Starbucks Integrated Communication Plan
Overview
Starbucks Corporation was started in 1971. Currently, the entity has a chain of stores globally. The first corporation store was opened in Washington State in the United States. The coffee retailer has grown to more than 17,000 stores in over 50 nations across the globe. Starbucks extended into the Canadian Market in 1987, opening its first store in Vancouver, British Columbia. Presently, the company boasts of 940 locations across Canada. The business has stretched to offer more than 30 blends of coffee and several sorts of handcrafted drinks, products, fresh food, and consumer products. Starbucks Corporation is acknowledged as one of the leading corporations that offer quality products to its consumers, and for its effective corporate social responsibility and environmental conservation oriented entity.
The organization’s mission is inclined towards inspiring and nurturing the human spirit under one person, one cup and one neighborhood at a time (Starbucks Coffee Company). In the Canadian coffee market industry, Starbucks is among the leading providers of high-quality coffee. This common acuity is attributed to the company’s quality coffee, outstanding customer service, and hospitable in-store environment (Gavin, 2013: Simon, 2009).
Starbucks organization does not have an effective integrated marketing communications (IMC) plan, for instance, advertising (Ruzich, 2004). Nonetheless, it has several opportunities that enable it to interact with its existing and likely customers. The organization has an opportunity to expand to a more extensive consumer base with the “secret menu” that is acknowledged by the general population in addition to the introduction of benefits through the purchase of Starbucks’ products with the rewards program. Moreover, another significant element that needs to be addressed by the current organization’s administration is the brand image. Starbucks’ expansion in grocery stores has made it to lose its leading status and high quality image (Thompson & Arsel, 2004). The brand image of any organization is an important component that needs to be re-established frequently. The organization’s business plan is created in three main phases: direct marketing approaches, uphold the Rewards Program, and update and remind consumers about the organization’s brand with a campaign message of “Life is Better in Gold”, and “It’s not just coffee. It’s Starbucks.”
Observations
Starbucks organization is popular in many countries (Fortune, 2016). Canada has an average population of about 35,295,770 people, out of which 65% take coffee, with an average of 2.8 cups daily (Nowak & Jasionowski, 2015). In the majority of the Canadian homes, coffee consumption is common with most families taking it in their homes (Mintel, 2015). Nonetheless, despite the fact that coffee brewing is gradually becoming popular, cognizance and buying of cause-related coffee is growing among coffee drinkers. The consumption of coffee in the nation is projected to increase despite the fact that the overall growth is anticipated to somewhat decline in the next few years as a result of several factors. The first reason attributed to such decline is the waning of coffee pods at-home brewing systems and the likely decrease of home dining, which will impact the overall demand for coffee at the retail level. Therefore, to ensure that coffee shop chains remain competitive in the market, there should be an emphasis on the promotion of in-store incentives. The marketing environment of Starbucks is also becoming increasingly sensitive. Most consumers are progressively becoming aware of the Fair Trade practices, which has led to many organizations to embrace practices of virtuously traded coffee beans. A fairly merchandised coffee is a quality-produced product according to quantified standards (Starbucks Coffee Company). Several coffee brands are currently publicizing their ethical practices to consumers. Economically, the spending on coffee is determined by the amount of disposable income that is available to the consumers. With the increased rate of unemployment in Canada, many consumers in the nation are inclined towards the home brewing coffee instead of buying a single cup from a retail shop (Thompson & Arsel, 2004).
Furthermore, the coffee industry in Canada is also sensitive about the cost of coffee beans. This is because if the prices do not fit into the needs of the farmers, they may resort to a more profitable business. Therefore, an increase in the demand for coffee beans leads to the price change of the product. Socially, there are several inclinations in the Canadian coffee industry. Firstly, consumers are becoming more health-conscious. Generally, coffee is thought to be an unhealthy beverage (Caffeine). The perception has triggered many consumers to look for other healthier ways of supplementing energy and caffeine. Another social tendency involves cocooning, which is the growing aspiration to remain at home, mainly influenced by the growth of the Internet technology (Hampton, Sessions, Her, & Rainie, 2009). This emerging habit has increased home coffee consumption hence reducing the purchase of cups from retail shops. Many consumers are also inclining towards organizations that are environmentally responsible, which has triggered many firms to uphold ethical practices towards their consumers (Sheikh Sheikh, Mirza, Aftab, & Asghar, 2014). Technology has also enabled the organization to connect effectively with consumers mainly through social media (Percy, 2014). The internet has also made it easy for global consumers to access information (Kaplan & Haenlein, 2010). Moreover, through technology, consumers have been able to make purchases more effectively through debit and credit machines in addition to cell phone applications (Mayfield, 2008).
The coffee industry principally targets the population bracket of between 25 to 40 years. A secondary target market entails young adults that are between 18 to 24 years. The latter age bracket is mainly targeted through social media and in the institutions of learning (Dunlop, Freeman, & Jones, 2016). The major coffee consumer segment that is between 25 to 40 years is known to be environmentally mindful and socially responsible. Therefore, such population is likely to develop an interest in fair trade coffee as well as eco-friendly materials (Dragusanu, Giovannucci, & Nunn, 2014). Out of all the populations that take coffee, it is apparent that 25 to 35 years’ group is least likely to stock coffee at home, which explains why these consumes take coffee out of their houses. As the age of individuals progresses, so does their likelihood of consuming coffee at home.
The main competitors of the Canadian coffee industry are Tim Hortons, Second Cup, and at-home brewing systems. The competitors are in the form of grocery stores and retailers that offer packaged coffee. In terms of pricing, Tim Hortons offers coffer products lower than Starbucks, besides having several menu options. Tim Hortons is among the leading Canadian coffee store that has been in existence since 1964 (Emerson, 2016). The chain store is known for its quality operations in the coffee industry and is acknowledged to serve coffee consumers who appreciate coffee at lower prices. The organization is also dedicated to community engagement and environmental sustainability. Tim Hortons sells fair trade coffee through the cup and by the can. It is also active on social media despite the fact that it does not have regular adverts. Another competitor organization is Second Cup, which is a Canadian organization that is “Canada’s largest specialty coffee franchisor” that offers its consumers different specialty drinks in its tranquil in-store atmosphere. Second Cup products are served at a medium price point and it offers fair trade sales. The organization also takes part in several environmental conservation projects despite the fact that they are not as much exposed as Starbucks’ or Tim Hortons. Presently, the organization does not make use of any advertising mediums as a way of communicating its promotional offerings to consumers (Haskova, 2015). Other competitors in the market include at-home brewing and simple coffee makers.
Starbucks prices are higher than its competitors’. The proposed Integrated Market Communication (IMC) plan will make the company more visible to consumers, appeal to new rewards program members, grow and uphold the loyalty of existing customers, and it will remind consumers about its benefits. Nonetheless, the major hindrance I experienced while discussing with the organization’s leaders was lack of awareness. Though the majority of Starbucks leaders understand the importance of public relations professional, they use social media through the management of a separate entity. Despite the fact that this action appeared to be a simple process and perhaps rewarding at that time, an alternative approach would have been more efficient. I noted that the organization has few social media accounts with limited activities.
Therefore, Starbucks need to implement the integrated marketing plan proposed. The organization does not need to alter its target market or modify its promotions. Nonetheless, the competitive strategy and positioning must be reviewed. Starbucks needs to employ experts in its publicity efforts. The professionals would inform the consumers about the benefits of being a devoted organization’s consumer. I would also recommend that Starbucks do more than the social media campaigns as a way of effectively connecting with its existing and potential customers. The organization needs to incorporate the inclinations of its competitors in the industry.
Objectives
To enhance Starbucks’ competition in the Canadian coffee industry, its marketing communications needs to be improved. The communication plan encompasses four main marketing objectives that are aimed at addressing the difficulties the organization is presently encountering. The main objective of the IMC plan is to increase Starbucks’ presence in the Canadian coffee market. As a way of attaining this goal, it is significant that the objectives emphasize on getting a bigger market share besides enhancing consumer loyalty among likely and current Starbucks’ customers. The major goal that needs to be attained to achieve this objective is reviewing the organization’s admired brand image. The supposed preeminence of the coffee organization brand is a significant competitive advantage in the market. Firstly, there is a need to grow the number of Starbucks consumers because not the whole nation’s population buys coffee products. Therefore, the consumer base needs to be expanded, an achievement that can be attained in one year through the promotion of the organization’s brand. According to Kotler and Keller (2006), the organization’s branding is essential for its success because it enhances customer loyalty.
Starbucks’ Rewards Program
According to Magatef et al. (2015), advancements in loyalty card programs are significant in organization growth. Many consumers shop deliberately as a way of accruing points. Because loyalty is important to the Canadian customers, another objective will be to expand membership instigations in line with the Starbucks’ Rewards Program and practice by prevailing members. The objective is attaining 20% growth of membership galvanizations as well as increasing the prevailing user membership through execution of a new Black Card.
Starbucks black card
As a way of ensuring the dominance of the organization’s brand, it is important to enhance consumer awareness of the benefits that Starbucks provide, for instance, the secret menu of modified handcrafted drinks and periodic marketing offers. Furthermore, because the organization is professed as having less menu options as compared to the competitor firms, for instance, Tim Hortons, such campaigns will inform consumers about the menu choices that they can access. The communication plan also hopes to increase consumer loyalty, which is anticipated to expand the sales revenue. With the aim of re-establishing a consistent, unfailing, and strong brand image for the organization, it is essential to convey a strong message, which is another objective of the communication plan. This projected IMC plan will uphold the organization’s present slogan – “It’s not just coffee. It’s Starbucks.” This approach supports the major goal of the IMC plan, which is to re-establish the standing and preeminence for the brand image of Starbucks.
Promotional Approaches
The promotional approaches entailed in this IMC plan will continue to target the organization’s existing demographic dissection as well as the psychographic segmentation. The target market will comprise both male and females ranging from young to middle aged experts. The marketing communications will emphasize on directing to the populations between the ages of 18 and 50 years because they presently reflect the majority of the organization’s sales. Therefore, the communication plan will target the employed customers that get a minimum income that is below the median household income. These consumers mainly use outlets, for instance, in their way of living. In the plan, a psychographic segmentation will be applied to emphasize on the consumer insolences professed as living a high-status lifestyle. These are working populations who take a cup of coffee every morning. Furthermore, the notion of attaining a high-level status is significant to them since they are more likely to be incorporated in the loyalty programs by other companies like Air Canada. In general, we shall apply the profile matching approach in the print media promotional endorse that aligns with segmentation and promotion communication tools. The plan will position promotions through the slogan “It’s not just coffee, it’s Starbucks”. As initially stated, this catchphrase signifies the loftier quality and exclusive level of the organization’s products besides the experience that is offered. Additionally, the plan will be changing the existing competitive strategy being applied by the organization. The organization needs to stop centering on social responsibility creativities and emphasize on its customers and the way the buying will profit them. As the organization re-reviews its apparent status of its brand, it will set to achieve the marketing objectives mentioned in the plan.
Target Audience
The target audience incorporated in the communication plan will be the identical as the target market despite the fact that the promotions will emphasize more on likely and prevailing affiliates of the Starbucks Rewards Program. The target audience will enable us to focus keenly on growing and upholding consumer loyalty. This approach will align with the set goals and objectives in enhancing the loyalty of possible and existing organization’s consumers.
General Communication Objectives
In the communication plan, three main communications objectives have been pointed out. They include an emphasis on direct marketing instead of mass marketing to induce consumers to join the Starbucks Rewards Program and inform customers about the benefits that the organization offers. Firstly, direct marketing will be significant in ensuring that the organization conveys marketing communications concerning its offerings and products directly to the customers. Direct marketing will guarantee an emphasis on customers, information, and responsibility with quantifiable outcomes to enhance efficacy that will assist the entity in targeting explicit audience. The organization is perceived as a first-class brand in addition to the prominent image, which will be diluted through mass marketing communications, for example, adverts on automobiles and subways. Promotion through channels, for instance, magazines would be significant for the organizations to target their consumers without dropping their classy image affiliated with the brand. Furthermore, direct mail can also be applied explicitly to target prevailing rewards members. This channel will be used to offer present rewards members with devotion enticements, for example, vouchers and data on advertising offerings. Direct mail is more operational as compared to email since emails are likely to be ignored and at times are inevitably sent to junk mail folder.
The company will use magazine adverts, direct mailing, and the black card launch party. The Black Card will be propelled towards the end of the anticipated IMC plan after the marketing of rewards as well as other marketing channels formerly as deliberated. As a way of endorsing the preliminary introduction of the Black Card, launch festivities will take place in the major Canadian metropolises that is Vancouver, Toronto, Montreal, and Calgary. These capitals have been selected as the host cities due to their large population. This social occasion is solely for rewards members who concur with the general marketing goal of recapturing the organization’s prominent image and retaining allegiance. The introduction of the Black Card entails a form of transforming and placing the organization as a high-status brand in the thoughts of consumers.
Planning
Activity Schedule
Activity Schedule for the year.
Proposed Budget
The approximated expenses for Starbucks’ IMC plan are $5,556,960. The huge amount of the budget is allotted to magazine promotion. The advert will be in leading magazines. The whole magazine commercials are 1,646,960 of the promotion budget. The organization’s inventive team will design the promotion campaign and advertising material for the magazine advertisements as well as the direct mail coupons to ensure that there will be no added costs for subcontracting. The price for the mailing depends on Canada’s business rates. The Black Card events cost of venues depends on the Toronto venue alongside the person capacity, which will be equal in all metropolises. Invites will be dispatched through Canada Posts. Each member will get one unrestricted organization’s drink on arrival to the occasion. Several baristas will take part in the locations working in shifts. Advertising materials for the event are projected to cost approximately $ 400 in one location. The total cost for the unveiling of the Black Card is $123,000.
Measurement
The IMC plan is efficient since it has incorporated the opportunities as well as the weaknesses of the organization and its brand. Even though Starbucks is a prestigious brand, it is not famous in Canada. Therefore, the main objective of the plan to publicize the company and its products. The main approach that will be used in the evaluation of the proposed IMC plan will be attained through observing the number of registered Starbucks’ rewards cards shadowed by the quantity of new rewards program member beginnings. A growth in the number of registered members will expand devotion among the consumers, which will fundamentally escalate our sales. This approach can be monitored through the volume Direct Mail exchanges in the registration process of the rewards member. Moreover, assessing sales is also another way of measuring the success of the marketing communications plan through checking likely upsurges during periodic offerings as compared to when none is offered. Furthermore, continuation reviews through e-mail will be dispersed to new rewards members to investigate how they received information about the rewards program. This process will verify the success of the company’s publicity efforts. After the Black Card has been propelled, that is after a year, the organization needs to observe the amount of Black Cards attained by consumers. The organization also needs to assess an increase in gold card members after new membership initiations have been accomplished. Furthermore, each store must provide scheduled feedback on the “Secret Menu” accomplishment or failure with customers. It will be important to acknowledge if the consumers have been questioning the secret menu. Once the black card has been flung and consumer devotion has improved alongside campaigns for the Starbucks Rewards Card, Starbucks should consider a co-branding prospect with a brand, for instance, Air Canada, which has an identical target market and consumer loyalty program.
Supplements
Press Release/Media Posts
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| It’s Not Just Coffee its Starbucks |
| LIFE IS BETTER IN GOLD. ASK US ABOUT OUR REWARDS PROGRAM AT A STORE NEAR YOU
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