hike 3.4 Technogical Factors

StarBuck has developed an application to facilitate client information updates and streamline the purchasing process, in response to the advancements in 4.0 technology Moreover, technology facilitates enhanced management of the supply chain for firms Computer systems are used to monitor inventory, therefore ensuring a consistent supply of necessary items to fulfill client demand Technology enhances the efficiency of both consumers and sellers, therefore improving the whole experience and facilitating the management of coffee chains for enterprises

3.5 Legal Factors As previously stated, the Singapore government has implemented measures to assist international firms Food safety is the first concern that firms must prioritize For instance, it is important to have unambiguous labeling and traceable sources Applicants must possess a valid license and adhere to food safety regulations Health authorities should exercise attention while implementing rules and regulations related to the production and use of caffeine Starbucks in Singapore has the challenge of dealing with exorbitant duties imposed on imported coffee beans Presently, there is a 20% customs duty imposed on imported coffee beans

3.6 Enviromental Factors

Overall, the atmosphere of Singapore offers several benefits Nevertheless, Singapore, being a little nation, has the challenge of accommodating a substantial population within a confined geographical area due to its high population density Being compelled to compete for limited space among several other brands Furthermore, Starbucks is obligated to pay exorbitant rental fees for its retail establishments The firm also has difficulties with water supply and wastewater treatment as a result of Singapore's constrained freshwater supplies The firm provides solutions for implementing water-conserving technologies in its shops and using reclaimed water for irrigation at its coffee roasting facility

4 MICRO ANALYSIS

4.1 The Company Starbuck now operates 146 locations in Singapore However, the financial report specific to Starbuck's activities in this country is not publicly disclosed due to the worldwide nature of the company, which typically divides information based on its operating regions The shops are mostly situated in areas characterized by high visitor volume, ample space, and visually striking features Starbucks outlets, which have an average size of about 1,500 square feet, may be found in various settings such as office buildings, downtown and suburban shopping malls, and airport terminals Typically, these locations are frequented by a large number of pedestrians 4.2 The Customers

Starbucks primarily targets a varied client base, with a significant portion falling between the age range of 16 to 22 years old Due to its central location and upscale surroundings, this venue is often favored by young entrepreneurs as a great meeting spot for business discussions Furthermore, StarBuck is a renowned multinational coffee franchise, attracting travelers due to its widespread recognition Due to its positioning as a premium coffee brand, the price of the product is somewhat higher compared to local coffee As a result, the client base mostly consists of those who are prepared to pay a premium price in order to indulge in the product Beverage from Starbucks Starbuck's goods prioritize users’ well-being, making them appealing to those who are conscious of their dietary choices

4.3 The suppliers The product supply chain of Starbuck's in Singapore is often a blend of global and local sources, provided that it adheres to local food safety regulations Coffee beans are obtained from several nations worldwide, with a majority of them being cultivated 1n significant areas including Latin America, Africa, and Asia/Pacific Latin American coffee is particularly favored by Starbucks because of its consistent and enduring taste profile Starbucks offers a variety of food items, including bread and pastries, in addition to its beverage goods Starbuck reaches out to local vendors as the primary source for this item Similarly, same principle applies to milk in order to guarantee its freshness While packaging offers more flexibility, it is crucial to establish a sustained rapport with the provider

4.4 Marketing Intermediaries Like many global brands, Starbucks may use multiple intermediaries to facilitate its marketing and distribution Starbuck combines with e-commerce platforms such as Foodpanda, GrabFood or Deliveroo to serve many customers from many different regions Also use famous social networks to promote the company's product promotion campaigns, festival promotions and new product launches To get prime locations in popular locations, the company must also be able to collaborate with retail

spaces such as shopping malls and commercial complexes to get optimal store locations

5 COMPETITIVE ANALYSIS 5.1 Perceptual Map

Despite its widespread popularity and strong brand presence, this well-known coffee business nonetheless faces a significant challenge from its primary rivals, McDonald's and Dunkin Donuts Dunkin Donuts has a 16.09% market share, McDonald's Cafe possesses 11.94% of the shares, and Starbucks maintains its position as the top brand with a 21.83% share According to Statista, Starbucks has a total of 147

establishments in the nation, while Macdonald has 136, and Dunkin Donuts lags behind with a just 15 McDonald's Cafe is actively expanding its business, while Dunkin Donut has emerged as a strong rival because to its marketing methods that closely resemble those of Starbucks Undoubtedly, Starbucks surpasses its two rivals in terms of fame within the coffee sector Starbucks charges a greater price for a cup of drink compared to its two rivals However, the firm offers a wider range of coffee options and allows users to customize their beverages based on their preferred recipe Starbuck's unique selling point is in its ability to captivate and engage consumers, making it very successful in piquing their curiosity and attention

High Price A

Vv

Low Price

5.2 Competitor evaluations

DONUTS

coffee, in addition also many choicesin drinks at a to drinks, it also has drinks but more comparatively lower

specialized beverages

for more classes

line, a place to meet specializing on provides expedient and work at the baked products and _ and cost-effective

experience matters _ than Starbucks fast food

provision of Wi-Fi, ease of use, with few _ prioritize fast

encourages extended stays To summarize, Starbucks prioritizes providing a high-quality coffee experience together with a diverse menu In contrast, Dunkin’ Donuts primarily focuses on offering donuts and coffee in a fast and convenient format McCafé, on the other hand, provides a value-driven and efficient coffee service inside the McDonald's

establishment The selection among these options often relies on the customer's requirements for excellence, ease, and cost

6 SWOT ANALYSIS 6.1 Strengths Starbucks is a well renowned coffee brand with immense worldwide awareness Offering a wide range of coffee options, prioritizing excellent product quality that promotes health and ensures a satisfying customer experience at the shop Starbucks offers tea and light snacks as alternatives for consumers who may not have a preference for coffee Due to their immense popularity, the businesses are strategically situated in very accessible places inside densely populated public spaces In addition, the corporation often implements seasonal marketing initiatives that effectively draw in clients and foster strong brand loyalty

6.2 Weeknesses Starbucks, being positioned as a luxury brand, has somewhat elevated costs in comparison to the average market level The disparity in cost becomes even more apparent when contrasting with nearby coffee establishments This restricts the amount of clients who are worried about the price of the goods There is significant rivalry between local coffee brands and international ones

6.3 Opportunities In my observation, there is an increasing proliferation of beverage preparation methods Starbucks should change trends to stay up with today's young culture since it will be distributed more broadly In an era of rapid technological advancement, prioritizing ease via the use of apps and technology not only fosters innovation inside firms but also facilitates seamless product purchases for consumers, irrespective of their requirements Anywhere In Singapore, Starbuck is increasingly focusing on the architectural design of its stores A shop that has enough space and distinctive aesthetics will always allure clients

6.4 Threats There is constant rivalry in the market, with small coffee shops and the well-known companies described above engaging in competition with one another The fact that the price is too expensive in comparison to the prices of coffee in that region is another obstacle A slowdown in the economy may have an impact on the amount of money that consumers spend on luxury goods like premium coffee

7 STRATEGIC PRIORITIES 7.1 Short-term Marketing Strategies

Starbucks! immediate marketing approach in Singapore is unremarkable Similar to other markets, the primary objective is to enhance sales, establish enduring trust, and foster brand loyalty To establish relationships between businesses and customers, it is crucial to always stay informed about the latest trends in the industry Develop beverage initiatives that embody the unique characteristics of each season, therefore establishing a distinctive offering exclusive to Starbucks Establish a steadfast clientele by using exclusive incentives to foster enthusiasm for creating cards at this establishment To effectively engage Singapore's environmentally sensitive customers, it is advisable to advocate for eco-friendly behaviors, such as promoting the use of reusable cups

7,2 Long-term Marketing Strategies To further enhance its long-term growth prospects, Starbucks could consider expanding its operational scope in addition to the present initiatives being executed In addition to downtown districts, there is potential for growth into both urban and suburban regions, with the aim of reaching underserved communities or integrating into new commercial projects Health is always a primary issue, particularly among Singaporeans Based on the survey by AIA Singapore Insurance Company, over 30% of individuals are inclined to make substantial investments in health-oriented goods Hence, it is essential for the organization to prioritize product quality and provide a secure food supply

8 REFERENCES www.starbucks.com.sg (n.d.) Starbucks Singapore | Starbucks Coffee Company [online] Available at: https://www.starbucks.com.sg/

Starbucks (2022) Fiscal 2022 Annual Report [online] Starbucks Available at:

Annual-Report.pdf Oncoffeemakers.com (n.d.) What is the target market for Starbucks? [online] Available at: https:/Awww.oncoffeemakers.com/what-is-the-target-market-for- starbucks html#:~:text=Malaysia%20or%20Singapore.- [Accessed 23 Dec 2023] www.starbucksathome.com (n.d.) Where does coffee comes from? | Starbucks [online] Available at: https://www.starbucksathome.com/sg/story/where-does-coffee-

comes

Teachers, M by (n.d.) Starbucks - potential for marketing in Singapore - University Business and Administrative studies - Marked by Teachers.com [online]

10