Table of Contents

Question 1............................................................................................................................................2
STARBUCKS COFFEE BUSINESS PORTFOLIO.....................................................................2
INTRODUCTION............................................................................................................................2
DESCRIPTION OF THE BUSINESS PRODUCT...................................................................2
PRODUCT RANGE....................................................................................................................2
PRODUCT DESCRIPTION.......................................................................................................3
CURRENT PRODUCT MARKET SHARE...............................................................................3
CONCLUSION................................................................................................................................3
Question 2............................................................................................................................................3
2.1.....................................................................................................................................................3
Marketers must conduct research on the specifics of each customer market:.......................3
2.2.....................................................................................................................................................3
Demographic Environment........................................................................................................3
Economic Environment..............................................................................................................3
Natural Environment...................................................................................................................4
Political Environment..................................................................................................................4
2.3.....................................................................................................................................................4
The protection of personal information act four of 2013........................................................4
Question 3............................................................................................................................................4
3.1.....................................................................................................................................................4
Starbucks uses three types of bases:..........................................................................................4
Demographic segmentation.......................................................................................................4
Psychographic segmentation....................................................................................................5
Behavioral segmentation...........................................................................................................5
3.2.....................................................................................................................................................5
Product variability........................................................................................................................5
The product’s life cycle stage....................................................................................................5
Market variability.........................................................................................................................5
Competitors marketing strategies.............................................................................................5
3.3.....................................................................................................................................................5
Product differentiation................................................................................................................5
Service differentiation.................................................................................................................6
People differentiation..................................................................................................................6
Image differentiation...................................................................................................................6
 “More-for-more” positioning.......................................................................................................6
“Less-for-less“ positioning..........................................................................................................6
Question 4............................................................................................................................................6
STEPS IN DEVELOPING EFFECTIVE MARKETING COMMUNICATIONS.........................6
IDENTIFYING THE TARGET AUDIENCE..................................................................................7
DETERMINING THE COMMUNICATION OBJECTIVES.........................................................7
DESIGN A MESSAGE...................................................................................................................7
CHOOSE THE MEDIA...................................................................................................................8
SELECTING THE MESSAGE SOURCE.....................................................................................8
COLLECTING FEEDBACK...........................................................................................................8
Bibliography...........................................................................................................................................9
Question 1

STARBUCKS COFFEE BUSINESS PORTFOLIO

INTRODUCTION
I conducted an interview with Angel Sibanda who is the Starbucks marketing person
at the Menlyn Park shopping centre. Starbucks coffee was first founded on the 30th
of March 1971 in the United States (Geereddy, 2013). It was founded by Jerry
Baldwin, Zev Siegl and Gordon Bowker (Geereddy, 2013). It operates in the coffee
shop industry as well as the retail industry and has over 33,833 stores in 80 different
(markets, 2022) countries.
Starbucks South Africa has increased its portfolio from 16 outlets to 25. The
corporation imports some of its higher-grade coffee beans from farms in the sub-
Saharan Africa, in partnership with farm centers in Ethiopia, Rwanda and Tanzania.
The marketing function with Starbucks is through word of mouth, social media and
advertising.
Address: Menlyn Park, G84, Menlyn, Pretoria, 0062
Contact details: 087 365 1017

DESCRIPTION OF THE BUSINESS PRODUCT

PRODUCT RANGE
Starbucks coffee specializes in hand crafted beverages and merchandise such as:
a) Fresh-brewed coffee
b) Hot and iced espresso beverages
c) Smoothies
d) Coffee- and tea-brewing equipment
e) Mugs
f) Packaged goods
MARKETED BRANDS
a) Teavana
b) Tazo
c) Seattle’s best coffee
d) Ethos
INTRODUCTION OF SELECTED PRODUCT: THE CARAMEL FRAPPUCCINO
PRODUCT DESCRIPTION
A Starbucks Caramel Frappuccino is made by mixing espresso with caramel syrup,
Milk, and Ice until it becomes a chunky iced drink. A swirl of whipped cream on top
with a drizzle of caramel sauce.

CURRENT PRODUCT MARKET SHARE

In South Africa, the local coffee market has had impressive positive growth, in terms
of off-trade retail value RSP at constant 2020 prices, thus achieving and impressive
2.1 %-year growth year-on-year growth to 2019. It is expected to increase even
more, with the market forecast to grow at a CAGR of 2.5 % between 2021 and 2025
(markets, 2022).

CONCLUSION
Researching and conducting the interview with Angel Sibanda has given me a lot of
insight on Starbucks Coffee, like how the provide goods and services to other brands
such as Ethos, I’ve even learnt about the history of the company and how it came to
be what it is today. I’ve also gotten insight on the range of products that they offer
like, hot and cold beverages, merchandise, packaged goods and assorted coffees.

Question 2

2.1
Marketers must conduct research on the specifics of each customer market:
Individuals and households who buy products for their own personal use are
classified as the consumer market (Tait, 2016). Business marketers purchase for
further processing or for their own manufacturing processes (Tait, 2016 ). Reseller
marketers buy with the intent of reselling at a profit (Tait, 2016 ). Government
Markets purchase in order to provide public services or to transfer to the
needy/public (Tait, 2016 ). Outside of South Africa, international markets can be any
of the mentioned markets (Tait, 2016 ).

2.2
Demographic Environment
South African Family Changing; "Non-traditional" households with unique needs and
purchasing habits are becoming more common (Tait, 2016). This factor enables
Starbucks to broaden their approach in servicing their new and growing consumers
Economic Environment
Changes in income; meaning that the consumer bears a greater financial burden
therefore, marketers must pay attention to income distribution and average income
(Tait, 2016). Factors such as income leave the firm (Starbucks) at a disadvantage
because their consumers have much less to spend, and their products become less
appealing.
Natural Environment
Development of environmentally sustainable strategies and practices (Tait, 2016).
Starbucks has introduced biodegradable packaging for example, metal and paper
straws. These changes are very beneficial for the environment, and they serve well
to the image of Starbucks by “earth-lovers”.
Political Environment
Increased regulation of business; marketers must understand the content and
implications of all relevant legislation (Tait, 2016). Starbucks must comply with all
relevant legislation and keep up with the changes in the law despite the difficulty.

2.3
The protection of personal information act four of 2013
Provides for the rights of persons regarding unsolicited electronic communications
and automated decision-making (Tait, 2016 )
The fact that new legislation takes effect while existing legislation is changed
complicates the issue (Tait, 2016 ).
The velocity of all the applicable legislation exchanges consequences and
interpretations makes it very challenging for marketers to stay current (Tait, 2016 )
When expanding their products and the marketing methods for those products,
business executives must keep up with technology advancements (Tait, 2016 ).

Question 3

3.1
The characteristics that marketers use to divide an audience into groups, or
segments, so that they can be targeted with particular marketing activities, are
known as segmentation bases (Udoagwu, 2021).
Starbucks uses three types of bases:
Demographic segmentation
People are divided into groups according to their age, income, level of education,
and occupation through demographic segmentation (Udoagwu, 2021). Starbucks
typically accommodates students as well as working class individuals. There is free
Wi-Fi and seating in a relaxed environment for pupils that want to get some work
done.
Psychographic segmentation
People are divided based on their values, attitudes, and interests through
psychographic segmentation (Udoagwu, 2021).

Behavioral segmentation
Behavioral segmentation separates consumers based on their brand loyalty and
purchasing behavior (Udoagwu, 2021). Starbucks has strong loyalty from their
customer because they never fail to accommodate the needs and desires of their
customers while still maintaining a good company image.

3.2
Product variability
For items that are particularly aesthetically pleasing, such as coffee or milkshakes,
distinction or concentration is more appropriate (Gerber, 2016). Starbucks has a
wide range of coffee, cappuccino, expressos as well as savory treats for customers
to choose from.

The product’s life cycle stage

It may be reasonable for a company to release just one version of a new product, in
which case undifferentiated marketing or concentrated marketing may make the
most sense (Gerber, 2016).

Market variability
Undifferentiated marketing is appropriate if the majority of consumers have similar
tastes and respond to marketing efforts similarly (Gerber, 2016). Consumers for this
particular firm acquire the same product based on its popularity and quality such as
the “Frappucino”. It would be unnecessary for Starbucks to practice differentiated
marketing.

Competitors marketing strategies

A company can obtain an advantage over rivals who utilize undifferentiated
marketing by using differentiated, concentrated markets (Gerber, 2016).

3.3
Product differentiation
Differentiation of products happens on a spectrum. On the basis of features, flavor,
and design, Starbucks products can be successfully distinguished (Gerber, 2016 ).
Starbucks could begin marketing products that are the most popular to boost
revenue and commission.
Service differentiation
Through prompt, convenient, and careful service or delivery, the company can
differentiate its services (Gerber, 2016 ). Starbucks should provide supervisors
and/or all staff with manager and customer training services to accommodate
customers on a higher and more skilled level.

People differentiation
Hiring and educating better employees than their rivals is part of people
differentiation (Gerber, 2016 ). When hiring personnel, Starbucks would look for
people that are enthusiastic and accommodating. This can result in happy customers
and an increase in company morale (motivation)

Image differentiation
A company's brand should reflect the unique features, advantages, and positioning
of its products, while also promoting creativity and perseverance (Gerber, 2016 ).
Starbucks is well renowned for its iconic logo, which draws customers in due to its
widespread popularity. The company could redesign their logo and make it more
stylish to fit in with the current trends of this generation.

“More-for-more” positioning
Offering the most premium good or service while charging more to offset the
additional costs is known as "more-for-more" positioning (Gerber, 2016 ). Due to the
higher cost of making/producing the goods, Starbucks' product quality and service
will remain the same while increasing in value.

“Less-for-less“ positioning
Meeting consumers' reduced performance or quality expectations at a much lower
cost is known as "less-for-less" positioning (Gerber, 2016 ). The only aspect of
Starbucks' product that will diminish is the price, even though the product's quality
and level of service will remain unchanged.

Question 4

STEPS IN DEVELOPING EFFECTIVE MARKETING COMMUNICATIONS

The new product that will be launched by Starbucks is called “the rainbow frappe”
which is fruity iced beverage that will be celebrating pride month where everyone’s
sexuality is celebrated. The beverage is unique because it one flavour but it comes
in all of the colours of the rainbow.
IDENTIFYING THE TARGET AUDIENCE
The target audience may include current buyers, potential buyers and also those
who will be making the buying decision or influence it (P. Kotler, 2016). Starbucks
coffee has the target audience of young adults from the ages of 18-24 (Musonera,
2021), they account for 40% of the coffee sales because it provides a place for
students to come together and hang out, study and meet one another (Musonera,
2021), So the target audience for this new beverage will mostly consist of young
adults and anyone who is part of the LGBTQ+ (lesbian, gay, bisexual, transgender,
queer) community or supports them.

DETERMINING THE COMMUNICATION OBJECTIVES

The moment the target audience has been interpreted, marketers should establish
what the desired response is (P. Kotler, 2016). Starbucks new product development
process usually worked on a 12- to 18-month period where the interior investigation
and development team would experiment with product formulations, administered in-
store experiments and market tests (Moon, 2003). This way, customers can try the
product or a sample of the product and give their honest opinion about it.

DESIGN A MESSAGE
Message content- because the new product is celebrating pride month, it will have a
moral appeal because it will urge people to support the LGBTQ+ community and
bring about a positive cause. This will make the community feel more included and
also feel good about themselves. The new beverage comes in all the rainbow
colours but they all have one flavour, this is done so that we can educate people that
even though we are all different, we all have the same colour blood running through
our veins, we shouldn’t discriminate and unify as one, because we are all the same,
we just come in different colours, personalities and preferences.

Message structure- the first major structure issue is whether to draw up a conclusion
or not, although researchers say that the best solution is to ask questions and allow
the customers to come up with their own conclusions (P. Kotler, 2016). The second
message structure involves presenting the first argument first because it gets the
strongest attention (P. Kotler, 2016). The third is to present a one-sided argument
because it is more effective in sales representation (P. Kotler, 2016).

Message format- involves using colours, which will be the rainbow colours for this
specific product without making it look too busy and if the message will be carried
out on radio, I would want some who is part of the gay community to represent. The
message I chose for this product is “have pride, be pride”, meaning that you should
have pride in yourself and be who you are, be pride.
CHOOSE THE MEDIA
Personal communication channel- when two or more individuals have direct
communication with one another, via email, face-to-face, phone call or SMS (P.
Kotler, 2016). The most effective communication channel is word-of-mouth because
it will allow people who loved this new product to tell their friends about it, post about
it on social media and recommend it to people around them. Another effective
channel that can be used is Buzz marketing, it involves the getting opinion leaders to
spread information about the product (P. Kotler, 2016). In today’s age you can get
influencers who have a large following on social media to come try the products and
give their honest review about it through their channels like Instagram and YouTube.

No-personal communication channels- involves spreading messages without any

personal contact which include newspapers, billboards, websites and online sharing
networks. The most effective channel would be doing social media pop up ads
because 70% of the time, people are on their phones, radio, and television
advertising.

SELECTING THE MESSAGE SOURCE

Messages that delivered by sources that are highly credible are way more
persuasive and why some marketers hire celebrity endorsers to deliver their
messages (P. Kotler, 2016). In this case with the Rainbow beverage, the type of
celebrity that I would want to endorse this product is someone like Somizi, or famous
YouTuber Lasizwe who falls under the young adults, he is a great influence and
caters to the Youth and he is also part of the LGBTQ+ community.

COLLECTING FEEDBACK
After sending the message to the targeted audience about the awareness of the
“rainbow” community and, the questions that should be asked is whether they recall
the message, how many times did they see it, what key points do they remember,
how they felt about the message and also their past and present feelings about the
product (P. Kotler, 2016).
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