starbuckshp

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STARBUCKS

AAKASH

ARUN

HARITHA

PRASANTH

PRAVEENPUSHPENDER

RITOBAN

SUHAS

VIGNESH



Quote

“We’re not in the coffee business serving

people”

“We’re in the people business servingcoffee”

-Howard Behar

Director of Retail Operations



Company Background

Founded by Jerry Baldwin, Zev Siegel and

Gordon Bowker in 1971 in Seattle’s Pike

Place Market

Purchased by Howard Schultz in March

1987 and transformed into what we see

today

Intention to create a business that does the

right things for the right reasons and is

financially successful



Guiding PrinciplesTo support their mission statement the

following six guiding principles help

guide the appropriateness of decisions:

Provide a great work environment and treat each otherwith respect and dignity.

Embrace diversity as an essential component in the waywe do business.

Apply the highest standards of excellence to thepurchasing, roasting and fresh delivery of our coffee.

Develop enthusiastically satisfied customers all of thetime.

Contribute positively to our communities and our

environment.Reco nize that rofitabilit is essential to our future



Corporate Strategic Goals

Growth

– Number of stores

– Increase Net Revenue

Preserve the Starbucks Experience

Be a Leader in Corporate & Social

Responsibility



FACTORS ACCOUNTING FOR THEEXTRAORDINARY SUCCESS OF

STARBUCKS

• THE CONCEPT

- A private retreat between work & home- A sanctuary

- A place to gather & connect

- Safe & comfortable



• THE FEELING

- Customers get to know each barista

- Share a common affection for the place- Employees are intuitive & sometimes sitwith customers & solve their problems

• QUALITY- Highest Quality fresh roasted whole beancoffee



• THE PRODUCT

- They purchase the best green beans in the

world

- Careful Selection process for coffee

- Coffee buying team evaluates over a 1000

samples each year



• THE RELATIONSHIP

- Coffee buyers travel 18 weeks / year to

countries of origin- To strengthen relationships with growers &

suppliers

- They continue to learn about coffee- They get the first pick of best crops worldwide



• THE IN STORE EXPERIENCE

- A combination of

People

Product

PlaceBrand

- Fosters repeat purchase & loyalty

- Served with a smile



• EXPLORE NEW OPPORTUNITIES

- Always on the look out

- Mail brochure

- Catalogue for demographic groups

- Toll free number



• THE MARKET

- Creating & Adapting to new market

places it enters without tampering withthe basic product

- Opening additional stores to increase

its market share

• THE STORES- Culturally sensitive store designs



• THE PEOPLE

- The company culture that cared about

its employees- Value relations employees have withcustomers

- Value trust staff have built withcustomers

- Superior customer service

- High degree of customer loyalty



• THE SALES

- It is necessary to assume intelligence

- It is necessary to assume sophistication

- It is necessary to inform the eager to

learn- This appeals to far more people



• THE AMBIENCE

- Clean

- Well maintained

• TECHNOLOGY

- Flavor Lock Bags to maintain freshness

• INTERNATIONAL EXPANSION STRATEGY

- Joint ventures with local retailers



What was the value proposition

that Starbucks offers to its

customers/it has created for thecustomers??



The Starbucks Value Proposition

1. Ambience

2. Customer intimacy

3. Coffee quality

4. Service

5. Partner satisfaction



Ambience

Starbucks America’s “third place”

Starbucks idea changed the norm from“buying coffee as a drink” to “the

experience of enjoying coffee”.

a place where people can enjoy their social

interactions, relax, or just spent some

time by themselves.



Customer intimacy

Starbucks really offers is “your coffee” — a

product made just for you.

Starbucks employee takes the time to ask

you about all the custom features you

want in your coffee (type, size, milk-type,

addins, etc.)



Coffee Quality

company‐owned stores – No franchising.

Full control of quality of its products andservices.

Control over Supply chain for high quality.



Service

Employees were trained on both “hard

skills” and “soft skills”.

created a friendly environment for

customers who felt special.

customer satisfaction.



Employee/ Partner Satisfaction

highest paid hourly workers.

stock options

lowest employee turnover

high employee satisfaction rate



Starbucks value proposition is not about

coffee, it is about the experience of

drinking coffee in a Starbucks store

integrating the product with the

emotional benefits.



Can the mix of product, place

and experience work in India?



Mix of Product

Product-mix expanded

Coffee is not consumed alone, it goes with

food

Product offerings

have alsoexpanded

beyondpastries

and coffee



Tea offerings – high consumption

like,

Full Leaf Tazo Tea LattesTazo Tea Infusion



Place

Any neighborhood where there is a perceived high

traffic for its stores

Be found in-store of various large chains

Individuals that are on the go and for those whoenjoy reading or listening to music.

Stealth outlets



Experience

Starbucks is a company that has differentiated itself

by convincing consumers that it is selling morethan a cup of coffee.

like,

public relationship, community activities andclimate change.

Coffee has gradually moved to be a social drink

Keenness to indulge in the western culture



Pre Launch Road Map

Pre launch

ResearchPhase

PromotionPhase



Research Phase

The research phase will include – Defining the Target Groups

Selection of a suitable location



Youth16-35

UpperClass/UpperMiddle Class

Tourists

Defining the Target Groups



Location

Delhi• Connaught Place

• Shopping area

• Near to IT firms

• Tourist Pace

Mumbai• Nariman Point

• Near to gateway of India

• Hub for IT & Call

Centers

• Presence of Colabaregion

Bangalore• Cunningham road

• Posh area

• Presence of malls &branded stores

• Garden city

Location



Promotion

PromotionMystery Ad Creation –

the emphasis will be on generating a curiosityamong the public that a new product is coming.

The message will contain the brand’s values aswell as testimonials of customers across theworld, the main feature that we will not disclosethe name of the brand

Disclosure of the name will take place inaccordance to the opening of stores, so thatpeople can enjoy and cherish at starbucks.

The whole campaign will be for a 30 days tenure



Road Map

Post Launch



Features That Need To Be Developed AfterPre-Launch

• Perfect Cup Of Coffee

• Third Place

• Customer Satisfaction

• Creating a Community

• Smart Partnerships

•

Innovation



The ‘Cutting-Edge’ Program

• Launch of the StarBucks Prepaid Card

• Innovative Strategy

•

Such a Program Launched in India willensure an immediate Connect with

people



Road Map

• Future Prospects – Launching Starbucks

in Tier-2 Cities

• Tie-ups

• Franchising



Major Forces that determine Indian Coffee

Industry Attractiveness

Porter’s Five Forces Model

Rivalry among Present Competitors-Indian CoffeeIndustry’s attractiveness primarily based on

competitors like Barista, Caffee Coffee Day andQwiky’s

Threat of New Entrants-Fast food Retailers likeMcdonald’s are trying to enter the market by servingcoffee along with milk-shakes and ice-creams.



Contd..

Bargaining Power of Suppliers and Buyers-

Significant negative growth in the urban low income

class and salaried middle class contributing togrowth of consumer market

Dramatic change being noticed in a primarily tea-drinking nation

By 2005 India would be home to 5000 coffee houses



Starbucks

Industry attractiveness of Starbucks mainly

based on

1)Product

2)Location/Place

3)The People



International Expansion-Already expanded

into Japan

Now setting sights on China and India

which are not major coffee consumers



Opportunities in developing market

Japan market

Star bucks has started in searching new areas of growthfollowing a deep retrenchment in the US in the past year.

Japan is Starbucks's biggest market after the U.S. and Canada

Overall sales in Japan for the current fiscal year that ended onMarch 31 is forecast to have stayed flat at 96.4 billion yen($1.03 billion) from the year before



In Japan , where coffee drinking is long

popular a coffee cost 100 yen which is achallenge for star bucks to retain customeras the cost is three times as much.

Star bucks Japan , which is a joint venture with

sazeby league , a Japanese retailer launcheda promotion offering customer a 2nd cupfor 100 yen if they purchase a coffeebeverage earlier in that day



China market

Star bucks china is counting on selecting high-visibility , hightraffic , café locations that they market themselves.

Sales per customer higher in china than in US

In china coffee is not consumed alone , it must go with food.

Patterns are shifting in India and china due in part to thechanging consumer aspirations and to indulge in westernexperience

Star bucks have captured a niche market early in china



Indian market

In India the high income class have been growing at the rate of 19 %

Middle income class have been increasing in size

Double income household are expected to increase from 13%to 35% which is an indication of tremendous spendingpower

Branded coffee retailing in India its at the beginning stage of growth

Coffee as gradually moved to a social drink



Consumer spending patterns have changed giving

rise to large opportunity in retailing branded

hot beverage

Indian coffee board has estimated 2015 India

would be home to 15000 coffee houses

Key players like barista , cafe coffee day and

Qwiky’s have to be taken onto account on

issues like pricing, customer loyalty, quality of

roducts etc



Controversies

Marketing strategy : They are accused of various anti-competitive practices like buying out of competitors’ leases at loss and clustering it in a small geographical area

Labor disputes : Notorious for violating labor laws. Accused of not being employeefriendly

Opening stores without persmission : Starbucks has been accused by localauthorities of opening several stores in the United Kingdom in retail premises,without the planning permission for a change of use to a restaurant. Starbucks hasargued that "Under current planning law, there is no official classification of coffeeshops. Starbucks therefore encounters the difficult scenario whereby local authoritiesinterpret the guidance in different ways

Alleged relationship with Israeli Military : Howard Schultz, was awarded “TheIsrael 50th anniversary Tribute award” and the controversies followed



Quotes by artists, writers, scientists and others have appeared on

Starbucks cups since 2005 in a campaign called "The Way I See It”.Some of the quotes have caused controversy, including one bywriter Armistead Maupin and another by Jonathan Wells that linked'Darwinism' to eugenics, abortion and racism.

Coffee quality: The March 2007 issue of Consumer Reports of American fast-food chain coffee called McDonald’s Premium Roastcoffee to be "cheapest and best", beating Starbucks, BurgerKing and Dunkin’ Donuts coffee. The magazine called Starbuckscoffee "strong, but burnt and bitter enough to make your eyes waterinstead of open.

Starbucks was wasting millions of liters of water daily, through apolicy that mandated a constantly running tap in each storeworldwide. Starbucks claimed the "dipper well" with the runningtap was there for sanitary reasons. This dipper well has since beenremoved from most stores worldwide in favor of a model that does

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