Project 1B New Business Challenges & Concept

Visualization
Objective: How Starbucks can attract more customers after 2
p.m.
Team Novelty
Jason Clarke, 2462915
Renan Fretes Pinto, 2437260
Estee ten Brink, 2448149
Diego Chang, 2481529
Patrick Mahoro, 233899

Expert
Mr van den Berg

Fontys University of Applied Sciences

International Business and Management Studies, IB1I group 2
[Company address]

17/3/2015 Eindhoven, the Netherlands

Preface
We are first semester International Business and Management students at Fontys
University of Applied Sciences. In this semester we have been introduced to how
businesses are operating internationally. The main focus in this project was
international trends and innovation opportunities. How do international companies
describe their value proposition of a new business concept? How do they create a
competitive advantage and how do they target their customers?
These questions were answered following by research of a multinational company
called Starbucks.

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Table of Contents
Preface......................................................................................................................... i
Executive summary.................................................................................................... 4
1.

Introduction.......................................................................................................... 5

2.

The Brand............................................................................................................. 6
STARBUCKS HISTORY.................................................................................................... 6
PRODUCT AND PRODUCT LINES....................................................................................... 6
MARKETS IN WHICH STARBUCKS IS ACTIVE........................................................................7
CONSUMERS............................................................................................................... 7
COMPETITORS............................................................................................................. 7
POSITIONING MAP......................................................................................................... 8
VALUE PROPOSITION..................................................................................................... 9
CUSTOMER SEGMENT.................................................................................................. 10
MARKETING MIX......................................................................................................... 10
MOOD BOARD........................................................................................................... 13

3.

Researching trends............................................................................................ 14
MOBILE INTERNET...................................................................................................... 14
ONLINE SHOPPING...................................................................................................... 14
LOCALLY SOURCED PRODUCTS....................................................................................... 15

4.

Selecting trends................................................................................................. 16
LOCALLY SOURCED PRODUCTS....................................................................................... 16
THE FLAWS OF THE OTHER TWO TRENDS........................................................................16
TREND CANVAS.......................................................................................................... 16

5.

Ideation.............................................................................................................. 17
BILL........................................................................................................................ 17
KATY....................................................................................................................... 17
EXPLANATION OF THE COCD BOX................................................................................. 18

6.

Value proposition................................................................................................ 19
VALUE PROPOSITION................................................................................................... 19
WHY OUR IDEA IS PROFITABLE AND EASY TO IMPLEMENT....................................................20

7.

Visualization....................................................................................................... 22

8.

Conclusions and recommendations....................................................................23

Bibliography............................................................................................................. 24
Appendices............................................................................................................... 26
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1.

PROJECT PLAN..................................................................................................... 26

2.

MOOD BOARD (CHAPTER 2)...................................................................................29

3.

TREND CANVAS................................................................................................... 30

4.

MOOD BOARD, BILL............................................................................................. 32

5.

MOOD BOARD, KATY............................................................................................ 33

6.

MOOD BOARD (CHAPTER 7)...................................................................................34

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Executive summary
The first part of the report explores the brand and covers the following points
Starbucks Corporation is the largest American global coffee company in the world.
They are well-known for providing high-quality coffee and they serve hot and cold
beverages. They have over 20,000 stores in 65 countries operated by 180,000
employees globally.
The Starbucks Experience refers to customers enjoying the nice and fresh taste of
coffee in a comfortable and warm environment. Following the explanation of the
Starbucks experience, the report continuous to focus on the markets Starbucks
operates in. Those markets are the consumer and business market. The consumer
market in 2013 reached industry revenues at $29 billion in the US. The industry is
forecasted to grow at an annual rate of 3.9% over the next five years.
Next to the consumer market, Starbucks is also active in the business market
offering food service, Starbuck Office Coffee, Licensed Stores and Starbucks
Corporate Sales.
The primary target group of Starbucks is men and woman between the ages of 25
to 40. In addition, young adults between the ages of 18 to 24 represent 40 percent
of the total sales of Starbucks.
Starbucks is positioned as a place where students can hang out, relax, socialize and
meet people. Furthermore, Starbucks appeals to the young generation and people
who are keen on technology as they introduce new advances in technology such as
a mobile payment app.
Starbucks competitors are Dunkin Donuts, McDonalds, Tim Hortons Caf & Bake
Shop, Dutch Bros and Coffee time. Within the competitive market, Starbucks is wellpositioned due to their high quality coffee, unique experience and excellent
customer service.
The value proposition refers to the core benefits a company or brand offers to their
customers. In this case, Starbuckss value proposition is to provide a genuine
service with a wide variety of roasted and richly brewed coffees in an inviting and
pleasant atmosphere.
The marketing mix refers to the combination product, price, place and promotion
which describe and make up the whole offering of a company. Starbucks starts with
the explaining the first p, namely product. The product is divided into two
categories; namely food and drinks. The second factor, price in case of Starbucks is
relatively high as the produce high quality products. As far as the location (place) is
concerned, Starbucks locates their stores in neighbourhoods and metropolitan areas
in order to attract as many customers as possible. Next to the location (place),
promotion of Starbucks is very effective as they engage with their customers using
social media platforms such as Facebook, Twitter, LinkedIn and YouTube.

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Physical evidence refers to what the customers experience and observe when they
enter a Starbuckss stores. In the case of Starbucks that is the store layout, wide
product range and employees preparing, making and serving their coffee.
People, refers to the way staff is organised and works in order to deliver excellent
customer service. Starbucks train its employees to prepare, make and serve high
quality coffee.
Process. The process of a business refers to how they deliver their product or
service. It is the whole chain of activities that take place with the purpose of
satisfying customer needs. For Starbucks the process starts from carefully selecting
coffee bean farmers, to distribution and transportation methods to preparing and
serving foods and beverages.
Starbucks mood board is a collection of inspirational elements when we think of
Starbucks.
Following the first part of the project (brand), the second part when on to exploring
the trends and then selecting one of them to use in the next step of the project,
ideation.
By researching the internet, the following trends were found:
Mobile internet trend. Starbucks could consider developing an app whereby they
provide their customers with standard information such as store locations, rewards, and
gifting options

Online shopping trend: In order to profit from the growing trend, Starbucks could
introduce an online shopping service whereby they deliver their products to
customers as soon as they order them on their website.
Locally produced products: Starbucks could strengthen their relationship and
simultaneously attract more customers from local areas by introducing locally
sourced products in their stores.
Following the found trend as mentioned above, we selected the trend Locally
sourced food as it has the most potential of attracting more customers. The reason
for that is because local foods, beverages and products lure more customers as they
are very likely to try out something new and different.
The trend canvas answers important questions regarding how the locally sourced
food trend will attract more customers and even create a new customer group.
Step five was about Ideation. Ideation is concerned with using the locally sourced
food trend as a practical and workable solution for attracting more customers after
2 p.m. Before the trend was used for the purposes mentioned above, the typical
customer of Starbucks was explained. In this case, we came up with two young
customers around the age of 30 who are trending and fashionable.
Following the description of the two customers, the COCD box was used as a way to
generate different types of ideas, selecting the best ones and the implementing
them as a new strategy for Starbucks. The general or main idea was to serve fresh,
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healthy an organic foods and beverages menu which consists of locally produced
products.
The final step of the project was to create a new value proposition for Starbuck;
which is the following: Starbucks provides a genuine service with a wide variety of
locally produced products that serves the needs of the environmentally conscious
consumer.
The explanation of the environmentally conscious consumer was that consumers
find it more important these days to consume local products as that contributes to a
more sustainable and better community. In addition to the new value proposition,
we explained how it would create a new and exciting experience and how that will
solve the problem of the low customer flow after 2 p.m.
The chairman of Starbucks, Howard Schultz explained that the replacement of
coffee machines and the streamlining of their stores have weakened the Starbucks
Experience. He added that the unique, traditional and special experience was fading
away and that new innovate solutions would be needed to address that problem.
We addressed that problem by explaining that Starbucks should replace their
current coffee machines that are automatic to new coffee machines that are
operated manually.
Furthermore, we added that Starbucks should slightly change the interior of their
stores in a way that it reflects the local community. Finally we explained that the
locally sourced foods, beverages and products would require a decentralised
structure as the decision making process would be more in the hands of local
managers that can put forward changes that would benefit the local store and
community.

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1. Introduction
For this project we researched a multinational company regarding new innovations
strategies they could implement based on international trends. The purpose of this
report was to gain a good understanding of how to start an innovation process and
build a business concept.
During the project we analysed our company and solved the company challenge
with the use of different international trends. We solved this by creating ideas with
the COCD box that were related to our chosen trend. We continued our research by
making the value proposition which links with the value of the brand and the target
market. Furthermore, we created a mood board in which we visualized the idea for
our new business concept. And based on our analysis and conclusions, we gave
some recommendations to the company.

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2. The Brand
STARBUCKS HISTORY
The Starbucks Corporation is an American global
coffee company and coffeehouse chain. It was
founded in Seattle in 1971 and is the largest
coffeehouse company in the world with over 20,000
stores in 65 countries. There are currently over
11,000 Starbucks stores in the United States.
The coffeehouse company serves hot and cold
beverages, whole- bean coffee, instant coffee, fullleaf teas, pastries, and snacks. Most stores also sell
pre-packaged food items, hot and cold sandwiches,
and items such as mugs and tumblers.
Currently, there are 32 Starbucks Evenings locations in the United States which also
offer a variety of beers, wines, and appetizers after 4pm. Through the Starbucks
Entertainment division and Hear Music brand, the company also markets books,
music, and film.
Starbucks Coffee is currently ranked number one worldwide with the biggest market
share in the coffee industry. Furthermore, it has over 180,000 employees globally
with over 100,000 working in the United States alone.

PRODUCT AND PRODUCT LINES

Starbucks is well-known for providing high-quality coffee. This is their core product.
What Starbucks really provides in terms of delivering customer value is a taste of
real, high quality coffee in an inviting and pleasant environment. Customers who
visit Starbucks and sit there with family, friends or colleagues enjoy The Starbucks
Experience. The Starbucks Experience is all about offering a comfortable, warm
and personal environment where people feel at home.
STARBUCKS PRODUCT PORTFOLIO
Coffee/ Beverages/ teas (hot and cold beverages iced coffee, latte,
Frappuccino, expresso, cappuccino , whole-bean coffee, micro ground instant
coffee, full leaf teas);
Food-pastries/snacks (Muffin, Croissant, sandwiches, salad)
Tumbler (Starbucks Tumbler, straight tumbler, design your own curved
tumbler);
Equipment (Coffee Press, coffee grinder, expresso machine, coffee machine).
PROGRAMS FOR BUSINESS
Food service: Offering Starbucks in your foodservice operation
Starbucks Office coffee: offering Starbucks in your office
Licensed stores: Offering the Starbucks experience (Starbucks space)
Starbucks Card Corporate Sales: Offering Starbucks as a gift.
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MARKETS IN WHICH STARBUCKS IS ACTIVE

Starbucks is both active in the consumer and business market
THE CONSUMER MARKET
Starbucks operates and competes in the retail coffee and snacks store industry. The
industry grew at a low annualized average growth rate of 0.9% from 2008 till 2013
with industry revenues at $29 billion in the US. The industry is now forecasted to
grow at an annualized rate of 3.9% over the next five years, with a potential to
reach $35.1 billion revenues in the US.
This growth would be mainly driven by an improving economy, increase in
consumer confidence and expanding menu offerings within the industry. 1
THE BUSINESS MARKET
Although the consumer market is Starbuckss main focus, they also operate in the
business market.
As mentioned above, they offer food service, Starbuck Office Coffee, Licensed
Stores and Starbucks Corporate Sales to the business market.

CONSUMERS
The primary target group of Starbucks is men and woman between the ages of 25
to 40. They represent nearly half 49 percent of its total target market. The target
audience is increasing at a rate of 3 percent per year.
Young adults, between the ages of 18 to 24, represent 40 percent of the total sales
of Starbucks. Starbucks is positioned as a place students can go out, study, writing
essays and meet people. Starbucks appeals to the consumer by the introduction of
the technology as soon as it is offered, focusing on social networking and actively
cultivate a "cool". The young adult growing by 4.6 percent each year.

COMPETITORS
Starbucks has several competitors in North-America these are Dunkin Donuts,
McDonalds, Tim Hortons Caf & Bake Shop, Dutch Bros and Coffee time. Currently
Starbucks biggest competitor is Dunkin Donuts.
DUNKIN DONUTS
Dunkin Donuts was not always a competitor of
Starbucks. In the early days Dunkin Donuts sold
mainly doughnuts in different kind of colours and
flavours. But since 2003 Dunkin Donuts
introduced the world to its coffee. Currently
Dunkin Donuts has 7,000 restaurants in the
United States and 4,000 restaurants in 33
countries whereas Starbucks has 11,000 in the
United States and 11,000 coffee shops in 65
countries. Dunkin Donuts market share is
approximately 24% and Starbucks market share
is 36% in the United States. Dunkin Donuts is a
threat for Starbucks because they offer cheap
1 Nithin Geereddy, September 2013
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coffee for a relatively good quality. However, the

stores of Dunkin Donuts do not offer the freshly
brewed coffee, genuine service and the inviting
atmosphere Starbucks offers.
MCDONALDS (MCCAFE)
Another competitor of Starbucks is McDonalds which considered as the worlds most
famous fast-food chain established in 1940 as a barbeque restaurant. In 2001
McDonalds opened the McCafe due to the increase in demand for coffeehouses.
McCafe sells coffee for a cheaper price, but Starbucks has better quality. The market
share in the coffee industry of McDonalds McCafe is at only 12.8 % in the United
States conversely Starbucks market share is 36%. Also the majority of people think
that McCafe can never have the image as coffeehouse because McDonalds is known
for its fast-food. McCafe is not considered as a big threat for Starbucks because it
does not serve fresh high-quality coffee. Moreover, McCafe does not offer the cosy
and warm atmosphere and is often used by people who want their coffee to go.

POSITIONING MAP
high quality
coffee

low price

high price

low quality
coffee

Figure 2.1 Positioning map concerning the

price and the quality of coffee of Starbucks
and competitors

appealing
environment

few
locations

many locations

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unappealing
environment

Figure 2.2 Positioning map concerning the

locations and the environment of Starbucks
and competitors

high quality of
food

wide
choice of
coffee

limited
choice of
coffee

low quality of food

Figure 2.3 Positioning map concerning the

choice of coffee and the quality of food of
Starbucks and competitors

As can be derived from figure 2.1, Starbucks has a distinct position within the
competitive market as they are about the only company which offers high quality
coffee with a relatively low price. Furthermore, from figure 2.2 we can derive that
Starbucks has many locations in North-America and an appealing environment in
their stores. Whereas Starbucks competitors are all below the middle line of the
positioning map, which means that they have an unappealing environment. Figure
2.3 shows that Starbucks has a wide choice of coffee in their stores and offer a high
quality of food such as pastry, sandwiches and salads. Dunkin Donuts does not
offer a wide choice of coffee in comparison with Starbucks, however the quality of
their pastry such as donuts are perceived as higher quality than McDonalds.

VALUE PROPOSITION
Starbucks provides a genuine service with a wide variety of roasted and richly
brewed coffees in an inviting and pleasant atmosphere.
Value proposition explained
Starbucks design their stores in such a way that has a nice, warm and an appealing
environment. Furthermore, their store layout is designed in a traditional, authentic
way using wood is the primary material. However, not only does the store design
create a warm and pleasant feeling, also the wide range and quality of their
products makes them distinctive from the rest. Starbucks successfully combines an
inviting and attractive store layout together with broad selection of richly brewed
fresh coffees. Their main competitors focus on low prices with a simple store layout,
meaning that they perceive cost is an important aspect to them which means that
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the quality will automatically be lower. Furthermore, Starbucks delivers an

experience by having a comfortable, warm and personal environment where people
feel at home.

CUSTOMER SEGMENT
People who visit Starbucks are generally men and woman between the ages of 1660 years. Both occupation and the level of education varies enormously meaning
that people from different backgrounds visit Starbucks. However this only applies to
the middle and upper class. As far as religion is concerned, the coffeehouse does
not conflict with any traditions.
Most of Starbucks coffeehouses are located in metropolitan areas and city centres.
The reason for that being is because many people live and work in those busy
areas. The people who have an active and social life are most likely to visit the
coffeehouses. Furthermore, people who have a busy working life also find the
convenience of Starbucks very appealing and therefore they probably make up the
largest part of their target market. The benefits that Starbucks offers is the
convenience of providing quickly prepared and freshly made coffee together with
other refreshments such as sandwiches. People find this very convenient when they
are on the go.
Because Starbucks serves a large market we are going to focus on business men
and women only. That is because they make up a large part of their target market.
As can be derived from the case most customers visit Starbucks before 2 p.m., the
most probable reason for that being is that both business men and women purchase
a cup of coffee before they get to work and during their lunch break. We believe
that the above mentioned customer group visits Starbucks on average twice a day,
five working days a week.

MARKETING MIX
PRODUCT
Serving the customer market
Starbucks core product is providing a wide range of the finest coffee for people who
enjoy the taste of high-quality coffee. We can divide the products of Starbucks into
two categories, drinks and food.
Drinks
Espresso beverages
Freshly brewed coffee
Starbucks refreshers beverages
Evolution fresh
Iced tea
Bottled drinks
Chocolate beverages
Frappuccino blended beverages
Kids drinks & others
Smoothies
Fizzo handcrafted Sodas
Tea
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Food

Iced coffee
Bakery
Starbucks petites
Bistro boxes
Evolution harvest
Hot breakfast
Sandwiches, Paninis & salads
Yoghurt and fruit

As you can see above, Starbucks offers a wide range of products that satisfy
different customer needs. In addition to these products, they also offer merchandise
in the store such as mugs and accessories, packaged goods, music, books and gifts.
The most important things for customers is that they enjoy the benefits of good
quality products along with a good service in a warm and pleasant environment.
Starbucks is also concerned with taking care of the environment and therefore they
have recyclable coffee cups and packaging which can be re-used.
Serving the business market
In addition to serving the customer market, Starbucks also focuses on providing
high-quality service to the business market. They do this in the following ways:
Foodservice
Starbucks office coffee (fully installed all-in coffee machines)
Licensed stores (retail stores have the option to sell products of Starbucks)
Starbucks card corporate sales (gift card for employees)
The above mentioned services have the aim to provide businesses and their staff
with the convenience of enjoying high-quality coffee whilst working.
PRICE
As a coffeehouse that is well-known in providing high quality coffee with a real
taste, customers are willing to pay a good price for what they get. This can be
regarded as value-based pricing as customers are prepared to pay a certain amount
of money for Starbuckss products based on the value they receive in return.
PLACE
Starbucks has over 20,000 coffeehouses in 65 countries which are frequently
located in the city centre. As mentioned before, Starbucks tries to locate their stores
in busy neighbourhoods and metropolitan areas. The intention of the company is to
have highly visible locations in the city centres. In addition, they focus on locations
for on the go customers, such as airports, train stations and subway areas.
The company mainly uses a direct distribution channel by reason of that they sell
their product directly to the consumer. They use this distribution channel when
selling their coffee and refreshments in the coffeehouses. However, if Starbucks
sells their bottled drinks or coffee beans to a retailer who sells it to the consumer,
they use an indirect distribution channel.
PROMOTION
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Starbucks is very active and successful with their promotion strategies. The main
reason for that is that they are focused on connecting with their customers on social
platforms such as Twitter, Facebook, Pinterest, G+, YouTube, and My Starbucks
Ideas. By being active on Social Media, Starbucks effectively makes use of a twoway communication model as customers can comment, like or share things related
to the company. By allowing customers to give their view, opinion or feedback on
Starbucks it can provoke conversations or dialog between them and the
coffeehouse chain.
The section below explains how Starbucks uses their social media to engage with
customers effectively.
Customer relationships
Being active online through social media enables Starbucks to build and reinforce
their customer relationships by engaging with them in conversations and by posting
regular updates about their business activities.
Cross-promotion
Starbucks also takes pictures of what they are doing and what they are working on.
It shares it on Instagram, posts it to Facebook, tweets it on Twitter, and pins it on
Pinterest. However, promotion also comes from customers of Starbucks as they post
pictures or text on Social Media sites tagging Starbucks in it.
Experience customization
Starbucks provides its unique experience through programs such as My Starbucks
Rewards, personalized drinks, and localized store experiences.
My Starbucks Ideas
The My Starbucks Idea website is a website where
Starbucks does its business crowdsourcing. The
website encourages customers to submit ideas for
better products, improving the customer experience,
and defining new community involvement. The
company regularly polls its customers for their
favourite products and has a leader board to track
which customers are the most active in submitting
ideas, comments, and poll participation.
PHYSICAL EVIDENCE
The atmosphere in every Starbucks is almost the same, they try to create a warm
and cosiness environment, which stimulates customers to go inside. When a
customer orders a coffee it will be freshly made, they can see the employees make
the order, smell the fresh coffee and hear the sound of the grinding of the beans.
Furthermore, customers can customize their order, for example decaf, low fat mil,
extra whip cream. Customers expect a clean and friendly environment in the
Starbucks coffeehouses all over the world.
PEOPLE

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Service is an important aspect in Starbucks value proposition. The employees of

the coffeehouse are trained to make coffee, to serve, to taste (because the staff has
to advise the customers). Furthermore, they get training for improving their
communication skills, as this is a crucial aspect of the service level of Starbucks.
They want to create a warm at home feeling, where everyone is happy to see you.
Starbucks supports the concept were not employees, were partners because we
passionately share common goals and mutual success
PROCESS
The process of a business refers to how they deliver their product or service. It is
the whole chain of activities that take place with the purpose of satisfying customer
needs. For Starbucks this begins at carefully selecting coffee bean farmers and
choosing a selected few who can produce high quality coffee beans. Once the
selected farms grow and produce coffee beans, the commodity is transported to a
large warehouse where it is stored. From there on specific quantities of coffee beans
are distributed and transported to Starbucks stores throughout the United States.
Once the coffee beans arrive in Starbucks stores it is ready to be grinded by
qualified staff who are equipped with the tools (coffee machines, grinders, mugs,
ovens etc.) to deliver high quality service.

MOOD BOARD
In the appendix 2 you can find the mood board we created for Starbucks, this is a
collection of inspirational elements when we think of Starbucks. We used different
photos, typography and patterns to describe the customers, image and the
products. In the mood board we included the warm and cozy atmosphere of the
stores and the customers who enjoy the freshly brewed and high-quality coffee of
Starbucks.

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3. Researching trends
MOBILE INTERNET
In order to enhance the Starbucks experience, the
coffeehouse chain might consider developing a
mobile app as a result of the ongoing trend of Mobile
Internet. These days, more and more people use their
mobiles to organize their personal lives. This means
that beyond the basic principles of using mobile
phones for communication, people also use it to
search for information regarding products and
services. Therefore, many businesses have developed
mobile applications, or simply apps for existing or
potential customers to make it easier for them to
purchase their products or to make use of their
services.
In response to mobile internet, Starbucks can considering to develop an app
whereby they provide their customers with standard information such as store
locations, rewards, and gifting options. This enables them to have a faster, more
efficient and more personalized coffee experience. Potential growth opportunities:
As an increasing number of people use their mobile to access products and/or
services, businesses such as Starbucks could attract more customers as they
make themselves more accessible and open thanks to their mobile app.
The brand awareness of Starbucks will be enhanced as more people have
easy access with mobile phones to their App. With a growing brand
awareness their brand value could increase which lead to a higher share price
Through the mobile app, Starbucks could be more effective with their
promotional activities as their customers could for example receive updates
on their phones regarding special offers.

ONLINE SHOPPING
Lately, there has been a decrease in traffic to malls and stores due to the fact that
consumers go online shopping instead. Therefore, less customers are coming in
contact with Starbucks. If the customers do not come to Starbucks, Starbucks can
come to the customers by delivering their beverages and food. In order to achieve
future growth potential we have three examples:
By delivering their products to consumers they can reach a new dimension in
the market. These consumers do not always have the luxury of time, this is
why it would be convenient if the delivery concept would be implemented
into Starbucks strategy.
This delivery concept will create a new business to business market for
Starbucks, this means that companies order in large quantities therefore it
will be profitable for Starbucks. Conversely, it would not be profitable to
deliver to the consumer market.
In order to achieve growth Starbucks will not charge the coffee if they do not
meet the delivery time or if the coffee does not meet the requirements. By
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doing so Starbucks maintains their high standard service which will enhance
the future growth potential.

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LOCALLY SOURCED PRODUCTS

Starbucks can use locally sourced products for their products

to get a strong relationship within the local community. By
being locally responsive the coffeehouses would form
partnerships with local chefs. This will create new
opportunities for these chefs in creating new beverages and
food items that reflect to the communitys preferences. Three
examples for increasing growth:
By using locally grown food for their products Starbucks will support the local
economy. For reason that their customers would become wealthier and in
turn they will have more money to spend.
By integrating itself into the local community, they will create an even
stronger relationship with their customers. Each location will be unique due to
the local sourced food which will give customers a reason to visit more often.
If Starbucks creates new products by using locally sourced food it will also
attract non-local consumers. This is because non-local consumers want to try
something different they cannot get at their local Starbucks.

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4. Selecting trends
LOCALLY SOURCED PRODUCTS
We selected the trend locally sourced products to further develop our new
innovation. As people are demanding companies to become more locally
responsive. They are also focusing more on supporting their local community then
focusing the global community. Using this trend will create more opportunities for
small business in the local area. Furthermore, Starbucks will develop an even better
relationship with their customers by creating a unique Starbucks in every location.

THE FLAWS OF THE OTHER TWO TRENDS

The trend Mobile Internet would be very successful to Starbucks because customers
wont have to wait in line anymore. The customers can already order their products
ahead and the coffee will be waiting to be picked up. This would create more brand
awareness and the company can their promotional effectivities would be more
effective through the app. However, using an order ahead function will not work in
this case of people visiting Starbucks after 2pm.
Currently, the online shopping trend is a good potential concept but there are a few
disadvantages for Starbucks. The problem of coffee is that it is a low-margin
business, so if Starbucks would deliver their products they will have extra costs due
to transportation and extra personnel. Furthermore, the segment Starbucks would
aim for is to narrow, this means that there might be insufficient demand for the
delivery concept. If the company would implement the delivery concept it would be
too risky and in the long term not profitable enough. In addition, using this trend will
not bring more customers in after 2pm.

TREND CANVAS
In de appendix 3 you can find the trend canvas we created for the innovations we
came up with for Starbucks. In the trend canvas we explained our target customers
that fit in the trend locally sourced food. The customer we want to reach for our new
innovation are customers of Starbucks are specifically the inhabitants of the
community who like to try new things and who like to support the local community.

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5. Ideation
In order to serve the customer as best as possible, it is important to get a good idea
of what he or she is like. Therefore, we came up with two customers, one male and
one female. They represent the main target customer of Starbucks. The
personalities, behaviour, hobbies of the two customers are described below.

BILL
Bill is a 28 year old financial advisor who lives in downtown Manhattan. He is single
and lives on his own in an apartment. As a person he is very down to earth a
peaceful living and independent guy. People see him as someone who is original,
funny, charming and an ambitious person. He usually wears a t-shirt with a pair of
jeans; just a normal, genuine and simple guy. Bill has a German Shepard, loves to
play baseball and regularly travels to the Caribbean Island for a holiday. He likes to
buy the newest gadgets for example iPhone 6, a 3D television and the PlayStation
4. Bills mood board is illustrated in appendix 4.

KATY
Katy is a 32 year old female who lives together with her four year
old son and cat in a small house outside of Boston. She dresses
formal with a blouse put in her skirt together with high heels. She
divorced two years after marriage and has full custody of her son.
From Monday to Friday she works as a kindergarten teacher at a
school in Boston. Katy does not travel much, in the summer she
travels to the east coast to visit her family. Close friends of Katy
would say that she is sensitive, patient, people-oriented, warm
hearted, conscientious and trustworthy. In her free time Katy likes
to draw and paint landscapes, read books and cook. Katy is an
environmentally conscious consumer and she spends her money on
toys and clothing for her son and local food to create homemade
dishes. Our mood board about Katy can be found in appendix 5.
Figure 5.1 COCD box

Yellow ideas

Blue ideas

Harvesting your own products

Red ideas

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Serving healthy and organic food

Serving seasonal food/beverages
Serving a local meal of the day
with a beverage
Sample tastings in stores
Serving locally produced
alcoholic drinks

Creating food and beverages

together with local chefs that
reflect to the communitys
preferences
Using locally produced products
to create an evenings menu in
the coffeehouses
Selling locally made merchandise

EXPLANATION OF THE COCD BOX

The COCD Box is a way to make a selection of the best ideas that we have as a
group. The COCD box is divided into three different frameworks. The blue frame is
about ideas that are not so special but easy to execute and shows results in the
short term. The ideas in the blue frame are easy to implement, there are low risks
involved, easy accepted and examples are already available.
The red frame is all about original innovative ideas. Those are breakthrough ideas
that will give something completely new to the customers and the market. The
ideas in the red frame are also be easy to implement. We came up with the three
ideas illustrated figure 5.1.
Yellow ideas are similar to the red ideas but the only difference is that the yellow
ideas cannot be realized. They are more challenging and are more focused towards
the future. However, we did manage to come up with one yellow idea. This is that
Starbucks starts to purchase and manage pieces of land to preliminary cultivate
locally produced fruits and vegetables. This will respond to the consumer need of
producing locally produced food that is managed sustainably. Furthermore, this will
strengthen the community bonding and boost the local economy.
The ideas that we have, all use local products. This
means that all ideas in the blue, red and yellow frames
are related to the trend that we have chosen. Local
Sourced Products.

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6. Value proposition
In chapter five we created a COCD box for Starbucks with the trend local sourced
products. We came up with three red ideas which are innovative, unique and
special. The one we chose to go for was the idea of locally produced food to create
an evenings menu in the coffeehouses. Currently, Starbucks only serves beverages
together with some sandwiches and pastries. By implementing our idea, Starbucks
would expand their menu with locally produced evening bites and drinks. This would
help the coffeehouse to keep the sales and profits flowing nearly around the clock.
The target customer for this idea would still be the same as in chapter five as it is
still focused on locally sourced products.

VALUE PROPOSITION
Starbucks provides a genuine service with a wide variety of locally produced
products that serves the needs of the environmentally conscious consumer.
Nowadays, consumers find it important to eat locally
produced food as it contributes to a more sustainable and
better community. Implementing this idea in Starbucks
strategy would be very profitable for them. The potential of
using locally sourced food will allow Starbucks to work
closely with the community and will make almost every
Starbucks unique. Starbucks competitor, Dunkin Donuts is
already providing an evenings menu in a few locations in
the United States. Nevertheless, Dunkin Donuts does not
make use of locally sourced products and does not tailor
their products to the regional preferences of the consumers
around the world.
The text below will further strengthen our value proposition as it explains about
Starbucks losing its appeal due to various factors and how our ideas addresses
those problems.
STARBUCKS EXPERIENCE LOSES ITS APPEAL
According the Starbucks chairman Howard Schultz, the Starbucks experience is not
as special as it used to be. He explains that the introduction of the automatic
espresso machines, with the aim of optimising the speed of service and efficiency,
overlooked the fact that it would remove much of the romance and theatre that was
in play with the use of the previous La Marzocca machines. Furthermore, the height
of the automatic espresso machines blocked the visual sight line the customer
previously had to watch the drink being made, and for the intimate experience with
the barista (a coffeehouse employee, who prepares and serves espresso-based
coffee drink)
STORE DESIGN
Design of their stores had taken on a more streamlined feel to gain efficiencies. But
that resulted in the stores losing their charm and uniqueness. Starbucks has stores
that no longer have the soul of the past and reflect a chain of stores vs. the warm
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feeling of a neighbourhood store. Some people even call their stores sterile, no
longer reflecting the passion Starbucks has about coffee.
Finally, Howard Schultz says that he and his managers should reflect on the
changes being made and realize that they should go back to the core. They should
go back to the traditional way of serving coffee and show the passion which makes
Starbucks a unique place to go. Furthermore, they should once again push for
innovation and do the things necessary to once again differentiate Starbucks from
all others.
RE-INTRODUCING THE STARBUCKS EXPERIENCE
It is clear that Starbucks has partly lost their uniqueness due to the changes being
made in replacing their coffee making machines and by streamlining their stores. By
implementing our idea of introducing locally sourced food, beverages and local
merchandise together with an original and traditional store layout, Starbucks will
regain their image as a unique and special place to go to. The automatic Espresso
machines will be replaced by the traditional La Marzocca machines so that
customers can see their baristas making their coffee. Furthermore, the store interior
will be changed in a way that reflects the local area and community. For example,
wallpapers with pictures of local farms/workers harvesting or cultivating land that is
used to produce coffee beans or other commodities that Starbucks uses in their
products. Another good example of making Starbucks a special place to go to is by
creating a food and beverages menu which includes local foods and drinks. By
offering customers a menu with local foods and beverages, it will enhance the
Starbucks experience as they can try out different combinations. For example,
customers can choose to eat a muffin using local ingredients (i.e. raspberries) with a
special flavoured cider that has been made in the area. Now, as Starbucks already
sells muffins but not ciders, they are not radically changing their business concept
when it comes to offering small bites with a drink on the go.

WHY OUR IDEA IS PROFITABLE AND EASY TO IMPLEMENT

Starbucks has a purchasing system in place which is a key component of effective
inventory management in that they monitor existing stock and determine what to
buy, how much to buy and when to buy it. Because they already have experience
with the entire acquisition process, they are able to purchase freshly produced local
products with the exact required quantities and within the time period they need it.
The only issue here is that local products will be added to existing range of
Starbuck's menu which can cause problems in terms of storing and displaying them.
However, this issue can be solved be either taking away products that hardly sell, or
to add extra capacity to their stores. Extra capacity can be added by remaking their
display counters so that it can store the additional local products to their existing
range of items that they are currently selling.
In terms of profitability of adding local products to their existing menu, it will
undoubtedly become a success as people who are environmentally conscious or
people who are willing to try something new, will buy locally produced products.
CENTRALISATION OR DECENTRALISATION
Every business needs to address where the decision-making power resides in the
organizational structure. Therefore, they can either choose a centralized structure
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or a decentralized structure. The differences between the two structures are

explained below.
When the main rule of authority rests with senior management at the centre of a
business, then it is a centralized structure. However, when the decision-making
process is being made and delegated further down the hierarchy and away from the
centre of a business than it is a decentralized structure.
In order to decide which structure is the best to use when Starbucks implements its
new concept of introducing locally sourced food, beverages and merchandise, the
pros and cons of each structure will be briefly explained.
In a centralised structure, it is fairly easy to implement common policies and
practices as decisions are being made by few managers at top levels of the
organisation. Also, it is easier to co-ordinate and control business related activities
and economics of scale and overhead savings are easier to achieve. However, there
are also significant drawbacks of a centralized structure. The first drawback is that
decisions are being made by top managers and therefore they may not fully address
regional or local business activities or issues. Secondly, if local store managers
identify areas of improvement that require changes in conducting business, then it
may take a long time before top manager approve to those changes.
As can be read above, a centralised structure is effective in some areas of business
(i.e. common policies and business practices) but in other areas such as addressing
local business issues it is not. As our idea is to introduce locally sourced foods and
products at local Starbucks stores, the best structure to adopt is a decentralised
structure. Although a decentralised structure may involve longer decision-making
processes and delegating among certain levels of management, it is more suitable
as it addresses local business issues or activities.

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7. Visualization
We created a mood board to visualize the idea we our for a new business concept
from chapter six. The mood board can be found in appendix 6. This mood board is
created around the idea of using locally produced products to create an evenings
menu in each Starbucks. We included pictures of the dishes and local food products
that will be used and served in each location around the world. However, each
Starbucks will be unique because they will use local products and recipes. We also
tried to create an impression of what the store layouts will look like when
implementing this idea by using some pictures of the inside of current Starbucks
locations. We also wanted to put emphasis on that Starbucks would contribute to a
more sustainable and better community. Moreover, serving locally produced
products serves the needs of the current environmentally conscious consumers. If
the company would implement Starbucks Evenings it would be very successful
because people are almost always willing to try something new.

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8. Conclusions and recommendations

CHAPTER 2 THE BRAND
Starbucks, a market leader in the coffeehouse chain industry established in 1971
with over 20.000 stores in 65 countries. Starbucks is known for its high quality
coffee that can be consumed in a pleasant environment which people refer to as
The Starbucks Experience. Starbucks is both active in the consumer market and in
the business market. The targeted audience are mostly men and women between
the ages of 25 to 40. Because of the high quality products, service and environment
that Starbucks offers, it is ranked as the number 1 in the coffee house chain
business. The biggest competitor of Starbucks is the Dunkin Donuts. Selling donuts
and cheap coffee for a relatively good quality is the recipe according to Dunkin
Donuts in order to beat Starbucks. Other competitors which are a smaller threat to
Starbucks are McDonalds, Tim Hortons, Dutch Bro, and Coffee Time.
CHAPTER 3 AND 4 RESEARCHING TRENDS AND SELECTING TRENDS
We as a group have to brainstorm 3 different kind of trends that we think it has a
potential to attract more customers after 2PM. The first one is the mobile internet
trend, the use of a customized Starbucks app would allow customers to find nearby
Starbucks stores, customize your own beverage and product discounts. The second
trend is online shopping, delivering coffee to its customers but it will be only
available for the B2B market since delivering to regular households would not be
profitable enough. The last trend is the use of local sourced food, the purpose of
using local sourced food is to enhance the relationship between Starbucks and the
local community. We think that this trend has the most potential to attract more
customers after 2PM. By applying this trend Starbuck is able to support the local
community, making each Starbucks unique because of the local products and
attracting more customers due each exclusiveness in every Starbucks store. The
flaws of the other trends is that we dont see that the concepts weve thought of are
plausible enough to gain more customers after 2PM. Also the demand for the Online
Shopping trend is insufficient which means that it would be too risky and not
profitable enough in the end.
CHAPTER 5 AND 6 IDEATION AND VALUE PROPOSITION
To get the idea from what the customers want we have to come up with two
ordinary persons that would be an example of the average Starbucks customer. We
also used the COCD Box which is a nicely way to get an overview and select the
best ideas that we have. All of the ideas are linked with the trend Local Sourced
Products. In the end we had to choose one idea and that is creating a menu that
uses locally produced food. Starbucks is able to get more customers around the
evening nights which will keep the profits and sales up. Each Starbucks would be
more unique because of the exclusive local food that it offers which will attract
curious customers that wants to try something different.
We suggest in order for Starbucks to attract more customers after 2 p.m. that they
will make use of the local sourced products trend by creating a menu using local
products. By doing that every Starbucks will be unique because of the local
products. This concept is also easy to implement because Starbucks is using a
purchasing system, this indicates that it easy to manage the inventory and decide
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how much to buy and when to buy. In order to highlight the local environment in
the Starbucks store we also recommend that a change in the interior would be
helpful. The change of interior in every Starbucks store will undergo minor changes
as we do not want to diminish the typical store design and brand image of
Starbucks. By implementing the local products and the interior change, we believe
that this will strengthen Starbucks focus to a more local community. The flow of
customers will be more consistent throughout the day which means more customers
in the afternoon and evening.

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Bibliography
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Appendices
1. PROJECT PLAN
Team Novelty
Jason Clarke, 2462915
Renan Fretes Pinto, 2437260
Estee ten Brink, 2448149
Diego Chang, 2481529
Patrick Mahoro, 233899
For this project we have chosen to develop a new business concept for the company
Starbucks.
The main reason why we chose Starbucks is because it is a challenging task where
we have to work as a team, combine our knowledge and skills in order to deliver a
comprehensive report of how to increase the flow of customers after 2 p.m. In
addition to the combined team effort we also want to develop our communication
skills together with critical thinking and problem-solving skills. Whilst developing
those skills during our project, we also aim to provide a tailored solution for
Starbucks in terms of advising them of how they can add a new product range or
change their store layout in order to attract more customers after 2 p.m.
Objectives for this project
Learning how to spot and use new trends that are relevant to Starbucks and
incorporating them into their marketing strategy
Learning how to segment markets in order to create a clear picture of what
kind of customers visit Starbucks and how their needs can be fully fulfilled
Learning how to bundle different ideas together and to derive one main idea
which can be used to develop a new business concept
Learning how to effectively use customer data bases in order to spot trends
and behavioural activities in order to respond to changing customer needs
Learning how to work together as a team, and learning how to deal with
cultural differences

Jason Clarke Chairman

Personal strengths
Planning and organizing is what I am good at because I believe
that preparation is key to success. In addition to planning and
organizing, I am a good presenter and that is partly because I
prepare my work well.
Weaknesses
Whenever I work in a team as a chairman, I tend to exert too
much control at times. That is because I want to gain good results
and therefore I keep a close eye on whats going on.

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Estee ten Brink Secretary

My strengths are that I am hardworking
and very enthusiastic to learn new
things. I also have good communication
skills and I work well under pressure. My
weaknesses are that I get easily
stressed and nervous.

Diego Chang Spokesperson

One of my strengths is that I'm capable of
adapting quick to new things. I also have a positive
attitude when things looks dark, I am also
cooperative and like to help other people out when
I am able to. One of the things that I am not so
good at, is that sometimes I spend too much time
thinking before doing the actual work.
Furthermore, I also have difficulty saying things
that are stuck in my head. Lastly, is that I am
incapable to say no.

Renan Fretes Pinto

Strengths
I believe that I am a creative person, always ready to
adapt and change according to the situation. I am
always trying to think critically to deal with my issues!
I think that I can easily apply my expertise and I am
really easy going, always up to help and cooperate!
Good interpersonal relationship complete my
strengths!
Weaknesses
I have problems with time, I need to work to be on
time! Sometimes I spend too much time with
irrelevant things, so I should focus more on what is
important! It is hard to listen no!

Patrick Mahoro
Strengths
I am honesty. Strengths are quick and self
learning with positive attitude, and self
motivation
Weaknesses
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My weakness is I am little bit tension when I am

not completed my work in time. Sometimes in
very rare casesbI spend too much time in
thinking before doing work
Team rules
Be on time
If you are late twice without a good reason, then you are out
Be prepared and active
Be cooperative
Project deliverables
Deliverable

When

Step 1 Project plan

Tuesday 2/12 13:35-15:15

Wednesday 3/12 9:00-11:00

Introduction
company
Objectives
Planning

Step 2 The Brand

Who

Wednesday 3/12 11:00-15:00

Part 1
Part 2

Step 3 Researching
trends

Step 4 Selecting
trends
Step 5 Ideation

Wednesday 10/12 13:0017:00

Wednesday 17/12 9:00-12:00

Brainstorming
session

Step 6 Value
proposition

Wednesday 17/12 12:0017:00

Explanation
number 1 red
position
Value proposition
of the idea

Step 7
Visualization

Friday 5/12
Estee, Renan
Jason, Patrick
Jason, Estee, Diego
Diego, Renan,
Patrick
Estee, Jason

Wednesday 10/12 9:00-13:00

Team meeting
1st trend
2nd trend
3rd trend

Deadline

Friday 5/12

Friday 12/12
Together
Renan, Diego
Estee, Patrick
Jason
Together

Together

Jason, Estee

Friday 12/12
Friday 19/12
Friday 19/12

Renan, Diego,
Patrick

Wednesday 7/01 9:00-14:00

Team meeting
Mood board 1
Mood board 2
Final mood board

Final report

Wednesday 7/01 14:00-17:00

Preparation for
defense

Thursday 8/01 9:00-13:00

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Together
Renan, Patrick,
Estee
Diego, Jason
Together
Together
Together and
individual

Friday 8/01

Thursday
8/01
Friday 9/01
33

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2. MOOD BOARD (CHAPTER 2)

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3. TREND CANVAS

Local food that is sustainably and

naturally produced without the need of
having to travel long distances to the
store which causes large amounts of
pollution. This is what consumers find
increasingly important as they value
sustainable farming on a local level.
Furthermore, they value good quality
and freshly produced food without any
preservatives.

People will slowly shift

away from massproduced food to locally
sourced food as its more
sustainable.

Through word-by-mouth,
local communities will
purchase more locally
produced food instead of
visiting the supermarket.

Restaurants, cafes and

supermarkets will
respond to this trend by
purchasing more locally
produced food as its
meets the changing
needs of the sustainably
conscious consumer.

Good quality, fresh and naturally

produced food in local areas that is
managed in a responsible and
sustainable way.
The days of mass-produced food are
slowly declining and the more selective
and environmentally conscious
consumers are buying more food that is
produced locally.

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Locally sourced products

The potential of using locally sourced food will allow

Starbucks to work closely with the community and will make
almost every Starbucks unique. By doing some research
beforehand, for example that Seattle is known for its
blueberries so the Starbucks located in Seattle could add the
blueberry on top of a muffin served with a hot cup of coffee.
While people are travelling for work, school or just simply
visiting a friend in another town, they are willing to try the
local food at Starbucks in that city. This is also a way to
attract more customers in the afternoon. Starbucks is known
for its coffee and we dont want to lose that image, for that
reason the local food will not be served in big portions.
Healthy and organic food
Furthermore the use of this trend could be applied in a lot of
Our
innovations
Seasonal
food/beverages
Starbucks coffee shops since
almost
every
city has their own

Our
Localinnovations
meals of the day with a

beverage
Sample tastings in stores
Locally produced alcoholic drinks
Creating food and beverages
together with local chefs that
reflect to the communitys

Consumers who find it

important to eat locally
produced food as it
contributes to a more
sustainable, stronger
and better community.
As people are becoming
more conscious about
howwhere
food isitproduced
and
comes from, they prefer to buy and consume
local food as they are assured that its of good, fresh quality.
Therefore, if Starbucks introduces locally sourced food, then
it will expand its customer group that is conscious about the
origins of their food and how sustainably its produced.

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4. MOOD BOARD, BILL

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5. MOOD BOARD, KATY

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6. MOOD BOARD (CHAPTER 7)

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