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Starbucks and Second Cup Brand Deconstruction Report


Brand Analysis for Starbucks

Objectives, strategy, and plans

The objectives, strategy and plans of Starbucks are geared towards improving and popularizing the brand identity of the company. Hence, the company is keen towards popularizing its brand by enhancing a firm expression across the board especially in view of other competitors in the market. This implies that brand expression plays a major role in marketing the company.

Some of the key tenets valued in the brand expression include the name of the company, the color, shape and pattern of its logo, typography, icons/symbols and its worldmark (Zmuda 3). In other words, it is crucial to mention that the brand name of this company is a major area of marketing that cannot be ignored at all.

Unique positioning

The company was incepted way back in 1971. After operating for close to two decades, it was made a public limited company in 1992. By the year 2002, the company was operating close to 6000 stores across the globe. This number has since gone up remarkably.

Its sales growth was stable throughout the years before the 2007 recession began. Although the identity of the company remained strong, profitability went down slightly below the projected margins. So far, expansion has been witnessed in the service and product sectors. As it stands now, one of the key objectives of Starbucks is to maintain a high standard in the quality of processed coffee.

This objective has been attained progressively over the years. Another objective has been to develop a wide variety of customizable drinks and increase product differentiation in order to meet the various tastes and preferences of customers.

The past, present and future

One of the strategies that the company has used to maintain coffee standards is through direct control of its supply chain. The white collar people, the educated individuals and those are affluent in society have among the main targets of Starbucks.

In terms to product positioning, the image of the company has so far changed into ‘a convenient place.’ It is readily positioned for growth due to its large class of the targeted market. The above mentioned target groups have supported the growth of the company over the years.

Second, customizing drinks is yet another growth factor because the varying tastes and preferences of customers can be met almost instantly. It is also crucial to mention that the customer base targeted by Starbucks has been widened to comprise those who are less educated and less affluent in society.

At this point, it is vital to vividly lay out where Starbucks has been, where Starbucks is currently, and where they plan to go. To begin with, the brand was transformed into a public entity in 1992 when customer base was still very low. The number of stores were also concentrated in north America. In fact, there were only about 140 stores in the United States of America.

The whole bean coffee was the main source of revenue way back in 1992. However, a need arose after the company went public and as a result, product variety was gradually introduced into the market (Anita 21).

SWOT analysis

The most updated SWOT analysis of Starbucks is described below:

Strengths

  • Effective management of employees and the entire workforce
  • The most established coffee chain across the globe
  • Remarkable customer experience
  • A leading brand in coffeehouse
  • The financial record of the company is sound

Weaknesses

  • It has a negative publicity
  • Product pricing may not suit certain segments of society
  • The profitability of the company largely relies on the price of coffee beans

Opportunities

  • A vast opportunity to expand retail operations
  • Ability to extend product offerings
  • Emerging economies are rapidly expanding and increasing investment opportunities
  • Extending supplier range is possible

Threats

  • Supply disruptions may affect profitability of the firm
  • The developed economies already present saturated markets
  • Stiff market competition from both local and global supplies of coffee products
  • Trademark infringements
  • The ever-rising prices of raw materials such as coffee beans.

Starbucks’ Media Plan

In order to remain relevant and marketable as a viable coffeehouse in the world, Starbucks has developed several marketing campaigns through various media channels. Starbucks Iced Coffee is one of the best-marketed products in the media. It is marketed as a cold coffee drink that is refreshing. Customers are promised that this product from Starbucks is of high quality and sweet to taste.

The product was launched in north America in 2006. The varying tastes and preferences of customers were also met by producing different categories of the product. Although it is made from Italian roast coffee, different types of flavours were availed to the market. These included the regular and light varieties.

Media activities of Starbucks has also been witnessed via the North American Coffee Partnership. During the mid-1990s, bottled Starbucks Frappuccino was developed and intensively marketed. In 2002, Starbucks DoubleShot espresso was also heavily marketed though the above outlet.

The company is also attempting to launch a media company so that it can be ain a position to exclusively market its coffee brands. Besides, the company has taken social media marketing by storm. Its presence in social media definitely targets the educated segment of society as well as those who are more affluent.

Starbucks has remained to be a more engaging company in the online media marketing. It first created its Facebook page way back in 2008. By 2011, it had already hit a total of 20,000 fans. Currently, the fan page has 35 million likes. Through the Facebook page, the company advertises its products.

Recommendations for Starbucks

The international segment offers Starbucks the biggest growth platform. Other opportunity areas include the growing middle class population and the strong. Hence, it is highly recommended for the firm to open up new stores in the emerging economies so that new line of targeted customers can be reached. The management teams should be given the liberty to manage the firm based on their individual creativities and innovation.

Besides, price points and local product mix should be introduced. These will enable the company to meet the varying degree of tastes and preferences. The core competences and capabilities should be transferred in the international operations of Starbucks (York 12).

This will enable several areas of operations to build profit drivers. Additional healthy product offerings should be included in Starbuck’s menu instead of relying on snacks and other junk products. Finally, Starbucks should work towards mitigating price volatility of raw coffee beans (Morrison par. 12). An effective hedging tactic can be implemented by the company.

For example, the estimated input of quantities can be locked or made rigid by developing and adopting future contracts so that suppliers of raw coffee beans do not increase the pricing at will.

Brand Analysis for Second Cup

Objectives, strategy, and plans

An exclusively unique coffee experience is the main operating concept of Second Cup. Several meetings are held over a cup of coffee in most Second Cup’s stores bearing in mind that they are well furnished. In 2014, the company announced a new strategic plan and objectives that were to drive the company for three successive years (Shaw par. 9).

The growth plans and strategies provided the much-needed roadmap for transforming the growth of the company. Both innovation and top-notch quality are enshrined in the vision of the firm. To begin with, share offering was identified as one of the most profound ways of supporting the set objectives and growth plans.

Raising additional fund through various means has enabled the company to expand and improve the quality of its production. By strengthening the firm’s balance sheet, it will be possible to advance and retain its market strength. In addition, the surplus funding sources have enabled the firm to improve the overall status of outlets located in prime spots.

The desire to reinvent the brand has been a major area of operational concern over the years. Every touchpoint has been reflected in the collaboration, creativity and superior quality products offered by Second Cup. The firm has also set the right stage to be an authority in the coffee industry. A passionate café experience is also another key area that Second Cup has been focussing upon over the last few decades.

If café experience can be delivered in the most effective manner, then the company can be well positioned to tap the potential of the coffee market industry. finally, close and efficient collaboration between the company and other world class partners has been a crucial area of operation to boost both local and international investment. Groundwork for growth has been established and fast-racked for about one year.

In this paper, Second Cup’s brand will be assessed through various parameters such as product offerings, differentiation, the ability to engage the targeted markets in north America and overall profitability margin. For instance, are the brand name and logo appropriate in marketing the firm? What about trademark and brand equity?

From the outset, it is evident that the brand personality of Second Cup requires some reinvention as will be discussed in the recommendations section.

Unique positioning

Second Cup was founded in 1975. Since then, it has dominated the north American market besides expanding to other territorial markets across the world. As a Canadian speciality supplier of coffee in small quantities, Second Cup has managed to train its coffee experts. The coffee firm is indeed committed to ensuring that it offers the best coffee experience to both active and prospective customers.

Although Second Cup’s products are considered to be equally enjoyed by customers in the north American market, it is vital to mention that it still lags behind its key market competitors. This implies that the brand image is not adequately positioned to lure more customers.

The pricing factor is a major drawback in the market positioning of the company. However, even if the price of Second Cup’s coffee is above those of the rivals, its products are generally of superior quality. Therefore, it is better positioned to be loved by customers who prefer quality to price or the element of cost.

Past, present and future

Long-term commitment to sustainability is evidently non-existent at Second Cup. If the firm cannot leverage on the latter, it will continue to miss out on its market positioning to other rivals such as Starbucks. The positioning statement adopted by the company can indeed yield the expected returns if sustainability methods are revamped and fast-tracked.

The firm desires to be a company that cares as far as coffee offerings is concerned. The corporate giants in the industry are less passionate about their offerings and therefore, Second Cup coffee firm can still leverage on its positioning statement.

This requires the company to constantly meet its marketing objectives (both short and long term). The coffee firm plans to set several unique selling points as part and parcel of the transformational plan to advance the growth agenda (Stantford par. 6).

It can be recalled that out of the $2 billion retail coffee market in North America, Second Cup managed to capture only 0.6 percent of this market share in 2013. The third party certifications are presumably the main cause for the high price of coffee processed by Second Cup.

The company has expanded its market to include the United States and other international subsidiaries. The expansion plan is still underway for the company in order to gain a sensible share of the available market.

SWOT analysis

Strengths

  • Its staff members are well knowledgeable. Hence, customer experience is up to the required mark.
  • Good tasting products and quality.
  • The supply chain in place has been credibly established.
  • Service provision is customer-oriented.
  • Expansion to international markets.
  • A well established and known brand in Canada.

Weaknesses

  • Missing product innovation
  • Existence of middlemen increase the cost of products
  • Some stores are outdated
  • Store experience for customers lacks consistency
  • An old and outdated logo
  • There is no clear target market
  • Most Canadians are not familiar with current branding of the company (Gorges par. 3)

Opportunities

  • Consumption is on the increase. Hence, more consumers are expected in the future.
  • The young age is rapidly embracing the speciality coffee. This is bound to expand the target market.
  • Ability to leverage on current health trend by developing products that are nutritious.
  • Introducing ultra-premium price regimes for products that are considered to be upscale.

Threats

  • Barriers to entry in new markets
  • The ever-rising price of coffee
  • The dropping price of pods
  • Competition from other corporate giants in the coffee industry

Second Cups’ Media Plan

One of the recent media plans of Second Cup coffee company has been the launching of a mobile app through which customers can gain a better experience of coffee. By using this app, customer earn points which they can later redeem in exchange for special offers and discounts. This initiative is aimed at revolutionising the brand to the next level of competition. S

econd Cup also markets itself through social media outlets such as Facebook and twitter (Strauss par. 3). The main products being offered by the company are displayed alongside their benefits. Customers can also ask questions directly regarding their concerns.

Other modes used by the firm to advertise its products include online media channels such as Youtube and search engines. It also promotes itself through the company’s website at secondcup.com.

Recommendations

First, the company should change its logo that apparently appears out-dated. There is urgent to embrace innovation at the company in order to outwit market competition (Banerjee par. 10). The number of intermediaries should be reduced so that its offerings can be afforded by all segments of the population.

It is equally crucial to develop a target for a particular market instead of focusing on ‘everyone’. The out-dated stores should be revamped besides enacting viable marketing strategies that can improve the publicity of the current brand.

Works Cited

Anita, Chang Beattie. “Can Starbucks make China Love Joe?” Advertising Age 83.40 (2012): 20-21. Print.

Banerjee, Sidhartha. . 2007. Web.

Gorges, Mary. . 2014. Web.

Morrison, Maureen. “Starbucks Ad Blitz Positions Triple-Duty Coffeemaker as Singular Sensation.” Advertising Age 83.36 (2012): 6. Print.

Shaw, Hollie. . Financial Post. 2014. Web.

Stantford, Jim. . The Globe and Mail. 2014. Web.

Strauss, Marina. Second Cup tweaks blend with new president, menu. 2008. Web.

York, Emily Bryson. “Starbucks CMO: McD’s Java Push Will Work In Our Favor.” Advertising Age 80.21 (2009): 12. Print.

Zmuda, Natalie. “Starbucks Adds a Few Doses of Flavor to Perk Up its Packaged- Coffee Sales.” Advertising Age 81.33 (2010): 3. Print.

Appendices

Appendix 1: Distribution of Starbucks shops globally

Distribution of Starbucks shops globally

Appendix 2: Сonsumer price level in most emerging economies

Сonsumer price level in most emerging economies

Appendix 3: Starbucks’s product portfolio

Type Description
Coffee fresh-brewed coffee
§ more than 30 coffee blends available
§ both – hot or cold options for any coffee beverage
§ customized milk options – regular, skinny, non-fat or
soya milk available on consumer’s request
§ possible to add different flavored syrups, such as vanilla,
hazelnut, caramel and other (for additional fee)
Other handcraft beverages Starbucks Frappuccino coffee
§ Non-coffee blended beverages
§ Smoothies
§ Tazo teas
Ready-to-drink beverages Starbucks bottled Frappuccino coffee drinks
§ Starbucks Discoveries chilled cup coffees
§ Starbucks Doubleshot espresso drinks
§ Starbucks Doubleshot Energy+Coffee drinks
§ Seattle’s Best Coffee Iced Lattes
§ Starbucks RefreshersTM beverages
§ Tazo bottled iced and juiced teas
Food products fresh baked pastries
§ sandwiches
§ salads
§ oatmeal
§ yogurt parfaits
§ fruit cups
§ Starbucks Ice Cream
Packaged coffee and tea whole bean and ground coffee
(Starbucks and Seattle’s Best Coffee brands)
§ Starbucks VIA Ready Brew
§ Starbucks K-Cup portion packs
§ Tazo tea filter-bags
§ tea latte concentrates
Branded merchandise coffee- and tea-brewing equipment
§ mugs and accessories
§ packaged goods
§ music albums
§ books
§ other gifts

Appendix 4: Mobile store

Mobile store

Appendix 5: Second Cup mobile application

Second Cup mobile application
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IvyPanda. (2019, August 19). Starbucks and Second Cup Brand Deconstruction. Retrieved from https://ivypanda.com/essays/starbucks-and-second-cup-brand-deconstruction/

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"Starbucks and Second Cup Brand Deconstruction." IvyPanda, 19 Aug. 2019, ivypanda.com/essays/starbucks-and-second-cup-brand-deconstruction/.

1. IvyPanda. "Starbucks and Second Cup Brand Deconstruction." August 19, 2019. https://ivypanda.com/essays/starbucks-and-second-cup-brand-deconstruction/.


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IvyPanda. "Starbucks and Second Cup Brand Deconstruction." August 19, 2019. https://ivypanda.com/essays/starbucks-and-second-cup-brand-deconstruction/.

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IvyPanda. 2019. "Starbucks and Second Cup Brand Deconstruction." August 19, 2019. https://ivypanda.com/essays/starbucks-and-second-cup-brand-deconstruction/.

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IvyPanda. (2019) 'Starbucks and Second Cup Brand Deconstruction'. 19 August.

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