Starbucks Coffee Company (Hong Kong) was established in May 2000. They opened the first store in Central’s Exchange Square. By May 2008, Starbucks has opened more than 100 branches across Hong Kong commercial, shopping & entertainment and residential areas.
Why did we choose this brand?
The brand name of “Starbucks” becomes very well-known in Hong Kong. According to the article of Hong Kong Coffee Culture Exchange Association ( http://hkccea.org/2010/06/27/hk-2/), we can see that a lots of Hong Kong people tend to pursue a high quality of coffee. Such as middle class, high income level people. They are potential customer. So we choose this brand for our marking project. Marketing Objectives:
Our marketing objective:
1. Increase total sales by 3% to 5% at the end of 2013.
2. Acquire additional 2% to 3% new customers from the non-coffee drinking market at the end of 2013.
To achieve above objectives, it will include targeting a new market segment and use the “SWOT” tools to help us analysis and achieve this growth. Before doing the SWOT analysis, we would like to briefly explain the PEST:
Political-legal Factors:
The statutory Minimum Wage came into force on May 1, 2011. After that, the catering service claim the cost of recruiting is raising.
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Economical Factors:
According to the census, we find that the average spending on drink of the mid-income group is growing, compare to a decade before.
Socio-cultural Factors:
Refer to an article of Oriental Daily on 2010, it shows that the coffee culture is building up in Hong Kong these years, more people are seeking a higher quality coffee instead of just have a cup of coffee in a Hong Kong local restaurant or fast food restaurant(eg McDonald).
(http://orientaldaily.on.cc/cnt/lifestyle/20100907/00298_001.html)
Technological Factors
Majority of the consumers in Hong Kong are greatly capable of using computer-based platforms. With highly technologically population, the consumer base on factor of convenience as an advantage. SWOT
By definition, strengths (S) and Weaknesses (W) are the internal factors. Opportunities (O) and Threats (T) are external factors.
Now, we are going to discuss the SWOT of Starbucks Hong Kong.
Strength
1. Brand Name
Starbucks already represent a kind of lifestyle. This lifestyle is the America living style. Working in a relax way, enjoy the life. Moreover, for many people, once they think coffee, the follow wording come out will be Starbucks. According to the below link, we can see even an article shown in university web mentions that Starbuck is a well-known brand and link with quality of life. (http://www.hkcc-polyu.edu.hk/index.php?lang=eng&cms=1687)
Weaknesses
1. Delivery Services
After comparing the delivery menu between Starbucks and Pacific coffee, the minimum order charge of Starbucks is 3 times higher than their main competitor, Pacific coffee. Moreover, during the peak hour (12-2), Starbuck doesn’t have the delivery services. Oppositely, but Pacific coffee has.
2. Product range
Compare to Pacific coffee, Starbucks provides less drink, refreshments and desserts. – Drink: Around 10% of product less than Pacific coffee
– Refreshment + Desserts: Around 15% of product less than Pacific coffee
Opportunities
1. Huge potential growth market
A culture of coffee drinking is developing in the mid-income groups since the drinking coffee culture is becoming more common. We can foresee that this market will become larger, and Starbucks probably can enjoy this enlarged market and have some brand loyalty customers.
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2. Seeking a fresh and tasty coffee
The mid-income group people are willing to seek a fresh and tasty coffee in a convenience way, anytime, anywhere.
Threat
1. Higher operation cost
Due to the minimum wage is set, the recruitment cost is raising and also hard to employ staff, since less people are willing to apply the low level post, e.g. clearing. Segmentation
We’re defined three segments to analyze which one has potential to elevate of sales amount:
1. Age
We analyze between 30 and 40 group since they may be mid-level of organization, they have stabilize and appropriate revenue.
2. Nationality
Local people have not volitional to hold a gathering / meeting in Starbucks compare with Foreigner.
3. Location
Three locations selected from commercial district, most of a business is setup a fortified point in there and it has potential to elevate of sales amount.
4. Perception
All peoples in the both segments percept that Starbucks is their first priority to go to meeting and gathering.
5. Lifestyle
All peoples said that they like decoration and feeling tranquil, relax, listening music and enjoy coffee when they go to Starbucks.
Targeting
We plan to analyze Segment 1 and focus how to elevate the sales amount in Central.
Assumed age and national as same as Segment 2 and 3, Central is a Financial District, they will work until mid-night such as I-Bank and multinational companies, Starbucks can open 24 hours as MacDonald because no one provides 24-hours to serve target customers, so that we target Starbucks store in Central and evaluate how to elevate their sales amount.
Positioning
Coffee Shop Environment
Starbucks designed cozy and free layout as office and home which want to make customers stay to linger, gathering and meeting. Starbucks plays smoothing music let customers relax.
Customer Service
Starbucks continuous to elevate customer satisfaction and customer loyalty. Starbucks provides training courses for employees how to establish “customer relationship” like “welcome customers with a smile”.
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