UKCBC unit 7 marketing principles 3

UKCBC unit 7 marketing principles 3

11-04-17 Maddox Smith 0 comment

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UKCBC unit 7 marketing principles 3

Task 4

Introduction

More than understanding the Marketing mix, it is more important to execute it perfectly. In this section of the report, we will discuss the application of marketing mix and how they are executed in practical. This section will also discuss the difference between the international strategies and the domestic ones.

1: To begin with you are asked to plan and prepare marketing mix for two different segments of the market in Starbucks. Use here an example of one existing segment and propose the second, new one. Design for both segments marketing mix plan (4P).

The existing segment of the Starbucks is the affluent class who can afford the price of the coffee the company offer. Following is the detailed discussion: –

1. Product: the company offer a high-quality coffee and people come back because of the taste of gourmet coffee and the experience they have while having a coffee in the Starbucks.
2. Price: the company never believed in decreasing the price and this existing class is ready to pay the price for the coffee the company offers.
3. Place: the company always target a premium location of the city for building their coffee house.
4. Promotion: the company believe in the word of mouth promotion and they don’t indulge much in another form of promotion because word of mouth promotion has made them the world-class company.

The new segment, which can be proposed for Starbucks, is the younger generation who have started exploring different taste and also look for a perfect hangout place. Following is the detailed discussion:

1. Product: along with premium quality, the company must also try to make it tastier by adding various ingredients to it. The company must also focus on introducing more products which can attract the younger generation.
2. Price: the price set should suit the young people pocket and it should also help them to bring more people to have this coffee.
3. Place: the company as it is focused on premium location which is the main attraction for the young people.
4. Promotion: the word of mouth strategy could also work in this case as this strategy is very strong in bringing more people and having the experience.

2: Your task is also to illustrate differences in marketing products and services to business rather than consumers. Next to Starbucks use here an example of another organization.

Marketing products and the services of Starbucks can be clearly compared with McCafe which is also very popular and quite different from Starbucks. McCafe sells little cheaper coffee and the class which have at McCafe is entirely different to that of people at Starbucks (Civi, 2013).

There is the difference in price, products and even the services are quite different in both the organisation. Starbucks service is more personalised while McCafe services relatively less personalised and professional.

3: Finally your report will end with the evaluation how and why international marketing differs from domestic one – use here, at least, two examples of marketing strategies Starbuck used to market their products internationally.

International marketing is quite different to that of a domestic one. The simple reason for this is while entering into a new market, the culture and taste and preferences of the customers completely differ (Luan & Sudhir, 2010). The company need to take into consideration the taste and culture of new market and modify accordingly. Following are two marketing strategies which Starbucks used to market the product: –

1. The company analysed the local market and modify their menu accordingly according to the taste and preferences of the customer in that respective country.
2. Another strategy which the company adopted to enter the international market is that Starbucks does not introduce all the products in one go. Instead, they focus on introducing one product at a time so that the customer can adapt the new product easily and quickly.

Conclusion

Application of marketing mix is the most crucial activity in the marketing process and of this is done in a proper manner than the company can succeed (Luan & Sudhir, 2010). So this step should be taken very carefully and after much analysis.

Reference

Civil, E. 2013. Marketing strategies to survive in a recession. International Journal of Business and Emerging Markets, 5(3), 254-267.

Ferrell, O. C., & Hartline, M. 2012. Marketing Strategy, Text and Cases. Cengage Learning.

Amin, S. H., Ramzi, J., & Zhang, G. 2011. Supplier selection and order allocation based on fuzzy SWOT analysis and fuzzy linear programming. Expert Systems with Applications, 38(1), 334-342.

Yangdong, W., Qin, A., & Zu Lixin, L. D. 2010. SWOT Analysis and Development Strategy of High Technology Service Industry in the Pearl River Delta. In Forum on Science and Technology in China (Vol. 10, p. 019).Order Now

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Unit 2 Marketing Principles – Starbuck Coffee

Explain how products are developed to sustain competitive advantage

No matter how big or popular a brand has become, it will always face the competition in the market from the new products and from the new companies in the market. But there is always a competitive advantage of an established rand is that company does not have to put much effort to gain the confidence of the customers as they are already happy with the previous products of the company. In case of Star Bucks, company has the trust of the customers, but even then, when a new product is developed, company has to define a strategy to sustain the competitive advantage (Thorson & Duffy, 2011). Company has the competitive advantage but the new product of the company should be developed to sustain that competitive advantage. For example, when a customer tries the new coffee product of the Star bucks, he should feel that it’s even better than the earlier products of the company.

Hence, the improved quality of a new product while developing that product is always essential to sustain the competitive advantage. Star Bucks also has to make sure that the previous feedbacks of the customers are considered and implemented during the development of the product. As discussed above that Starbuck’s store in Japan is a good example of competitive advantage. When Starbuck has decided to open its store in Japan then it focus only on the non-smoking zone to gain the competitive advantage as no other company started its chain in non-smoking zone. The Starbuck has got the huge brand recognition from here. And in Taiwan also, to beat the competition it has launched first ready to drink coffee.

3.2 Explain how distribution is arranged to provide customer convenience

A distribution channel is the way in which the company product reaches to the end user. A typical distribution channel of any product is provided in the below figure.

It is clearly seen that the distribution starts at the highest level, i.e. at the manufacturer and finish at the customer, i.e. end user. But in between these 2 levels there are many other levels such as the broker, wholesaler, retailer and home delivery salesman. This is kind of a chain and every product has to go through this distribution channel. Although, there is a new distribution channel, which is redefined by the e-commerce or online shopping. In this kind of distributor channel, customer is directly connected to the manufacturer and buys the product directly from the company through online shopping which is delivered to the customer at his home either by the company agents or courier service.

The distribution strategy adopted by Starbuck to provide the customer conveniences are as follows:

• At first time, Starbuck opened its first store at airport (very prominent location) for a reason that the consumer can taste the coffee while waiting for flight.
• After that Starbuck went to shopping mall to give enjoyment to customer while they are shopping, and then force the customer to get the coffee only by a click that means online.
• Starbuck choose the location where it can get the most of the customer and the customer can get Starbuck so it opened its stores near colleges, office and posh area of cities.

3.3 Explain how prices are set to reflect an organization’s objectives and market conditions

Most of the people would say that the prices of a product are set by the manufacturer of the product, but this is not entirely true. It is really the customer and the competition in the market which sets the prices of Star Bucks products. Since, Star Bucks is a big brand, it allows company a bit advantage while setting up the price of a particular product. The company could sell a product on the higher price than their competitors are charging for the same product (Hawkins & Mothersbaugh, 2009). The reason again is the brand and the customer’s trust and loyalty to the brand. But it does not mean that company could set the prices much heavy to earn the extra profit. In this case, the customers would like to try the product of other company and if he likes it and the price is very cheaper than the Star Bucks’ product, company will definitely loose the customer. This is why Star Bucks has to be very cautious while setting up the prices of their products. The pricing strategy which Star bucks use in setting up the prices is the premium pricing strategy. In this business strategy , Starbuck set the price of the product high as it is perception of the targeted market that the high price means high value and quality of product. The premium pricing also increases the competitive advantage and brand awareness for the company.

3.4 Illustrate how promotional activity is integrated to achieve marketing objectives

Promotion activities are of great importance for every product in the company, but when it comes to an established brand like Star Bucks, the promotion becomes easier as there are people who already know the brand and when go to a store for shopping, they ask the product by its name. But still, Promotion is required as company keeps launching new products and to make the customers aware of the new product promotion is required. Starbuck cafe is one of those organisations which use the quality of its products as it promotion. Starbuck offers the best quality of product and believe in mouth to mouth publicity. They believe that the best promotion of the product is done by its customers. Even for new country and new stores they never use any international campaign and even construct the store very fast and do the promotion with the help of this store “Starbucks everywhere” (Yu, 2013).

3.5 Analyse the additional elements of the extended marketing mix

The marketing mix is a 7 P’s process:

• Place
• Promotion
• Product
• Price
• People
• Process
• Physical environment

The first 4 Ps of marketing are already discussed in the previous sections of the paper and now the additional three will be explained which are People, Process and Physical Evidence.

People: Although the people are not directly involved in the marketing mix, but somehow they affect the marketing process. For example, the employees of Star Bucks represent the brand of the company and wherever they go they leave a trail of the brand. How these employees behave and how the other people, i.e. the customers are affected by their attitude helps the company in marketing.

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Process: The process of marketing mix is very critical and it also includes different sub processes. How a strategy of marketing is planned and implemented through a smooth process defines the brand. Not only the process of marketing but also the process of product development, its delivery to the customer also affects Starbuck marketing campaign. As Starbuck cafe is known for its quality of the coffee and the services offered by the staffs. So, Starbuck cafe regular checks the process of how the employees are offering the services.

Physical environment: The physical environment is mainly related to the environment of Starbuck’s stores and outlets. The ambience in which people sit and enjoy the coffee is very important. If a person is able to relax while sipping the coffee, it’s definitely a positive point for the marketing process.

Unit 2 Marketing Principles – Starbuck Coffee