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Sandra Dunlap Mayk Nazaryan Devon Gillissie Annie MacLellan Jared O’Sullivan . Starbucks Reusable Cups. Starbucks Reusable Coffee Cups. In hopes of reducing the amount of waste produced by disposable cups, Starbucks has introduced a $1 reusable cup
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Sandra Dunlap MaykNazaryan Devon Gillissie Annie MacLellan Jared O’Sullivan Starbucks Reusable Cups
Starbucks Reusable Coffee Cups • In hopes of reducing the amount of waste produced by disposable cups, Starbucks has introduced a $1 reusable cup • Customers using their reusable cups will receive a dime discount on each refill • Test-marketing in 600 Pacific Northwest stores resulted in a 26% increase in reusable cup usage
Overall Target Market: Men & Women aged 25-40 o Those who enjoy contemporary design, modern ideas and are sophisticated Young Adults aged 18-24 o Geared towards students, design their shops to provide ease of hanging out, socializing, and to do work, etc.
Target Market for this Retailing Strategy: · Same overall target market, but focusing more on those that are environmentally conscious · Secondarily, geared to those that are price sensitive that are looking to save money ($0.10 discount per reusable cup)
The Retailing Strategy Mix is a combination of: Product Price Location Communication Operations Management
Product: • Starbucks offers premium coffee beverages as well as fresh baked pastries, salads and sandwiches. • Starbucks offers special extras such as non-fat milk, consumer favorites such as frappuccinos, and different promotional products for different times of the year such as the gingerbread latte during Christmas time. • Starbucks is always concerned with the up-keeping of high standards • Starbucks is constantly improving the quality of their products by using a process called total quality management.
Price: • Starbucks is priced higher than their general counterparts and have subsequently positioned themselves accordingly. • Starbucks strives to deliver high value to their consumers
Location: Starbucks has a done a great job selecting store locations in North America. They place stores in highly visible areas and open locations as clusters. The store clusters make it easier to manage demand as customer traffic increases; allowing them to keep their competitive edge.
Communication: Starbucks is not a company heavily engaged in the traditional forms of marketing communications: those being T.V and newspaper ads, billboards, and radio for the most part. Delivering customers incentives that build customer loyalty and retention are at the forefront in Starbucks marketing strategy. Such incentives include song or app downloads, free internet usage in stores, and discounts for using re-usable containers They also have implemented a rewards program that gives customers’ points for each purchase
Operations Management: Starbucks mainly operates through business processes such as joint ventures and licensing arrangements. A joint venture according to Investopedia is “A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task,” and in this case the task would be opening a Starbucks. Starting a Starbucks via a licensing arrangement would be a bit different.
Positioning: • Starbucks is positioned at a high price with high quality. • Starbucks tries to portray an imagine that sets them apart from other coffee shops such as Tim Horton’s or Dunkin Donuts. • Setting themselves apart helps Starbucks gain a strategic advantage in the coffee market.
Target Market Fit: • The retailing initiative that Starbucks has put into place has a significant fit with their current target market. • The notion of conserving and sustainability are at an all time high, and those in these segments are quite aware of the issues of conservation and sustainability. • Being economically friendly is not a new concept for Starbucks, they have promoted sustainable projects in the past and aim to position themselves as a green company.
Urgency and Importance of Reusable Cups at Starbucks: • The initiative is not overly urgent or important relative to the overall strategy at Starbucks • Although it does promote a “green” vision for the company, it does not have the drastic impact if the initiative fails or is not implemented in the first place. • There is also no immediate urgency to introduce this retail initiative
SWOT of Reusable Cup Initiative: • Strengths: • Fit with current strategy • Increases awareness • Extends brand offerings • Saves consumers money • Weaknesses: • Added expense for Starbucks • More procedures needed to manage promotion/increased training • Lower usage then anticipated • Lose 10c in revenues for each beverage sold • Opportunities: • Extends market reach • Could uncover more socially responsible companies to partner with • Threats: • Competing companies have similar initiatives (Tim Hortons) • Customers may bring in their own mugs
Implications on the Current Retailing Strategy Mix: • Product – No change, product quality remains constant • Price – Slightly changes as there is a savings of $0.10 per refill • Location – No change in location • Communication – More of an emphasis on environmentalism and sustainability, but overall doesn’t have a large change in media outlets (ex. Commercials, advertisements, etc.) • Operations Management – No major change, operations stay the same except for the importing of the cups themselves and the additional time it would take to clean the cup before use.
