Marketing Analysis – Starbucks in Pakistan
营销分析代写 He expanded the company to a café. Starbucks is now among the successful companies of the world among coffee shop business Starbucks……
Introduction
Starbucks is an American company which has wide ranging chain of coffee houses in the whole world. it was founded in Seattle city located in Washington States during 1971. The Starbucks was named after a novel character written by Moby Dick. Initially Starbucks was based to sell good quality coffee beans and equipment used to make coffee. One of the owner Schultz was impressed by the coffee shops in Italy.
He expanded the company to a café. Starbucks is now among the successful companies of the world among coffee shop business Starbucks is a market leader. Starbucks is said the provide the best quality coffee in the world. the environment of the coffee provides a place for the clients to relax and enjoy their time with friends and family, or alone. Its high-quality coffee, relaxing place and excellent services is what attracts the audience. 营销分析代写
The attitude that increased the customer value is that the company not only compete with the other coffee shops but with the whole market. According to the recent stats (October, 2019) Starbucks has the highest shares amongst the all other coffee shops in US.
“Market share of selected leading coffee chains in the United States as of October 2019, by number of outlets”
Starbucks has incorporated the 4Ps of marketing that has been helping the company to work successfully. Starbuck shows of the effective use of marketing mix can improve the development of the brand and its growth among other multination businesses. The marketing mix of Starbucks is flexible, and it is changed according to the situational needs. The 4Ps of marketing includes: Product, Price, Place and Promotion.
Products of Starbucks: 营销分析代写
Their business innovation has also affected the products the company offered. Initially the company focused on providing high quality coffee beans and equipment only. After expanding the company to coffee house, the quantity of products increased. Starbucks has been continuously developing and inventing new recipes and offering it to the customers. Due to their efforts on producing unique and good products the company has thrived for many years. The diversity in products attracts more customers and increases the sale of the Starbucks.
The products of Starbucks have following main categories: Coffee, Baked items, Tea, Shakes /Smoothies, Frappuccino, Merchandise (Instant coffee, mugs, etc.), other beverages and food
Pricing Strategy of Starbucks:
“Premium Pricing Strategy” is used by Starbucks. According to this strategy, Starbucks take advantage of the preconceived notion that good quality products are expensive. The higher the price, the higher the quality. Products of Starbucks are expensive than the competing companies. However, Starbucks still maintains the high position as it provides the customers with the with the good products. This strategy is related with the generic competitive strategy of the Starbucks which helps the company to maintain its brand image.
Starbucks Places: 营销分析代写
Starbucks products are offered mostly in Coffee shops and cafes. There are some other places and channels as well where Starbucks products are available such as retailers and online order.
Promotion:
Starbucks promotes their products through advertising, public relation, sales promotion and word of mouth marketing etc. however, the word of mouth marketing has played a major role in the promotion of the Starbucks.
Starbucks aims to expand its chain of coffeeshops around the world. It has coffee shops in most of the developed countries. If Starbucks opens a coffeehouse in Pakistan which is although a developing country. However, it will still be economical for the company as Pakistan has social class structure. It is already very famous in the country, the other brands cannot compete it. Not everyone will be able to afford it but elites of the country who are mostly in the capital city of the country can easily be targeted.
Assessing the Market 营销分析代写
PESTLE ANALYSIS
Political:
This component of the PESTLE focuses on the effect of governments on companies. Starbucks mainly provides customers with the coffee. To produce products such as coffee. The company needs raw material that are imported from the different countries or regions. Different countries and regions have their own set of laws that Starbucks must follow to regulate their operations normally. Violation of the laws can result in serious consequences for the company.
Starbucks not only has to follow the laws of the sourcing country but the must also adhere to rules and regulation by the global corporations and government of the developed and developing countries. United States has its own strict rules for multinational companies which Starbucks has to follow. Starbucks is under the supervision of both home government and government of sourcing countries as well as international bodies. A single mistake can affect the company drastically.
Regional integration is an opportunity for the company to expand its coffeehouses across the world. Governments across the world are working on providing better infrastructures to the people. this advancement helps Starbuck in order to access more suppliers and markets. In many countries bureaucratic red tape exists which creates more difficulties for Starbucks.
In Pakistan the poor infrastructure, poor regulatory systems, bureaucratic system, high fiscal deficits, foreign investment and reservation of key products will create difficulties for Starbuck. Federal Board of Revenues in Pakistan keeps a check on the companies and make sure they are providing the relevant taxes. 营销分析代写
Economical
Due to the global economic recession, people are cutting expenses of their lives. However, this global economic recession has not affected the consumption of coffee. People continued to take coffee with the same rate of amount as before. Instead of cutting down coffee people are opting for coffees that are less expensive. Considering this Starbucks should change its price and make it according to the market.
This can increase their customer rates. In developing countries, the decrease in the employment rate and increase in the economic growth provides Starbucks the opportunity to acquire increased revenues around the world from various markets. The increase in the labor costs is a threat to Starbucks as the company has to spend more expenses on the ingredients.
Socio-Cultural 营销分析代写
According to stats, most of the customers of Starbucks are adults above 30 years. It shows that the company needs to work on attracting young people to buy coffee from Starbucks. One reason for less young customers can be because of high prices of the products. The young customers are not able to afford it.
Considering this Starbucks should try to reduce the prices of their products as much as possible without compromising on the quality. This way the company can include the customers from middle and lower background. It is crucial for the company to engage the young adults into coffee culture and purchasing from their brand for long term prosperity.
As people are becoming more health conscious. Thus, introducing more products that are healthy and has less calories will attract more consumers.
However, In Pakistan studies shows that people prefer tea over coffee. Tea is consumed twice a day whereas coffee is consumed occasionally. People who drink coffee in Pakistan likes coffee which is milky. So in order to operate in Pakistan more money will be spent on buying milk.
Technology
Adapting to more technologies is a must for companies to flourish. Starbucks as well has taken few steps in this regard. Starbucks has collaborated with Apple; the company introduced a mobile app for ordering. Starbucks also provide internet facilities to its customers. So, they can spend their time in Starbucks with ease. If they want to work or enjoy. Mobile payments can also be introduced by the company. All these aspects will be equally beneficial in Pakistan. 营销分析代写
Environment
Environmentally safe practices must be adopted by all the companies for the sustainability of the environment. The environmental activists were concern that Starbucks practices are an addition to the pollution. Starbucks decreased the use of plastic and introduce reuse able straws. The company can also introduce the bio-degradable products instead of plastic. Starbucks will be required to follow the rules and regulations of the environment ministry of Pakistan.
Legal 营销分析代写
Starbucks has to follow the laws of the countries it import the raw material and home market US. If Starbucks has to open its branch in Pakistan, it must take into account the related laws and policies of the country. The products offered to client must be according to the health regulatory bodies instructions as well.
In Pakistan, 91% of the people prefer drinking tea and only 8% prefer coffee (Gallup, 2009). Islamabad can be a best option for it as it hosts many foreigners who will prefer Starbucks over any other coffee shop. Starbucks can target young adults as the trend of coffee culture among them is already increasing. If Starbucks comes to Pakistan, the key competitor for it is Nescafe.
People consume Nescafe coffee in Pakistan which includes coffee beans, instant coffee and chilled coffee. The pricing strategy of Nescafe depends on the competitors and demand. It is cheaper than the Starbucks. Starbucks can opt for similar distributing channels like Nescafe. They distribute their products according to the demand and make sure the product reaches the target audience.
Assessing the Company’s Capabilities
By viewing the company’s expansion and growth policy, it is clear that Starbucks is ready to expand in even more markets. And now developing markets should be a focus of expansion, to which Pakistani market suits well.
SWOT Analysis 营销分析代写
Strengths:
1.Strong brand image: Starbucks Corporation is a huge brand by itself and have a strong brand image in food and beverages industry. The company has tremendous following and growing number of loyal customers which adds to its stability. It is ranked 6th for being world’s most admirable company by fortune, and ranked 11th in Brand Finance US top 100, in 2021. Starbucks Corporation has a brand value of $11,246 Million, according to Interbrand in 2020.
Fig.1. Shows the brand value of Starbucks by Interbrand in recent times. 营销分析代写
2.Growth in outlets/ stores: in 1998 there were 1,886 stores worldwide, this number increased to 32,660 in 2020. Which means, 30,774 stores were added to the brand in 22 years of time period.
3.Strategic planning and reinvestment strategy: most of the profit company makes goes back into expansion of the business. Starbucks Corporation seems to have a well-established growth strategy that seems to work very well for them.
4.Quality and standards: Starbucks Corporation has done brilliantly in recent times due to its finest blends of coffee. They have maintained similar taste and standards throughout the locations. And the coffee has a unique taste acquired from a distinct way of blending coffee, which is loved by their customers.
5.Employee treatment: Starbucks treats its employee’s well, in terms of pay, flexible hours and holidays. Which eventually leads to employees that treat customers well. They have consistently listed in fortune’s Top 100 places to work at.
Weaknesses:
1.High prices: for middle-class, and working tier of the world, Starbucks is a costly coffee to consume, compared to other coffee outlets. High prices result in decreased number of consumers. 营销分析代写
2.Generalized standards of the products: the products are not crafted to needs or desires of the culture, and it can be seen worldwide that Starbucks outlets sell the same products in every store. The same products may not be in alignment with the preference of the customers from certain cultures.
3.Banishment of certain products: in recent times Starbucks has banished some popular and in demand products from the market, which can result in lead to loss of customer base.
4.Product imitation: Starbucks Corporation does not own any unique products. As they all are easily imitable by other rival corporations in the market, that may sell these at a low price, which may lead to decrease in popularity of Starbucks ((6)).
5.Dependent on import of coffee beans: Starbucks is highly dependent on the purchase of coffee beans, as if there is a fluctuation in prices of coffee beans, the prices of the products will also fluctuate. Resulting in the loss of customers.
Opportunities: 营销分析代写
1.Expand to new or developing markets: Starbucks has most of the outlets in developed countries, like USA and European countries. This could be very beneficial to expand in developing countries, where market competition is not very strong.
2.Diversity in products: by increasing the number of products and increasing the diversity in-between them can increase the customer base and can give a revenue growth opportunity. Starbucks can tailor their new products to the consumer preferences in developing countries to increase the rate of success there.
3.Partnership with other firms: co-branding always helps both the brands in increasing the revenue growth. Starbucks can also take advantage of this.
4.Delivery system: most of the customers use other delivery services to order Starbucks in the comfort of home. If introduced a delivery system, could open a new channel for the revenue growth.
Threats:
1.Competition with low cost coffee house: many coffee houses exist that sell coffee at a cheaper rate than Starbucks. This is a continuous threat to the corporation as to enjoy a same level of coffee but at a cheaper rate, customers may start to move away from the brand.
2.Copying of brands: Starbucks do not own any unique blends of coffee or products and these could easily be imitated by other cheaper coffee houses. Resulting in decreased customer base, which is a treat to value of the brand.
3.Rising prices of coffee: Company face a constant threat in the form of changing prices of coffee in the market. As they import special Arabian coffee, on which company is highly dependent. With the increase in coffee prices company may face a loss in revenue.
4.Being a global supply chain: as Starbucks corporation is a global supply change, so any disruption in the supply of the stock may cause a significant challenge for them.
Hofstede dimensions 营销分析代写
Hofstede model of six dimensions will be used to assess the marketing differences of Pakistan when compared to other countries.
Power distance: the extent to which less powerful members of society think that power is equally distributed. According to Hofstede insight Pakistan is on an intermediate level, as it cannot be properly established to preference of Pakistan on this item.
Individualism: the degree of interdependence of the members of the society. Pakistan is very low in this dimension as being a collectivistic society. It is because of the dependence and long-term commitment to the extended family.
Masculinity: indicates how much a society is driven by competition, achievement and success. According to Hofstede insight Pakistan scores intermediate on masculinity level.
Uncertainty avoidance: indicated how well a society deals with the uncertainty of the future, as it is unknown. Pakistan scores high on this item as it maintains rigid set of beliefs and ideas and intolerant to unorthodox behavior.
Long term orientation: indicates how well a country maintain a link to its past while dealing with future challenges. Pakistan scores intermediately on this item. 营销分析代写
Indulgence: indicates the extent to which people try to control their desires and impulses. Pakistan scores very low on this as it is a very restraint society.
Barriers to enter the market
Technical issue may arise in entering the Pakistan market, as star-up cost is high in acquiring Starbucks franchise. Brand loyalty would be difficult to break, as many coffee brands have established their base in the Pakistani food and beverage market, like Gloria Jeans, Second Cup, Coffee Beans and Tea Leaf, etc. Legalization and licensing will not be an issue as Pakistan’s policy related overseas investment is very cooperative and recently many international brands have set up their factories in Pakistan.
Company’s understanding of competency in new market 营销分析代写
Starbucks corporation has a long history of expansion in new market, as it is a renowned international brand. Starbucks Corporation has many outlets and stores in USA, Australia and most of the European countries.
But most of the expansion is done in developed markets, so it can be a tough market to work upon. Also, customer or population segments are not like the countries where they company has most of their outlets, making this a difficult market to step in. Starbucks do not have tailor made products for the targeted market but if they do make such products it will be helpful in grounding their feet in this market.
Cost structure competition and risks
Cost structure competition can be a major risk in Pakistani market. As many existing coffee houses and brands have a very cheaper rate to offer to the customer compared to Starbucks corporation. Brand loyalty for other previously existing brands may also pose a threat to the expansion of company to Pakistan. This market has also been unstable in previous years because of the security issue, but recently it has been stable, but reoccurrence of these events may pose a risk as revenue growth can be severely affected by this.
Distribution channels 营销分析代写
Starbucks corporation has access to many different distribution channels for outside the company operated stores. That includes joint ventures, warehouse clubs and grocery channels. There is a direct distribution process for the outlets outside the company to provide all products.
By considering all the risks, factors and previous expansion history of the corporation, it will not take long to launch the brand in Pakistani market. As interest of the investors is the step that may consume time, rest will take no time in launch of the brand. 营销分析代写
Conclusion
A renowned international brand like Starbucks could profit a lot by stepping in the market of Pakistan, as now company should start to expand in developing countries and markets to increase the revenue. Pakistani market seems to be a great point to being as have a diverse segments of customers. The market is not strong enough to tackle a big brand like Starbucks, so it will be easy to enter the market and attract customers.
But there are risks involved to that, being collectivistic country it won’t be easy to break previously existing brand loyalties and to compete with existing brands of food and beverages. Population score more on uncertainty avoidance means it would be a bit difficult to attract customers in the beginning. But given some time this can turn into a plus point, with increase in customer with time it would be difficult to break the customer base of Starbucks.
By entering the Pakistani market, this step will benefit both the company and the country in growth. There are always challenges and risks in stepping in a new field, but it also comes with great opportunities.
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