Advertising Plan for Starbucks Coffee

Subject: Entertainment & Media
Pages: 6
Words: 1664
Reading time:
6 min
Study level: College

Introduction

This advertising plan explores Starbucks’ coffee delivery focusing on its situation analysis, advertising Objectives, advertising (creative) Strategy, advertising budget, and testing and Evaluation. The first section of this plan emphasizes the Starbucks coffee situation analysis, including Porter’s five forces, PESTEL analysis, and SWOT analysis, of Starbucks coffee delivery. The coffee market is developing at a high rate on a global scale and will probably increase in the coming years. The increase is due to customer demand for verified and quality coffee foodstuffs (Dublin, 2021). Moreover, Europe, Latin America, and the Southeast are the key coffee-consuming regions, with Europe driving the industry with the largest per capita usage. The COVID-19 on the other hand, had a negative influence on the market caused by sudden lockdowns and restricted occupancy per social distance conventions. According to the US coffee industry trends, corporations like Nestle have seen substantial expansion in their bread and bakery sales during alterations in customer behavior.

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Situation Analysis

Porter’s Five Forces

Moderate Threat from New Entrants

As drinking coffee rises, countless other businesses may consider entering the industry as merchants or through storefronts, posing a danger to Starbucks. Furthermore, running a coffee shop costs less than other enterprises since smaller restaurants can start and attract clients locally. Nevertheless, establishing an organized corporation like Starbucks worldwide necessitates significant capital. Furthermore, new entrants may not compete with Starbucks coffee delivery worldwide for decades.

Weak Bargaining Power of Suppliers

Coffee availability in the industry is controlled by farmer yields, which fluctuate owing to global weather conditions that affect coffee output. In the economy, various suppliers significantly affect Starbucks’ power supply. Furthermore, several coffee bean purchasers increase the market’s negotiating power for coffee bean providers. On the other hand, Starbucks has roughly 400,000 producers where it buys coffee from local farmers globally (Wills, 2021). The corporation has simple access to an enormous supply of high-quality coffee due to this arrangement.

Buyers’ Strong Bargaining Power

Customers have lower switching prices making it a formidable tool in the competition. Furthermore, clients frequently replace coffee and perhaps other less expensive items. Individual clients’ modest sizes, on the other hand, have no bearing on the company’s sales. Starbucks has overcome this competitive power thanks to its promotion mix, including premium coffee experiences and other products that diminish client switching intents.

Substantial Threats posed by substitutes

A threat is a modest market force since several replacements are available, allowing buyers to switch products depending on their needs quickly. Instant beverages are widely available in retail stores, supermarkets, and other locations. In addition, various fast food items have an impact on Starbucks sales. Customers can purchase various beverages and energy drinks from businesses, including PepsiCo and others. Starbucks offers a wide range of items, but people prefer instant products since they are more affordable.

Market Competition

The coffee competitiveness is heightened by the massive amount of coffee retail businesses. Due to price discrepancies, clients can rapidly move from one teashop to another. Additionally, the coffee served by regional or other coffee shops is often less expensive. On the other hand, Starbucks maintains its worldwide brand position by a generic strategy for differentiation based on the unique product offerings. Starbucks’s expansion plan also helps the company to keep ahead of its competition.

PESTEL Analysis

Political

Global political instability such as Brexit, the US-China trade war, worldwide pandemics, and other challenges, creates international trade hurdles affecting every sector and country. The United States, Starbucks’ primary market, is embroiled in a trade war with China, with ramifications for the coffee industry’s sales and expansion initiatives and the supply chain. Furthermore, due to the global epidemic, governments in several countries-imposed bans on foreign supply chains, which are still in existence in many countries due to social distance standards.

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Economical

The world economy is steadily recovering from the consequences of the worldwide COVID-19 pandemic; the United Kingdom and the United States are also recuperating from COVID-19, which resulted in negative economic growth. The epidemic has negatively influenced the economy, and there are concerns about worldwide unemployment, which rose during the outbreak. Due to a shortage of funds and changing customer habits, there is no coffee demand in stores in such conditions.

Social

Coffee has become a popular beverage among Americans, Briton, and even Asians who want high-quality coffee. There is nearly a third wave of coffee, in which customers are enticed to explore various in-store coffee products available on the market. Furthermore, when people’s disposable income rises in emerging countries, their buying power for premium services rises, paving the way for the proliferation of coffee shops in those countries. On the other hand, consumers continue to favor in-house coffee, and the catastrophe has altered consumer perceptions.

Environmental

Authorities in every nation with various environmental protection laws and regulations are concerned about rising temperatures, climate change, and other factors. The coffee business is also being impacted by environmental changes, with coffee crop yields falling and massive water usage becoming a worry. Aside from that, coffee companies must adhere to standards regarding handling waste, water conservation, and so on. Companies in the coffee sector must adhere to various rules and regulations from the firm’s registration through its operations. Companies must register under the country’s laws and adhere to all registration procedures. Furthermore, stringent food safety requirements vary from country to country, and Starbucks must adhere to worldwide catering safety legislation. Import-export laws also apply, which include tax levies and other transportation restrictions.

SWOT Analysis

Strengths

Manufacturing has the benefit of being a very steady business. Manufacturing goes through various changes depending on the country’s economic highs and lows, even though it is marked by repeating recovery periods following any downturns. Moreover, during the last decade, manufacturing has become highly efficient, with the opportunity to optimize both personnel and machine productivity to increase profits. Weaknesses One of its weaknesses is most of the manufacturing sector is involved with the production of quasi-commodities, which means that a significant economic downturn can be disastrous for the economy. There are several competitions, but there is little expansion room; the manufacturing industry can be lucrative for employed people, and it might be unattractive to entrants. One of its weaknesses is that most manufacturing business involves the creation of non-essential commodities. The manufacturing sector can be lucrative for individuals already employed, but it may be undesirable to newcomers.

Opportunities

The manufacturing sector has prospects in two areas: technology and biotechnology. These are lucrative and growing market areas. Furthermore, because these are knowledge-based businesses that require highly skilled employees, low-wage newcomers will find it difficult to compete, providing more industrialized nations an advantage. Exporting to global markets with growing middle-class boosts earnings for innovation and biotechnology enterprises. Low-wage countries are the greatest threat to developed countries’ industrial sectors. Due to low salaries, many businesses in more prosperous nations have been unable to compete, pushing them to relocate abroad in search of cheaper labor.

Advertising Objectives

The coffee delivery advertising goals include increasing brand gratitude by steadily accumulating new customers every month and advancing a plan for snowballing sales while upholding or depressing marketing prices. One of the most critical goals in advertising is to explain the company’s mission. Because this is the only reason your firm exists, it has to be the driving force behind all business decisions. Businesses should explain it so that their employees can understand and connect more deeply with your business goals. As a result, they are more committed to their employment, and they utilize this purpose to guide all they do, from everyday chores to client interactions. Businesses should always make an effort to convey information to the targeted population in a motivating manner. Firms may inspire them to be great and do good by sending them encouraging messages about what the company has previously accomplished and alerting them about fresh ideas they can use to benefit clients. Corporations should keep their messages optimistic about instilling good energy in the staff.

Advertising (Creative) Strategy

Advertising or creative strategy includes creating a media plan for the company by considering the target markets and clients’ media habits. The coffee product advertising strategy will include making a list of all the channels the company would like to target and deciding how much money it will allocate to each channel. The following advertising budget will play a crucial role in implementing the advertising strategies.

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January January February February March March
Estimated Real amount Estimated Real amount Estimated Real amount
Market investigation 600 400 600 900 600 400
Owned broadcasting 200 200 200 0.00 200 0.00
Video Promotion 1600 1300 1600 1000 1600 1700
Social media publicity 400 360 400 500 400 320
Publicizing 500 500 500 500 500 500
Artistic software 200 200 200 100 200 0.00
Outworkers 400 400 400 400 400 400
Occupied time workforces 83000 91000 83000 91000 83000 91000
Hardware 1500 1500 1500 1500 1500 1500
OVERALL 88400 95860 88400 95900 88400 96920

Figure 1: The Advertising Budget.

Rendering to the above budget, the company will also create a content marketing plan, including deciding what it would post and how often it will publish it. It will later form a team of digital marketers, mail marketers, photographers/videographers, copy editors, and other specialists to design and execute the strategy. Hiring a marketing agency is another alternative to maintain ‘uniformity of content’ throughout all platforms. On Facebook and Twitter, Starbucks adopts a similar tone and graphics.

Testing and Evaluation

Two standard and validated qualitative research methodologies for testing ads are monadic and sequential monadic testing. Monadic testing requires people to observe every ad and provide opinions, providing the researchers with an unbiased perspective. The company will utilize monadic testing on its advertising plans. When advertising companies seek immediate, first reactions to a specific commercial, this might be pretty valuable. Evaluation can assist in defining the kinds of replies marketing activities provoke. Customer service appraisals, online appointments, and click-through amounts can all imitate what consumers talk about business activities and the promotion of effective programs.

References

Dublin. (2021). Global $465.9 Billion Coffee Market (Value, Volume) Analysis and Forecast to 2026. GlobeNewswire News Room. Web.

Wills, J. (2021). Starbucks Stock: Analyzing 4 Key Suppliers. Investopedia. Web.