PDF Brand Analysis - Starbucks

STARBUCKS BRAND ANALYSIS

Prepared by: Gina Neace COMSTRAT 564 Washington State University, Spring 2017

INTRODUCTION:

Inspired to sell high-quality coffee beans and equipment, Starbucks was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker3 who had studied the art of roasting under Alfred Peet, founder of Peet's Coffee and Tea.4

Originally located in Seattle, Washington, at 2000 Western Avenue3, Starbucks started as a single roaster and retailer of whole bean and ground coffee, tea, and spices. In 1977, Starbucks moved its store to Pike Place Market, which is affectionately known to today's consumers as the "original" Starbucks4 and is considered one of the busiest coffeehouses in the United States.5

Howard Shultz, the current chairman and CEO, joined Starbucks as director of retail operations and marketing in 19822, after being impressed with the product while visiting the Pike Place Market store. Following a business trip to Milan in 19832, Shultz convinced the founders of Starbucks to test serving espresso in their downtown location and in 1984, Starbucks served its first latte.2 Truly believing in the idea of a coffeehouse, Shultz left Starbucks shortly thereafter to start Il Giornale coffeehouses, but returned in 1987 when he, with the backing of several local investors, bought Starbucks from founders Baldwin, Siegl, and Bowker.2 In December 2016, Howard Shultz announced that effective April 2017 he would be stepping down as CEO (for the second time; the first was in 2000), becoming executive chairman, with Kevin Johnson who currently serves as president and COO, succeeding him.6

Since 1987, Starbucks has grown to become a globally recognized company, adding Ethos Water, Evolution Fresh, Hear Music, La Boulange Bakery, Seattle's Best Coffee, Tazo, Teavana, and Torrefazione Italia to their portfolio of subsidiaries.7 Additionally, Starbucks has partnerships with Apple, PepsiCo, Spotify, and Arizona State University, along with many other local and national organizations.12

Today, Starbucks has more than 25,000 retail locations in 75 countries and employs more than 300,000 partners (employees).8 In a recent financial release report, Starbucks reported to stakeholders that in 2016 they netted $21.3 billion in sales/revenue worldwide, an 11% increase yearover-year.9

Their primary target audience of adults 25-40 accounts for 49% of their total business.10 These individuals tend to live in urban areas, have professional careers, higher household incomes,

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are interested in social and environmental responsibility, and view the Starbucks logo as a status symbol they want to be associated with.11

Their secondary target audience, young adults 18-24 years of age, accounts for 40% of Starbucks total business.10 These consumers view Starbucks as a cool, alternative place to socialize and study and connect with Starbucks through social media and emerging technology that Starbucks introduces.

BRAND INVENTORY:

BRAND PROMISE:

Starbucks mission statement is, "to inspire and nurture the human spirit ? one person, one cup and one neighborhood at a time" 1 with a promise, written on every cup, that your drink should be perfect and if not, they can make it right.

BRAND PERSONALITY:

In looking at the five main dimensions of brand personalities: sincerity, excitement, competence, sophistication, and ruggedness, we see Starbucks promise at work.

As a company, Starbucks' promise communicates to consumers that they will not only work to inspire them, but also the communities in which they reside in. Through fostering and creating an environment where consumers want to come and stay; a second home, a place of comfort where you can relax or spend time with a friend, and a place that encourages you to be your very best, Starbucks exemplifies sincerity, competence, and sophistication.

Furthermore, Starbucks prides itself on being consistent in not only the products it delivers but also in the service consumers receive. Sincerity and sophistication are exemplified in partners greeting consumers with a smile, fixing their beverage if it's not exactly how it should be, and offering to pay for your beverage when you've had a bad day. At a community level, we see excitement, competence, and ruggedness exemplified through the Starbucks Foundation that was founded in 1997 and funds countless literacy programs, youth programs, and community service initiatives; all of which don't just give back to the community but get Starbucks partners involved in the community.

Their POD (point of differentiation) is the commitment and investment they have made in ethically sourcing sustainable products. An industry leader and innovator, Starbucks invests heavily in the farmers and communities that grow and produce their products; supporting improvements and agricultural diversification projects that are directly tied to raising sustainable crops.16 Furthermore, Starbucks makes a conscious effort to work with suppliers to ethically source not only the merchandise they sell, but the furniture and products used in their stores.16

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BRAND ELEMENTS:

Wanting to capture the seafaring history of coffee and Seattle's strong seaport roots, a 16th century Norse woodcut of a twin-tailed mermaid/siren13 was selected as the logo for Starbucks in 1971. In an effort to stay relevant and evolve, slight updates have been made to the logo over the years, but holistically it continues to hold true to its roots.

BRAND PORTFOLIO:

Starbucks serves coffee, hot and cold handcrafted beverages, fresh food (including baked pastries, sandwiches, salads, oatmeal, yogurt parfaits, and fruit), packaged snacks, merchandise, and consumer products such as ready-to-go beverages, k-cups, and coffee equipment.

Additionally, Starbucks sells a variety of consumer products at intermediary retail locations such as grocery stores, Walmart and Target. These include coffee, tea, and ready-to-drink beverages.

CURRENT BRAND STRATEGIES:

In addition to utilizing the ubiquity of their stores to help drive business, Starbucks utilizes a mix of broadcast, print, OOH, digital, mobile, and social media. Their current brand marketing and communications strategies focuses on not only promoting seasonal items like Valentines Day merchandise and the Molten Chocolate Trio, but also on saying thank you to consumers for everything in 2016.

Click image to view TV spot

Currently, Starbucks has 36.5 million page likes on Facebook, 13 million followers on Instagram, and 11.8 million followers on Twitter.

In terms of spend, during the 2016 fiscal year (October 2015-September 2016), Starbucks reported spending $248.6 million14 on advertising initiatives; a 9% increase from 2015.

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COMPETITOR ANALYSIS:

DUNKIN' DONUTS:

Founded in 1950 by Bill Rosenberg, Dunkin' Donuts opened its first restaurant in Quincy, Massachusetts.15 Today, Dunkin' Donuts touts themselves as "the world's leading baked goods and coffee chain" with more than 11,300 restaurants worldwide in 36 countries.15

Serving hot and iced beverages, donuts, bagels, and other baked goods, Dunkin' Donuts markets themself as a brand for the average-Jo. Additionally, Dunkin' Donuts sells coffee beans and grounds, k-cups, and bottled iced coffee beverages in grocery stores and other intermediary retail locations.

Positioning themselves as quality coffee and food at lower prices, Dunkin' Donuts slogan, "America runs on Dunkin'" is targeted towards the everyday, hard-working American.18 Utilizing a media mix of broadcast, print, OOH, digital, mobile, and social media,19 Dunkin' Donuts current brand marketing and communications strategies appear to be focused on their partnership with the NHL and celebrating love this Valentines Day.

Currently, Dunkin' Donuts has 14.1 million Facebook page likes, 1 million Instagram followers, and 1.1 million Twitter followers.

MCDONALD'S:

Founded in 1940 by Richard and Maurice McDonald, McDonald's started as a Bar-B-Q restaurant in San Bernardino, California20 but became a self-service drive-in restaurant that served only 9 items in 1948.20 In 1954, while on a business trip to sell the brothers more multimixers, Ray Kroc became fascinated by the operation and ended up joining the company; eventually buying the brothers out in 1961.20 Today, McDonald's is the leading global food service retailer with over 36,000 locations in more than 100 countries21 with most of the restaurants (80% worldwide) being owned and operated by 5,000 independent, small-and mid-sized businessmen/women.22

Traditionally known as a fast-food restaurant, McDonald's serves a variety of items including breakfast, burgers, fries, sandwiches, salads, snacks, desserts, and beverages (shakes, smoothies, soda, and coffee). In an effort to become a direct competitor to Starbucks, McDonald's launched a line of flavored coffee beverages in the mid-2000s called McCafe.

Positioning themselves as innovators (healthy menu options) while also holding true to their roots (classic hamburger and fries), McDonald's slogan "I'm lovin' it" speaks to their effort to create an experience to remember. Utilizing a media mix of broadcast, print, OOH, digital, mobile, and social media, McDonalds current campaign "What's Cooking Across America"

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