Essay on Starbuck's Marketing Analysis

3441 Words Mar 17th, 2005 14 Pages
Statement of the Problem
Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world. The goal of Starbucks is to establish the company as the premier purveyor of the finest coffee in the world while maintaining the organization's uncompromising principles. In addition, Starbucks wants to develop its brand beyond being the preferred outlet from which to purchase coffee to becoming the preferred consumer brand.
The coffee company has capitalized on the new found popularity of specialty coffee with its addition of coffee bars globally. Starbucks Common Stock increased from $3.31 per share in 1994 to $10.00 per share by the mid 1990's. Despite the success of Starbucks, the company is faced
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Starbucks, struggle with brand-image may be the result of this diversity. It is no longer only a specialty coffee store with a special ambiance; it is an ice cream flavor, a cold coffee drink, and a mail order business. It is a whole bean and ground coffee product on the supermarket shelf, a mail order business, a coffee service for airline companies, and an assortment of specialty products such as mugs and coffee makers. Can Starbucks link these various distribution channels to make its brand-image even stronger?
A factor in the Starbucks' strategy that may be challenged is the belief that expansion of its sales in supermarkets will "pull customers out of lower priced [coffee] categories." There is a greater likelihood that such a strategy will pull customers out of the Starbucks' retail stores, while alluring new customers only in moderate numbers.
One of Starbucks' greatest strengths is the confidence shown by its rising stock price. After a steady increase, Starbucks' stock experienced a two for one split in 1995. The confidence in Starbucks stock is probably supported by the steady rise in its earnings per share. It is estimated that Starbucks' earnings per share will have risen to $1.00 by 1998. This is an increase of over 100% from the 1996 level. Starbucks' financial performance has generally been steady and strong.
Maintaining a philosophy of owning and operating all of its retail stores, Starbucks has not

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