Starbucks Coffee Marketing

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Table of Contents

The Market for Starbucks Coffee
Potential Suppliers and Demanders
Factors Determining the Ability and Willingness to Supply And Demand the Good
Factors Determining the Quantity Sold Annually and the Consequent Prices
Bibliography
Footnotes

The Market for Starbucks Coffee

Starbucks coffee is a world’s leading beverage. The Starbuck coffee has a relatively expansive market size. Most of its potential consumers have varied characteristics and consumption behavior. The coffee covers an approximate of 33% of the total market share in the United States. Notably, Starbucks Coffee sells at very high rates.¹

It is critical to analyze the market structure and composition for the Starbucks Coffee. The product has a very expansive market share. There are several reasons attributed to this noble achievement.

Potential Suppliers and Demanders

There are several consumers of Starbucks Coffee in different countries. However, it is vital to note that a huge proportion of these consumers are city and upscale suburban dwellers. The product enjoys very wide market coverage.²

This is despite widespread rumours about the high prices. Consequently, there are many distributors and suppliers of the product within the U.S. Observably, the hard financial conditions have led to significant cuts in the demand. The overall pattern is a reduced level of demand and an increased substitution with other alternatives. These include the McDonald’s McCafe. The company’s elementary target comprise of the males and females.

The age bracket of these target groups is between 25 and 40.³ Analytically, this category of demanders constitutes approximately half of the overall business. Most of the demanders are urbanites. Apart from this, they depict considerably high levels of household and individual income.

They are mostly professional and career persons who like enjoying their social life and welfare. This category of demanders expands at an annual rate of 3%. Young adults are also key demanders of the product. They represent an average of 40% of the total sales for the product. In this category, the major audience include the college students.

Starbucks Coffee has managed to attract a huge percentage of the demanders. This is because of unique and impressive advertising, promotion and celebrity engagement. The company continually applies robust and transformative technology in its promotion and production practices.

This initiative is aimed at fostering a significant impact and increase in the number of its demanders. Particularly, this applies to the young adults and other similar consumers. Social networking has played a critical role in enhancing the capacity of the Starbucks. They have been able to attract and retain more consumers.

As realized by the company and different suppliers, it is important to portray and maintain the “cool image.” This helps to sustain the high number of consumers. According to the market statistics in the U.S, this market category expands by approximately 4.6% annually.⁴

The kids and teens form the last category of the notable demanders. They constitute for around 2% of the Starbucks coffee consumers in the U.S. However, these consumers access these products through their parents and guardians. There are different suppliers of Starbucks Coffee in the U.S. ⁵ Starbucks Company is one of the potential suppliers in the US market.

Nonetheless, there are other different middle level distributors and suppliers created by the company. Majorly, these refer to those formed to supply these products within the overseas markets.

Factors Determining the Ability and Willingness to Supply And Demand the Good

Different factors play significant roles in influencing the supply and demand of Starbucks Coffee. The advertisement and promotion strategies launched by different suppliers are important. They dictate the level and nature of demand for the Starbucks Coffee. The complimentary products also have a crucial role in the determination of supply and demand. There has been a recent outcry of increased competition from cheaper complimentary products in the major markets.⁶

Increased competition is, therefore, another significant factor in the demand and supply of the product. The taxation policies within different markets have played a crucial role in the analysis of supply and demand patterns. This is because high taxes increase the prices of the products, thereby lowering the demand from consumers. Alternatively, these elevated taxes may also reduce the supply levels within different markets.

Several factors affect the demand and supply patterns. Some of these include weather changes. In fact, most marketers have noted fluctuations in the supply and demand of the product during winters and summers. The price of raw materials dictates the quantities supplied within most markets. It is also vital to note that high production costs during the initial stages limit the number of suppliers and consumers.⁷

Ideally, this is due to high product prices realized or recorded at the delivery and consumption point within the society. The supply and demand patterns always respond to remarkable fluctuations. These may include the fluctuations caused by bad harvests. There are also transformations in the tastes and preferences of consumers. The changes pose greater effects on prices and available quantities.

Factors Determining the Quantity Sold Annually and the Consequent Prices

Different factors within perfect markets play critical roles. Specifically, this relates to the manipulation of product market prices and quantity of sales.⁸ The increased level of rivalry and competition within the coffee market manipulates the quantities supplied as well as their prices.

Additionally, major economic setbacks such as the recent recession have potential impacts. These are observed on the supply and pricing mechanisms for Starbucks Coffee. Most suppliers are presently grappling with mechanisms to elevate their annual sales. This pattern is observable even within different destinations, including the global markets.

Generally, the severe economic recession has played a remarkable role in minimizing the sales capacity of the product.⁹ Price adjustments within competitive markets have considerably influenced sales and quantities supplied. In addition, revenue and foreign investment policies within different markets also play a significant role. It is important to examine the demand and supply curves for the product. The approximate plots of the demand and supply curves for Starbucks Coffee are indicated below.¹⁰

Bibliography

Bussing-Burks, Marie. Starbucks. Santa Barbara, Calif: Greenwood Press, 2009.

Hawknis, Del I., David L. Mothersbaugh, and Amit Mookerjee. Consumer behavior: building marketing strategy. New Delhi: Tata McGraw Hill, 2011.

Majumdar, Suman & Zhang, Yaoqi. Market for Green Signaling. The Business review, Cambridge, 13, no. 2 (2009) 87-92. Web.

Pham-Gia, Khanh. Marketing strategy of ‘Starbucks Coffe’. Munich: GRIN Verlag GmbH, 2009.

Simon, Bryant. Everything but the coffee: learning about America from Starbucks. Berkeley: University of California Press, 2009.

Zikmund, William G., and Barry J. Babin. Essentials of marketing research. Australia: South-Western Cengage Learning, 2012.

Footnotes

¹ Bryant Simon, Everything but the coffee: learning about America from Starbucks (Berkeley: University of California Press, 2009)

² Del Hawknis, Mothersbaugh David and Mookerjee Amit, Consumer behavior: building marketing strategy (New Delhi: Tata McGraw Hill, 2011)

³ Khanh Pham-Gia, Marketing strategy of ‘Starbucks Coffe’ (Munich: GRIN Verlag GmbH, 2009)

⁴ Del Hawknis, Mothersbaugh David and Mookerjee Amit, Consumer behavior: building marketing strategy (New Delhi: Tata McGraw Hill, 2011)

⁵ Khanh Pham-Gia, Marketing strategy of ‘Starbucks Coffe’ (Munich: GRIN Verlag GmbH, 2009)

⁶ Marie Bussing-Burks, Starbucks (Santa Barbara, Calif: Greenwood Press, 2009)

⁷ Marie Bussing-Burks, Starbucks (Santa Barbara, Calif: Greenwood Press, 2009)

⁸ William Zikmund and Babin Barry, Essentials of marketing research (Australia: South-Western Cengage Learning, 2012).

⁹ Suman Majumdar & Yaoqi Zhang, Market for Green Signaling. The Business review, Cambridge, 13, no. 2 (2009) 87-92.

¹⁰ Suman Majumdar & Yaoqi Zhang, Market for Green Signaling. The Business review, Cambridge, 13, no. 2 (2009) 87-92.

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