29A – Venture Concept No. 2

Starbucks has one of the most unique cultural characteristics out of all the firms, which influences the performance of the business and employees. The corporation’s organizational culture ties in with the company’s tactics for successful brand development and global expansion. The mission statement of Starbucks is, “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” 

Opportunity: I believe that an opportunity exists for Starbucks to enhance their advertising and social media marketing methods. This belief comes from the experience of frequently visiting the Starbucks stores located on campus because the coffeehouse’s main advertising medium is the store itself. The CEO of Starbucks, Howard Schultz has stated that “Our stores are our billboard,” meaning that the Starbucks experience and the physical stores provide more advertising in comparison to those that are posted through radio, mobile, and television. The unmet need is Starbucks potential to increase their advertising and social media marketing methods for various promotions such as offering BOGO (buy one, get one free) offers to consumers to encourage them to purchase a drink and receive one to give to a close friend. The people who have this need are young people ages 16 to 24, typically in high school or college. The need came from when I asked some of my peers out of curiosity if they had ever seen an advertisement for Starbucks before, in which all of them answered no. Starbucks has strayed away from traditional advertising within the past few years, due to the fact that they did not require it to promote the brand. However, the addition of traditional advertising can strengthen the brand, increasing the knowledge of certain products to the audience and increasing loyalty to the brand. The need has always existed, Starbucks does not follow the typical traditional methods of advertising, which some consumers view as methods businesses appealed to target markets before the introduction of social media. To meet this need, Starbucks has gradually shifted towards advertising on social media platforms. The geographics for Starbucks consists of three regional divisions for the global market. The demographic for Starbucks generally has very high income and is senior in age. The age range for men and women are ages 22-60, and the life-cycle stages ranges from young, single people not living at home to older married couples with dependent children. This is the demographic audience due to the fact that consumers with higher income have higher disposable incomes compared to those with lower incomes. This allows them to spend more money towards luxury, such as Starbucks.

Innovation: The innovation I am proposing is for Starbucks to convey to the audience and target market is communicating their brand purpose through social media. A majority of the target market use social media frequently, and in order to promote new and current products, Starbucks should post and promote the products through Facebook, Twitter, and Instagram to receive high engagement. To appeal to the target audience and encourage them to purchase merchandise, the products should be highlighted through social media posts or viral marketing campaigns. Partnerships and collaborations with more brands and retailers can also be done, such as deepening partnerships with overseas businesses in order to significantly elevate the “Starbucks experience” for foreign customers who are new to the brand and integrating multiple platforms. The brand’s social media success has the potential to be unrivaled in comparison with other coffeehouses. Rather than emphasizing and maintaining the focus on the products and services, which enables competitors to quickly adapt to, brands like Starbucks should accentuate the focus and intent of the brand. The main points that Starbucks focuses on when advertising include quality-based differentiation, excellent customer service, and a high focus on customer orientation. Instead of creating a generic coffee advertisement focusing on the smell of fresh ground coffee, a new seasonal product, or how one is saving the rainforest by purchasing ethically traded coffee, Starbucks highlight’s the brand’s purpose of connection. To appeal to the target audience and encourage them to purchase merchandise, the products should be highlighted through social media posts or viral marketing campaigns. Through the development of at least one major digital campaign that goes viral will strengthen the brand through it being highlighted through social media posts or marketing campaigns. If this strategy was implemented, its success can be monitored through social media engagement, such as likes, comments, and shares on Facebook and retweets on Twitter. The service could be an enviable social media strategy that can result in staggering numbers of insight on Facebook, Twitter, Instagram, YouTube, and other social media sites.

Venture Concept: My innovation will solve or address the opportunity I identified by helping Starbucks advertise and sell their products with a sole purpose in mind, highlighting the brand’s sustainability and not portraying them as a giant global corporation. Customer’s unmet needs will be solved through Starbucks accentuating the intent of the brand, such as saving the rainforest by purchasing ethically traded coffee along with strengthening brand loyalty, which has been fortified by the corporation through its delivery of high-quality products and services throughout years. The needs and motivations of consumers include a quiet environment to hold a conversation with family, friends, and colleagues, private time to his or her-self with free Wi-Fi and something to drink, or a unique present or gift for a friend. Starbucks has appealed to a large target market by offering customers luxury in the form of a coffee beverage, along with a “home away from home,” to do work or take time for themselves. This enables the brand to return as the third place in consumers’ minds, with the first being home, second as the office, and the third as a place to relax and grab a drink like Starbucks. Despite the fact that technology innovation is ingrained into the company, it is not emphasized towards consumers to maintain the homely environment and preserve the “Starbucks experience” that motivates customers to visit the stores. What Starbucks embodies that is important towards the audience is that they have packaged something that is relied on by many- caffeine, and made it appeal towards a larger intended audience. Consumers tend to lean towards Starbucks not only for the products, mainly the beverages, but for the experience as well. The customer experience is one of the main defining points that separates Starbucks as a brand from other competitors in the industry. To appeal to the target audience and encourage them to purchase merchandise, Starbucks highlights its products through social media posts and viral marketing campaigns. Customers purchase Starbucks products and services because they appeal to what consumers want qualitatively and quantitatively, along with the opportunity to purchase limited edition drinks and innovative products.

Feedback Summary: Based on the feedback I received, my previous venture concept was well-explained and thorough, going in-depth and providing detailed insights to the three major elements- opportunity, innovation, and venture concept, of my business idea. One of the most important factors that can make or break a business is customer satisfaction, Starbucks’ customer experience is an essential point which separates the brand from its competitors. By making sure customers are happy, prioritizing their values and necessities, and increasing customer lifetime value, it can create an overall positive experience to make the business unique and successful. The feedback emphasized the importance of discussing the various regions for the global market as an opportunity, which is oftentimes overlooked by many brands and companies. However, other countries are constantly offering new and potential target audiences. The current CEO of Starbucks, Kevin Johnson, states that by pushing “a coffee culture in China, the reward will be healthy, long-term, profitable growth for decades to come.” While Starbucks currently incorporates strategies to reach diverse populations and cultures by conducting extensive research on the history, culture, and the locals’ taste preferences to best adapt their products, the brand can also offer items from their international menu in other countries and to adapt not only the exterior, but also the interior of stores to the country’s culture. According to the feedback, demographics also play a crucial role, so the brand can further understand their target audience. Income and cultural factors may impact how the target customer or consumer uses technology, and cultural values and barriers must be researched to adapt the products. Starbucks’ localization strategy is to blend local products with innovative store designs to fully adapt to the country’s culture. When Starbucks entered the market in China, they knew it was not about the coffee, but about reviving a tea house culture that existed for thousands of years. In China, the brand started by serving tea at Starbucks locations before coffee was sold, enabling the market to become accustomed to the brand. Starbucks was also not localized, or branded as a Chinese drink brand within China, due to the fact that local consumers are more trusting of foreign food & beverage brands, associating Starbucks with America.

Changes to Venture Concept: Based on what I learned from the feedback; I changed my venture concept by emphasizing customer satisfaction, or Starbucks’ customer experience, discussing the various regions for the global market as an opportunity, and the brand’s demographics. As one of the foundations for business success, customer satisfaction, or the measure of how products or services providing by a company meet customer expectation, plays a crucial role in a company’s success in the market or industry. On average, a loyal customer is worth up to ten times as much as their first purchase, and that it is six to seven times more expensive to acquire a new customer as opposed to keeping a current one. Research shows that a majority of customers will choose a company that makes them satisfied, even if they offer higher prices over a cheap but low-quality competitor. Customer satisfaction also leads to maintaining loyalty, which Starbucks has fortified through years of delivering high-quality products and services. Global marketing is necessary for many companies and businesses to eventually achieve, when businesses market on a global scale, they increase their client base, their traffic, and their bottom line. By increasing the number of customers that a company has is an effective way to increase sales, improving the effectiveness of a company’s products and services. It also develops and fosters a stronger competitive advantage for the company on a global scale. While many companies and businesses don’t have trouble at competing at the local level, giving them the opportunity to enable customers worldwide to be better-informed and more focused on the products and services offered. Demographics are a key factor for businesses to obtain an edge in marketing products and services to generate more revenue and profit margins. By using demographics, a brand is able to find the group of people who fit the mold of the ideal customer. The location where a consumer lives can greatly influence his or her needs, wants, and access to goods and services. Cultural 'tastes' and traditions can affect food preparation, ingredients commonly used, and availability of certain products. As a brand, Starbucks must then adapt to the locals’ taste preferences to satisfy their wants and needs. Companies and brands need to conduct extensive research on the history, culture, and the locals’ taste preferences, becoming well educated on current trends and predictions, and identify what is needed to provide consumers with ingredients and information necessary to cook a popular meal and fully adapt products and services to the country’s culture.