Has Starbucks Lost its Mojo With Average Joes PDF

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Has Starbucks Lost its Mojo With Average Joes?
Once considered a master at branding and one of the most admired companies in the world, the company taught the America about coffee and provided a “third place” to enjoy it has lost its luster. At one point, Starbucks was opening a new store a da...

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Capitol University ETEEAP Department Principle of Marketing

Has Starbucks Lost its Mojo With Average Joes? Once considered a master at branding and one of the most admired companies in the world, the company taught the America about coffee and provided a “third place” to enjoy it has lost its luster. At one point, Starbucks was opening a new store a day. It still has more than 15,000 stores in 44 countries and Starbucks represents more than half (2.9 billion servings) of total coffee consumption (4.6 billion servings) according to NPD Group/Crest. But sales of specialty coffee were down in 2008 (the first decline in 5 years), and many people have traded down to other new (and less expensive) competitors, such as Dunkin’ Donuts and McDonald’s. However, Starbucks’ slide started long before the economy took a turndown. The real reason behind Starbucks’ trouble is that management began to ignore the customer. While trying to solve some customer complaints, Starbucks degraded the overall customer experience, becoming less passionate about customer relationships and their coffee experience. Soon customers began to realize the price they paid for their lattes was pretty expensive relative to the experience When Starbucks stock prices and sales began to tumble, management attempted to recover. Starbucks planned to ignite customer connection, slow store growth, shut down underperforming stores, increase global expansion, and improve the state of the US business. New coffee blends, new products and even coupons were introduced. So far, Starbucks has not had much luck. In 2008, 600 stores were closed and more are expected to be shut down in light of the economic downturn. Starbucks created and profited from the specialty coffee category, but customer preference and loyalties changed. Indeed, in the 2006 Customer Loyalty Engagement Index, Starbucks dominated its competitors; by the end of 2007 Starbucks had surrendered its dominance to Dunkin’ Donuts. A Lightspeed Research study revealed that more than 60 percent of Americans scaled back on expensive coffee in the past six months. This is good news for “low rung” coffee companies like McDonald’s; it has plans to open coffee bars in 14,000 US restaurants. So, how can Starbucks return to the “Starbucks Experience”?

Requirement: Write a comprehensive written analysis of case using the suggested format. I.

Problem

II.

Objective

III.

SWOT Analaysis (Strength, Weaknesses, Opportunities, Threats)

IV.

Alternative Courses Of Action/Marketing Strategies a. Product Strategy b. Price Strategy c. Place Strategy d. Promotion Strategy

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Recommendation...