Starbucks

Database Marketing Plan

Prasad Venkittathodi | Vaibhavi Prajapati

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History The first Starbucks was opened in Seattle, Washington, United States of America on March 30, 1971 by three partners Jerry Baldwin (English teacher), Zev Siegl (History teacher) and Gordon Bowker(Writer). Entrepreneur Alfred Peet inspired all of them to sell high quality coffee beans and equipment. The name is taken from Moby Dick, after Pequod was rejected by one of the co-founders, the company was name after the first mate on the Pequod, Starbuck. The first Starbucks Coffee store in Seattle`s Pike Place Market

Canada Timeline 1987 Starbucks opens its first international location in Vancouver, British Columbia at the Seabus Skytrain Station. 1995 Starbucks forms an alliance with Chapters Bookstores in Canada, creating what will eventually become the ultimate Canadian book and coffee lovers experience.
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1996 In January, Starbucks opens for business in Toronto, Ontario, with five stores opening their doors on the same day. 1999 In April, Starbucks opens its first location in Saskatchewan, Canada.

Starbucks Canada || Database Marketing Assignment ||

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2000 In July, Starbucks signs the Eastern Canada Master Licensing Agreement with Caf Vision International to open stores in Quebec and Atlantic Canada. 2001 Starbucks Coffee Canada incorporates as an independent, 100% wholly owned subsidiary of Starbucks Coffee Company. 2002 Starbucks opens its Canadian Regional Support Center in North York, Ontario, establishing a Canadian management team. 2004 Starbucks begins offering whole bean and ground coffee in Canadian supermarkets. 2005 Starbucks Coffee Canada celebrates the openings of its 400th Company-operated and 100th licensed locations. In February, the Starbucks Duetto Visa card is launched in Canada, in partnership with RBC Royal Bank. 2006 Starbucks Coffee Canada celebrates the opening of its 500th Company-operated location. Report on Business ranks Starbucks Coffee Canada #1 in the foodservice category in its Annual CSR Ranking report. In January, the second annual Lattes for Literacy Day is held in Canadian stores, raising more than $300,000 for Canadian literacy charities Frontier College and ABC CANADA Literacy Foundation. In April, Starbucks Coffee celebrates their first Tumbler Day in Canada by providing complimentary brewed coffee when customers use a travel mug to help reduce paper cup waste in celebration of Earth Month.

Starbucks Canada || Database Marketing Assignment ||

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2007 In March, Starbucks celebrates its 20th anniversary in Canada. 2008 In July, Starbucks forms a partnership with the Vancouver Community Foundation, the largest and oldest community foundation in Canada, to help administer Shared Planet Youth Action grants and develop relationships with social entrepreneurship organizations. In August, Starbucks and the Vancouver Community Foundation administer $25M to Schools Without Borders. In August, Starbucks Coffee Canada regains full ownership of the Coffee Vision Internationals Starbucks Licensed stores in Quebec and Atlantic markets. 2009 In January, Starbucks and the Vancouver Community Foundation administer an additional $100M in Youth Action Grants across five organizations including Jane Goodalls Roots and Shoots, Ashoka Youth Venture, Green Street Youth Action Centre, Canada World Youth and Katimavik. In February, Starbucks Coffee Latin America and Starbucks Coffee Canada join together as Starbucks Coffee Americas, under the leadership of President Colin Moore. In June, Starbucks Corporation is named as one of Jantzi-Maclean's 50 Most Socially Responsible Corporations, and as one of The Best 50 Corporate Citizens in Canada by Corporate Knights. 2010 In January, Starbucks Coffee Company is named one of the Global 100 Most Sustainable Corporations in the World by Corporate Knights. In February, Starbucks Coffee Canada is named one of Canadas 10 Most Admired Corporate Cultures by Waterstone Human Capital. In May, Starbucks Canada opens its first-ever LEED-registered store as part of Starbucks worldwide LEED pilot project. Located at Bathurst and St. Clair in Toronto.

Starbucks Canada || Database Marketing Assignment ||

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In June, Starbucks Coffee Canada is recognized as one of Canada's Top Employers for Young People (2010) by the Globe and Mail, and as one of The Top Foreign Corporate Citizens in Canada by Corporate Knights. In July, Starbucks launches a national partnership with Evergreen with the Pledge to do some Green Facebook initiative. Also in July, Starbucks Canada begins offering free, unlimited Wi-Fi to customers in all companyoperated stores. In October, Starbucks Canada introduces the Clover brewing system in the Britnell Books Starbucks location at Yonge and Bloor in Toronto, and at the Robson Street store in Vancouver. 2011 Toronto and Vancouver are selected as two of seven global locations for marquee events to help mark Starbucks Global Month of Service. Canada hosts an additional 85 local community service projects across the country in April 2011. In the same month, Starbucks Coffee Canada helps to pave the way for all coffee houses in Vancouver to offer cup recycling across BC by collaborating with waste management companies to make cups a recyclable item.

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OUR STARBUCKS MISSION

To inspire and nurture the human spirit one person, one cup, and one neighbourhood at a time. Here are the principles of how we live that every day:

Our Coffee It has always been, and will always be, about quality. Were passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this; our work is never done.

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Our Partners Were called partners, because its not just a job, its our passion. Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respect and dignity. And we hold each other to that standard. Our Customers When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. Its really about human connection. Our Stores When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. Its about enjoyment at the speed of lifesometimes slow and savoured, sometimes faster. Always full of humanity. Our Neighbourhood Every store is part of a community, and we take our responsibility to be good neighbours seriously. We want to be invited in wherever we do business. We can be a force for positive action bringing together our partners, customers, and the community to contribute every day. Now we see that our responsibilityand our potential for goodis even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead. Our Shareholders We know that as we deliver in each of these areas, we enjoy the kind of success that rewards our shareholders. We are fully accountable to get each of these elements right so that Starbucksand everyone it touchescan endure and thrive. Onward.

P age |6 Objectives

Starbucks is an American brand following the same traditions all over the world including Canada, They serve different type of Coffee products, food and drink including serve free Wi-Fi to satisfy growing customer needs. They have even launched their brand of coffee beans so that the customers can enjoy the same Starbucks taste at the comfort of their home. Their main objective however will be to provide most unique coffee experience to their customers Some of their other Objectives are a. Starbucks offers new design and concept which makes them the No # 1 choice of their loyal customers b. Starbucks have established some unique and innovative strategies to acquire new customers c. To maintain their brand image through amazing service and great quality products Market Plan (Target Market) Geographic o Region o Area o Density o Climate Demographics o Age o Gender o Income o Occupation o Education o Race o Home Owner Psychographic o Personality o Lifestyle Behavioural o Usage Rates o User Status o Benefits o Loyalty

: Canada : All : Mostly urban : All Season : 15 years of age and above : All : All walks of life : Any : Any :Not Applicable : Not Applicable : Who loves great coffee : Healthy and lead an active lifestyle : Regular Basis : Regular : Great taste, Great service : Looking for amazing service and great coffee December 1, 2011

Starbucks Canada || Database Marketing Assignment ||

P age |7 Situation Analysis Company and Product Starbucks is constantly striving hard to provide customer one stop for unique coffee experience. The Store are always in immaculate condition and often is place where people get together for studying or even meet friends. Starbucks is sometimes location landmark at certain places. Starbucks being an international company has close to 55,000 stores around the world and more than 4000 stores in Canada. The company is growing tremendously and is now again becoming a market leader with increasing sales. In past few years Canadian coffee market is growing close to 157 % and new entrants have limited space to grow, Since Starbucks is an established company in Canada it has opportunity to increase competition by taking customers from its competitors. Starbucks is a premium coffee shop with prices sometimes beyond the reach of certain group of people and now machines are available to make good coffee at home. Economic conditions have also created lot of issues like increase in oil prices, transportation prices have increased, as best coffee beans comes from places around the world such as Africa and South America . Starbucks is still working hard to provide best consumer experience and great coffee at the best price possible. Competitive Analysis Tim Hortons is one of the biggest competitors in Canada for Starbucks, with Second cup catching up. Tim Horton is offering low priced coffee in price sensitive market, and customers who are less knowledgeable about coffee are attracted to Tim Hortons. Some new local coffee stores are also threating Starbucks as they would prefer local shop than driving all the way to some Starbucks coffee shop. Marketing Strategy Positioning strategy Starbucks is expanding in a big way, opening coffee shops in new locations and near densely populated areas. Starbucks have coffee shops close to malls, retail shops or even urban business areas so that customers does not have to travel far to get their favourite coffee. Starbucks logo is one of the most recognizable logo in the world, and having a Starbucks coffee cup in their hands is a sense of pride for loyal customers who do not want to be seen with competitors products. Starbucks coffee shops are huge, with great design and proper spacing and always with the smell of freshly brewed coffee. This helps customers to relax and enjoy their time with friends and family or even business associates and keep ordering coffee again and again.

Starbucks Canada || Database Marketing Assignment ||

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P age |8 Product strategy Starbuck have always been innovative with their Products, offering new holiday packages apart from their regular coffee products, Starbucks have always been associated with coffee, but now they have also included other products such as Starbucks coffee beans, coffee maker, frappe, chocolate drinks, sandwiches etc In order to maintain high quality and great customer service all the Starbucks are operated and service by Starbucks partners i.e. Starbucks employees making them one the largest self-operating coffee shops in Canada and around the world, Since Starbucks have long term contracts with their partners, prices are always in control. Starbucks is very lucky for one critical fact coffee is addictive so sales and customers will always remain, all Starbucks needs to do is provide customers with customer service experience and great new products and innovation. Starbucks coffee range includes espresso and drip brewed coffee including whole bean coffee and beverages including hot and cold drinks, sandwiches, Panini, pastries and salads. Starbucks also offers Starbucks card.

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Some of Starbucks Innovating Product and Offers Advertisement

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SWOT

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Starbucks: Being a Responsible Company Starbucks is a member of the World Cocoa Foundation Starbucks World AIDS day, December 1

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P a g e | 12 Compliance of privacy laws and ethical business practices (all information from http://assets.starbucks.com/assets/sobc-fy09-eng.pdf) About the Standards of Business Conduct Starbucks empowers all partners to make decisions that impact our reputation. Individual actions at work shape how the world views Starbucks, which is why its so important that we each take How We Treat One Another At Starbucks we treat each other with respect and dignity. This means that all partners are entitled to work in an environment that is free of harassment, bullying and discrimination. How We Treat Our Customers Legendary customer service is a top priority at Starbucks. We strive to make every customers experience pleasant and fulfilling, and we treat our customers as we treat one another, with respect and dignity. This means, for example, that we never harass or discriminate against our customers. Diversity Starbucks actively creates and promotes an environment that is inclusive of all people and their unique abilities, strengths and differences, and promotes diversity as a strategic and competitive business advantage for the company. Workplace Health, Safety and Security Partners are expected to follow all safety rules and practices; cooperate with officials who enforce these rules and practices; take necessary steps to protect themselves and other partners; attend required safety training; and report immediately all accidents, injuries and unsafe practices or conditions. Starbucks Quality and Customer Protection Starbucks commitment to quality means that we take steps to protect our customers health and safety. You can play your part by following all proper procedures relating to the storage, handling, preparation and service of Starbucks coffee and other products; by working to ensure clean, sanitary and safe conditions in all of our facilities; and by continually exploring ways to maintain and improve Starbucks quality standards and practices.

Starbucks Canada || Database Marketing Assignment ||

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P a g e | 13 Substance Abuse and Weapons Starbucks has strict standards regarding substance abuse and weapons. Partners are not permitted to use or possess alcoholic beverages on company property, except where alcohol is specifically permitted at a Starbucks-sponsored social event. An exception applies if your job involves the sale of alcohol, but in that case, you may not consume the alcohol and must participate in any special training required for that business Wage and Hour Rules Starbucks is committed to following all applicable wage and hour laws and regulations. To help ensure that all work performed for Starbucks is compensated correctly, partners compensated on the basis of hours worked must report and record time accurately in accordance with established local procedure. Compliance with Laws and Regulations Starbucks is committed to full compliance with the laws, rules and regulations of the countries in which it operates. You must comply with all applicable laws, rules and regulations when performing your duties. Interaction with the Government Starbucks is committed to complying with local laws, regulations and codes and to working fairly and honestly with government officials and others in our communities. In doing so, our actions must meet high ethical and legal standards. It is against Starbucks policy (and may be a breach of law) to offer or make a payment or gift of any kind in order to facilitate a local process or to influence a local government official. Sales Practices and Advertising Starbucks competes on the merits of our products and services in all sales and advertising. Our communications with our customers or potential customers must be truthful and accurate. When we say something about our products and services, we must be able to substantiate it. We sell the quality of what we do; we do not disparage our competitors. Fair Competition Fair competition laws are intended to promote vigorous competition in a free market. It is in Starbucks best interest to promote free and open competition. Starbucks must make its own business decisions, free from understandings or agreements with competitors or suppliers that restrict competition. We consider compliance with these laws of vital importance. Starbucks Canada || Database Marketing Assignment ||

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Conflicts of Interest We all must avoid conflicts of interest. A conflict of interest exists when a personal interest or activity interferes or appears to interfere with the duties that you perform at, or owe to, Starbucks. A conflict of interest may unconsciously influence even the most ethical person and the mere appearance of a conflict may cause a partners acts or integrity to be questioned Gifts and Entertainment A gift or favour should not be accepted or given if it might create a sense of obligation, compromise your professional judgment or create the appearance of doing so. In deciding whether a gift is appropriate, you should consider its value and whether public disclosure of the gift would embarrass you or Starbucks. Securities As a partner, you may become aware of significant and confidential information about Starbucks business, often called material non-public information. Partners may not buy or sell stock (including by cashless exercise of stock options) or any other security on the basis of this information. In order to avoid any potential problems, you should interpret the term material non-public information broadly. Other Intellectual Property As a partner, the things you create for Starbucks belong to the company. This includes inventions, discoveries, ideas, improvements, software programs, artwork and works of authorship. This work product is Starbucks property if it is created or developed, in whole or in part, on company time, as part of your duties or through the use of company resources or information. Analysis of Consumers Starbucks store is targeted to consumers from all walks of life, i.e. from 15 years of age and above, anyone who likes good coffee is welcomed at the store. Everyone is given equal treatment whether its male or female. Starbucks have also tied with various organisations such as being associated with World Aids day which creates good faith among buyers. Starbucks have been foremost in community service and youth program, They have also started Starbucks Foundation and Ethos Water funds

Starbucks Canada || Database Marketing Assignment ||

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P a g e | 15 Creative elements Starbucks logo is one of the most recognized logo in US and Canada. Almost everyone in US and Canada has heard about Starbucks and once in their lifetime may have passed by the store or at least been in one. Starbucks have been forefront in creating new products for the benefits of their customers, and they have some signature themes, like the smell of fresh coffee at each and every Starbucks the same, logo placements, seating arrangement are all the same. This enables the customer to recall the brands distinctive image. Database Requirements Starbucks has its own loyalty card which gives them inside view of their most loyal customers, and they can always come up with new programs which increases loyalty also allow referrals which in turn increases customers base with Starbucks LTV and Referral Program The Lifetime Value or the LTV of Starbucks customers is shown explained below with an excel chart Case: Starbucks does a referral program

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P a g e | 17 Conclusion

Starbucks Card is one of the best options the company has to increase customer retention and referral, as seen in above charts and spreadsheets. Acquisition in terms of LTV has a slow growth; The Loyalty program will give motivation to Loyal customers. As seen in five years the LTV will increase from $30 to $489. A new customer acquisition is approx. $40 and referral is be approximately $20 and it is seen that in five years spending some amount on existing will keep them happy and they in turn will bring in more business Starbucks can use his referral program to its advantage and increase market share in Canada and also around the world.

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P a g e | 18 Appendices 'About us' Starbucks http://www.starbucks.ca/about-us/company-information retrived on DEC 15, 2011 "Starbucks VIA ready brew hits grocery aisles around the world" http://news.starbucks.com/article_display.cfm? article_id=436 Sept 07, 2010 retrieved on DEC 15, 2011 Zincresearch "Starbucks & Instant Coffee: Good Business Strategy?" http://zincresearch.wordpress.com/2009/10/06/starbucksinstant-coffee-good-business-strategy/ October 6, 2009 retrieved on Dec 15, 2011 Ethical practice http://assets.starbucks.com/assets/sobc-fy09-eng.pdf http://blog.kissmetrics.com/wp-content/uploads/2011/08/calculating-ltv.pdf About us http://www.timhortons.com/ca/en/about/index.html

Starbucks Canada || Database Marketing Assignment ||

December 1, 2011