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Starbucks

Attn: Marketing Manager

From: Eldar Idrisov, marketing assistant

Date: 11/24/2011

Subject: Report on how Starbucks responds to changing market conditions, and as Caffe Nero can learn from the initiatives of Starbucks.

Introduction

Starbucks stay innovative and have the opportunity to stand out and be different from the competition.
Innovation and being different are their features and a key factor as to why they have such a strong brand and position in the global market. Resent years, and the economic downturn had an impact on the industry, including Starbucks, but Starbucks could turn it around and are now seeing growth in sales again. The next report will provide an understanding of the memorandum as Starbucks are now innovative in response to changing market conditions, and we are in Caffe Nero, can use these initiatives to strengthen our own brand and secure our market share. Research conducted for the Report is based on interviews from the news of the week with Starbucks CEO Howard Schultz, the ABC news coverage introducing instant coffee Via and the article BusinessWeek "For Instant-introduction of Starbucks coffee," Susan Berfield.

Progress Starbucks

Facts

With 11.000 stores worldwide Starbucks is the largest distributor of coffee in the world. Also, with an aggressive strategy in China, the largest consumer market in the world, Starbucks impose itself as the number one seller of coffee in the world.

Innovation is the key

Global supply chain realized that he needed to stand out, provide an excellent product and simply give their customers an experience that they cannot find anywhere else. For this reason, we in Caffe Nero should turn to them for inspiration. One of the main reasons for the success of the company as their distinguishing feature, namely, innovation.

Reduced Sales

Over the past couple of years, despite its ability to innovate, affected by the economic downturn. In addition, stiff competition from cheap companies such as McDonald's and Dunkin 'Donuts for the first time to have slowed sales. As a reaction to a Starbucks Howard Schultz returned as CEO in 2008 and the return of Schultz, "The company is now turning it around. Solid sales growth improved during the last month, which is mainly due to a number of new initiatives.

The last resolution

Clover coffee machine

This is a new invention, which only come on the market for advanced manual coffee individually brewed cups of coffee, which takes all the customer needs into account. Here the user can prepare a well-known Starbucks coffee in the comfort of your own home.

Through Ready Brew (instant coffee)

This is the biggest gamble the company took on the forum. With the introduction of Via, the new instant coffee on September 20, 2009 Schultz is trying to get some instant coffee market share of 20 billion industry dominated by companies Nestlé. This response is not only recession, but most of all to changing market conditions. If Schultz successfully in changing attitudes of American consumers especially in instant coffee there is a huge market share to be won here for Starbucks.

Lower prices

The initiative comes at a very opportune time. Downturn in the economy has made people aware of how they spend their money, which then led to people not wanting to spend $ 4 or $ 5 for a cup of coffee. Starbucks has identified this new trend of consumption and the success of their new product depends on whether the consumer will adopt a new coffee and pay a little more than offer Nestle. Starbucks, three single-serve packets over will be sold for $ 2.95 while
Nestle is a little less than $ 2.

Conclusion

Studies show some interesting trends in the coffee industry, and certainly we can get some inspiration from Nero. Starbucks has identified a new trend of consumers and tries to re-launch of instant coffee, that we should be careful to. If they are successful, which I, from my research I think they will, we have our own brand of instant coffee Nero on the market as soon as possible.

At Starbucks, the coffee market in line, I think that trend will change quickly. We will have the opportunity to gain market share, as well as the fact that our brand is a brand like Starbucks. We need our troops $ 20 billion industry. In addition, the report states that the fact that it has become for Starbucks is their awareness of the economic downturn, and thus people spending habits. New products that would cost less so in accordance with the recession time, we are now and will also provide us with new market shares.

Recommendations

In light of the above, I recommend that we start developing our own brand of instant coffee, to get market share. It is important that we do not hurry with this project, how bad product can damage our strong brand. Starbucks has spent two years developing its instant coffee, and because they know that a bad product can cause damage to their name, and thus overshadow all the good products in the store already. Our new product development, we must be patient and make it a project with a long period of time. Another initiative, which can be realized immediately that we are following the initiative of the Starbucks "on lowering prices on certain items. Starbucks is most definitely on something here, and they have identified a new trend of the consumer. In order to meet customer requirements we are simply creating more available items in our existing stores and to combine it with marketing and commercial strategy focused on high quality products at affordable prices. This will attract more customers, because people are more aware of what they spend their money in these days.

Action plan

. Monitor Starbucks Via Ready Brew introduction closely to determine whether it proves a success or not.
. Start developing our own brand of instant coffee, as long-term project.
. Discuss whether our soluble coffee should be entered under a different name than Caffe Nero.
. The lower our prices on our "luxury coffee", such as Frappelatte, ristretto and espresso
. Create a new marketing material, with an emphasis on high quality at low prices