Mkt. 301 Team, Travis, “Starbucks Has Big Plans to Diversify Beyond Coffee,” in “forbes.com,” 09.05.2013
I. Introduction 1. This article published in the online version of the Forbes magazine describes Starbucks’ plan to diversify its products in order to offer more than just coffee stores. While opening up new stores worldwide, the giant corporation expresses its concern for diversification on the American motherland. Therefore, Starbucks announces it will soon introduce three new snack bars, twelve new juices (both for their Evolution brand), greatly expand its Teavana tea selection, increase its food menu options after having recently bought the bakery chain “La Boulange” and lastly, partner with the giant Danone to offer low fat yoghurt in its stores. 2. Market penetration= making more sales to current markets without changing its original products (“Principles of Marketing, Ch. 2, page 47) Product development= offering modified or new products for current markets (“Principles of Marketing, Ch. 2, page 48) Diversification= company growth through starting up or acquiring businesses outside the company’s current products and markets (“Principles of Marketing, Ch. 2, page 48) Value delivery network= the network made up of the company, its suppliers, and, ultimately, its customers who partner with each other to improve the performance of the entire system (“Principles of Marketing, Ch. 2, page 50) Positioning= arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer (“Principles of Marketing, Ch. 2, page 53) 3. Starbucks has established itself as a global corporation, but it still keeps a close focus on market penetration by planning to double its international footprint. Therefore, the company wishes to make more sales to original customers without modifying its product, but through opening up new stores in those already established markets (“Principles of Marketing, Ch. 2, page 47). Starbucks is also highly focused on its company growth through product development by offering modified products such as the Evolution snack bars and fresh juices, which will provide a healthier choice for its customers than the current Naked Juice by Pepsi and the Kind snack bars available in stores (“Principles of Marketing, Ch. 2, page 48). When it comes to diversification, it is worth mentioning that Starbucks has bought the $620 million tea company Teavana and plans to be, in the near future, as successful with its tea offerings as with its coffee products (“Principles of Marketing, Ch. 2, page 48). In order to add value to its value delivery network and more importantly to the actual consumer, Starbucks has recently partnered up with the well know French yoghurt company Danone, making it harder for other competing coffee stores that offer a less popular type of yoghurt (“Principles of Marketing, Ch. 2, page 50). Considering market positioning, Starbucks affirms that it has paid a special attention to positioning its new Evolution healthy snack bars and juices by choosing Whole Foods as a supplier and therefore offering the idea of fresh and natural, as opposed to junk or processed (“Principles of Marketing, Ch. 2, page 53).
II. Marketing Environment Environmental forces are “Not Discussed in the Article,” but I believe the effect of some of them can be deducted from the company’s decisions. Therefore, the fact that Starbucks has decided to provide new healthy products has been mainly caused by the current social forces that embody the need for healthy, natural and sustainable choices and products. Furthermore, the economic forces in play have formed the Starbucks’ customer population as one that can afford to spend a little extra on high end products, which therefore allows Starbucks to price its new products in accordance to its perception of high quality