Running head: STARBUCKS K-CUPS 1 Starbucks K-Cups Introduction For any company to be successful, it is always very important for the managers to be able to clearly identify the main target market for its products before it even comes to the market. This is often very important in making sure that the company is able to fit the products with the needs of the markets. Making sure these two are the same often leads to increased sales for the STARBUCKS K-CUPS 2 company while leads to more revenue and more returns for the company from the sale of its products. In the long term, they often end up with a large market share for that product and this keeps the money coming into that company. Starbucks is among the most successful companies in the American and global market. it has specified its operations in the drinks and snacks business and even more specifically in the coffee business. There are a variety of products that they offer in the market but among the most recognized of them all are the K-Cups. These are small single serve coffee containers that the company makes for the consumers to use to brew coffee for themselves. This often provides the average required amounts of coffee per cup and helps make sure that people are able to have the correct measurements for every cup. They come in different brands that different customers prefer. Organization's background, industry and product Starbucks Corporation is an American company that specifies in the sell of coffee. It was started back in 1971 in Seattle Washington state. The company has since then been able to expand its operations and now is found in many global places as one of the leading coffee brands. Many of the stores are found in America, Canada, China, Japan, South Korea and the United Kingdom. The companies numerous expansion has seen it even list as a public company and is traded as so. The company currently has a global market and is among the most recognized brands in the food and beverage industry. When it comes to the industry where the company operates, the company is a key player in the coffee industry. This is a division of the food and refreshment worldwide industry however is one that the organization has possessed the capacity to center its consideration and possessed STARBUCKS K-CUPS 3 the capacity to get an large piece of the pie in the coffee business. The global food and beverage industry is very large and has many companies participating in the supply of these products. However, Starbucks has been able to focus its attention on coffee, tea and other snacks that can accompany these two drinks (Grant, 2016). The company has been able to have a controlling share of the coffee industry. Apart from the retail of the product, the company is notably a major player in the supply chain of the coffee beans. The company is able to purchase coffee beans from producers and then brands them depending on their taste. They then supply the coffee beans to many of the different consumers in the markets where it operates. This has made the company to be globally recognized in the coffee industry for both its dominance as well as top quality products. Among the most recognizable products that that company sells is the Starbucks K-Cups. This is coffee that is packed in single cups that are designed to be able to brew one single cup of coffee. They put in coffee ground sin a plastic can that is fitted with a filter inside to hold the coffee and is then sealed with an aluminum cover for protection. It works by putting it in a coffee machine which sprays hot water through the aluminum foil and then pierces the plastic can at the bottom to collect the hot coffee that comes out of the filter. This makes a perfectly measured cup of coffee that many customers want. The Starbucks K-Cups The concept of the K-Cup was first introduced into the market by a company called Keurig that came up with the K-cup brewing systems. It was the first to make such a system for its coffee but later licensed the use of this system to many other drinks processors (Pride and Ferrell, 2014). Among the companies licensed was Starbucks. The company took up the system STARBUCKS K-CUPS 4 and started making the product for the many different brands of coffee that it offers to its customers. Today, it’s among the most common used methods of making coffee by more than 40% of its customers in its retail shops. The K-Cup brewing system works by making a single cup for every K-Cup that is made. A k-cup is a plastic can that is fitted with a filter inside and is filled with coffee of a certain measurement. The coffee is then sealed with an aluminum foil and this helps to keep the coffee fresh and protects it from both direct moisture and sunlight. This makes sure that it gets to the customers as fresh as possible. The plastic cup is them placed in a coffee making machine where it is pierced at the bottom ant at the top. The nozzle at the top sprays hot water into the can and through the coffee. The water is then filtered by the filter that is fitted within the plastic can and the hot coffee collects at the bottom of the can where it is then sucked out by the second nozzle at the bottom. This nozzle then pours the coffee in to the cup and this coffee is ready to drink for the customers. The KCups are very many and differ depending on the flavors of the coffee that the customer may be interested in as the coffee is sold in many different flavors depending on where the coffee beans were sourced from and nay other additions that may have been made to the coffee. SWOT analysis for the Starbucks K-Cups Strengths Among the strengths that the Starbucks K-Cups have is that they have a large market to sell to. Starbucks as a company operates in very many countries and serves very many customers STARBUCKS K-CUPS every day. The company has operations in six continents and has thousands of stores. This is strength for the company’s products as it will be able to reach a large market hence the possibility for a large amount of sales as opposed to other companies that do not operate in as many markets and have many customers (Verbeke, 2013). Weaknesses What is considered to be the main weakness is the fact that these K-Cups are only used once. They are only used once and more specifically for one cup of coffee. This means that if one wanted to have several cups of coffee at a go, it takes time and a lot of K-Cups to be able to achieve this. It is also a process to keep changing the k-cups one after the other until you are done preparing all the coffee cups required. It would be better if there were k-cups that could be used to make more than one cup of coffee while maintaining the same high quality. Opportunities The main opportunity is that in many places, this is still a new idea. This means that many of the people are yet to accept this new method of making coffee. This is particularly true for the markets outside of North America. Huge numbers of the general population in the developing world have additionally not taken up the idea and this is an open door for the organization to have the capacity to build the offers of the k-cups. By introducing them to the market, they will be able to increase their sale in these new markets. Threats Among the threats that are being posed in the sale of the k-cups is that other companies that also specialize in the sale of products packed in the same manner are also expanding their 5 STARBUCKS K-CUPS 6 presence in different markets. This means that Starbucks is likely to face a lot of competition for the same market and products that are almost the same in the near future. This is a threat because it may lead Starbucks losing market and may also see them reduce the revenue that they may be getting. This in the long term is a threat to the company’s performance. Competitive analysis of the organization and offering In the current market, there are several companies that are actively offering the same products though under different brands. This means that there is competition for the same market. The main market in this case is the American market where there are many coffee houses that are offering the same product. The international market is not left out as there is considerable competition from companies that have also been licensed to use the technology for their products. The following is the competitive analysis of Starbucks k-cups compared to the other competitors k-cups. The first in the analysis are the things that the company is able to do better than the competitors do. The main item that Starbucks has as an advantage hear is the fact that it is located in a very large geographical area. Starbucks operations are found in very many countries and hence they have a large market to serve. This is an advantage that they have over their competitors as it enables them to be able to make more sales to these markets as compared to their competitors who have limited market access (Michelli, 2014). On the things that the organization does as similarly as the contenders, prices are first on the rundown. The costs of the vast majority of the k-cups are just about the same in numerous spots. This is regardless of the distinction in the brands and additionally the produces. This is essential to note since it implies that none of the contenders have favorable position with regards STARBUCKS K-CUPS 7 to the pricing of the products. This implies the clients settle on their choice taking into account different elements that don't identify with the cash utilized. The nature of the item is likewise just about the same for the majority of the cafes and this additionally applies on account of the KCups. Lastly, on the items that the competitors do better than Starbucks, the main item is service quality. As a result of Starbucks being a big organization, the company has a good reputation for its products and this means that it has a lot of customers. Serving these many customers may lead to them not giving them the best service possible as it is done quickly to create time for the others. In perspective of this, a portion of the contenders have little operations in a portion of the locales and this makes it workable for them to offer their clients better client services as opposed to Starbucks. This is a factor that the company should consider and improve on. Target market The target market of Starbucks K-Cups is divided into three main groups. The first of this are the adults. They are mainly people which are aged between 25 years and 50 years. These people from the majority group of people that purchase star bucks products. They are mainly in the working class and often have to rush in having their meals and breakfast and Starbucks provides healthy snacks and drinks which these group of people are willing and able to purchase for their consumption. They form the largest market of about 49% of the total. The second group is the young adults. These are people that are mainly aged between 18 years and 24 years. The largest population of these people is found around campuses where most of them are completing their courses. The company places it stores in areas that are accessible to STARBUCKS K-CUPS 8 this group of people so as to attract them to make purchases for their daily meals as well as snacks for their consumption. They have a huge appetite for coffee and this can easily be solved by the use of such K-Cups. Lastly, the company’s third target market is the largest consumers of their products. This included places like hotels and restaurants. These are businesses that make purchases in bulk for them to use them in serving their customers. They also take a huge percentage of the sale of KCaps specifically among the products that Starbucks offers to them. This is on account of they are anything but difficult to utilize and they ensure that every client feels that they are dealt with extraordinarily and this implies they get the chance to make more offers of the Starbucks k-cups items. Needs that cause target market to buy For many of the adults, they make the purchase as a quick snack that they can take while doing other businesses. They also take this as breakfast on their way to work in the morning. The young adults are on the other hand consumers on the Starbuck K-cups because they also need a snack that is healthy as opposed to consuming many of the fast foods. This coffee is drunk with other items like cakes or doughnuts and this makes the K-Cups to be a perfect snack for consumption by many of the people. The hotels purchase them as a product that they need to sell to their customers as well. Positioning statement Better than just coffee for all. STARBUCKS K-CUPS 9 References Verbeke, A. (2013). International business strategy: Rethinking the foundations of global corporate success. Michelli, J. A. (2014). Leading the Starbucks way: 5 principles for connecting with your customers, your products and your people. STARBUCKS K-CUPS Grant, R. M. (2016). Contemporary strategy analysis: Text and cases. Pride, W. M., & Ferrell, O. C. (2014). Foundations of marketing. 10 Running head: STARBUCKS K-CUPS 1 Starbucks K-Cups Introduction For any company to be successful, it is always very important for the managers to be able to clearly identify the main target market for its products before it even comes to the market. This is often very important in making sure that the company is able to fit the products with the needs of the markets. Making sure these two are the same often leads to increased sales for the STARBUCKS K-CUPS 2 company while leads to more revenue and more returns for the company from the sale of its products. In the long term, they often end up with a large market share for that product and this keeps the money coming into that company. Starbucks is among the most successful companies in the American and global market. it has specified its operations in the drinks and snacks business and even more specifically in the coffee business. There are a variety of products that they offer in the market but among the most recognized of them all are the K-Cups. These are small single serve coffee containers that the company makes for the consumers to use to brew coffee for themselves. This often provides the average required amounts of coffee per cup and helps make sure that people are able to have the correct measurements for every cup. They come in different brands that different customers prefer. Organization's background, industry and product Starbucks Corporation is an American company that specifies in the sell of coffee. It was started back in 1971 in Seattle Washington state. The company has since then been able to expand its operations and now is found in many global places as one of the leading coffee brands. Many of the stores are found in America, Canada, China, Japan, South Korea and the United Kingdom. The companies numerous expansion has seen it even list as a public company and is traded as so. The company currently has a global market and is among the most recognized brands in the food and beverage industry. When it comes to the industry where the company operates, the company is a key player in the coffee industry. This is a division of the food and refreshment worldwide industry however is one that the organization has possessed the capacity to center its consideration and possessed STARBUCKS K-CUPS 3 the capacity to get an large piece of the pie in the coffee business. The global food and beverage industry is very large and has many companies participating in the supply of these products. However, Starbucks has been able to focus its attention on coffee, tea and other snacks that can accompany these two drinks (Grant, 2016). The company has been able to have a controlling share of the coffee industry. Apart from the retail of the product, the company is notably a major player in the supply chain of the coffee beans. The company is able to purchase coffee beans from producers and then brands them depending on their taste. They then supply the coffee beans to many of the different consumers in the markets where it operates. This has made the company to be globally recognized in the coffee industry for both its dominance as well as top quality products. Among the most recognizable products that that company sells is the Starbucks K-Cups. This is coffee that is packed in single cups that are designed to be able to brew one single cup of coffee. They put in coffee ground sin a plastic can that is fitted with a filter inside to hold the coffee and is then sealed with an aluminum cover for protection. It works by putting it in a coffee machine which sprays hot water through the aluminum foil and then pierces the plastic can at the bottom to collect the hot coffee that comes out of the filter. This makes a perfectly measured cup of coffee that many customers want. The Starbucks K-Cups The concept of the K-Cup was first introduced into the market by a company called Keurig that came up with the K-cup brewing systems. It was the first to make such a system for its coffee but later licensed the use of this system to many other drinks processors (Pride and Ferrell, 2014). Among the companies licensed was Starbucks. The company took up the system STARBUCKS K-CUPS 4 and started making the product for the many different brands of coffee that it offers to its customers. Today, it’s among the most common used methods of making coffee by more than 40% of its customers in its retail shops. The K-Cup brewing system works by making a single cup for every K-Cup that is made. A k-cup is a plastic can that is fitted with a filter inside and is filled with coffee of a certain measurement. The coffee is then sealed with an aluminum foil and this helps to keep the coffee fresh and protects it from both direct moisture and sunlight. This makes sure that it gets to the customers as fresh as possible. The plastic cup is them placed in a coffee making machine where it is pierced at the bottom ant at the top. The nozzle at the top sprays hot water into the can and through the coffee. The water is then filtered by the filter that is fitted within the plastic can and the hot coffee collects at the bottom of the can where it is then sucked out by the second nozzle at the bottom. This nozzle then pours the coffee in to the cup and this coffee is ready to drink for the customers. The KCups are very many and differ depending on the flavors of the coffee that the customer may be interested in as the coffee is sold in many different flavors depending on where the coffee beans were sourced from and nay other additions that may have been made to the coffee. SWOT analysis for the Starbucks K-Cups Strengths Among the strengths that the Starbucks K-Cups have is that they have a large market to sell to. Starbucks as a company operates in very many countries and serves very many customers STARBUCKS K-CUPS every day. The company has operations in six continents and has thousands of stores. This is strength for the company’s products as it will be able to reach a large market hence the possibility for a large amount of sales as opposed to other companies that do not operate in as many markets and have many customers (Verbeke, 2013). Weaknesses What is considered to be the main weakness is the fact that these K-Cups are only used once. They are only used once and more specifically for one cup of coffee. This means that if one wanted to have several cups of coffee at a go, it takes time and a lot of K-Cups to be able to achieve this. It is also a process to keep changing the k-cups one after the other until you are done preparing all the coffee cups required. It would be better if there were k-cups that could be used to make more than one cup of coffee while maintaining the same high quality. Opportunities The main opportunity is that in many places, this is still a new idea. This means that many of the people are yet to accept this new method of making coffee. This is particularly true for the markets outside of North America. Huge numbers of the general population in the developing world have additionally not taken up the idea and this is an open door for the organization to have the capacity to build the offers of the k-cups. By introducing them to the market, they will be able to increase their sale in these new markets. Threats Among the threats that are being posed in the sale of the k-cups is that other companies that also specialize in the sale of products packed in the same manner are also expanding their 5 STARBUCKS K-CUPS 6 presence in different markets. This means that Starbucks is likely to face a lot of competition for the same market and products that are almost the same in the near future. This is a threat because it may lead Starbucks losing market and may also see them reduce the revenue that they may be getting. This in the long term is a threat to the company’s performance. Competitive analysis of the organization and offering In the current market, there are several companies that are actively offering the same products though under different brands. This means that there is competition for the same market. The main market in this case is the American market where there are many coffee houses that are offering the same product. The international market is not left out as there is considerable competition from companies that have also been licensed to use the technology for their products. The following is the competitive analysis of Starbucks k-cups compared to the other competitors k-cups. The first in the analysis are the things that the company is able to do better than the competitors do. The main item that Starbucks has as an advantage hear is the fact that it is located in a very large geographical area. Starbucks operations are found in very many countries and hence they have a large market to serve. This is an advantage that they have over their competitors as it enables them to be able to make more sales to these markets as compared to their competitors who have limited market access (Michelli, 2014). On the things that the organization does as similarly as the contenders, prices are first on the rundown. The costs of the vast majority of the k-cups are just about the same in numerous spots. This is regardless of the distinction in the brands and additionally the produces. This is essential to note since it implies that none of the contenders have favorable position with regards STARBUCKS K-CUPS 7 to the pricing of the products. This implies the clients settle on their choice taking into account different elements that don't identify with the cash utilized. The nature of the item is likewise just about the same for the majority of the cafes and this additionally applies on account of the KCups. Lastly, on the items that the competitors do better than Starbucks, the main item is service quality. As a result of Starbucks being a big organization, the company has a good reputation for its products and this means that it has a lot of customers. Serving these many customers may lead to them not giving them the best service possible as it is done quickly to create time for the others. In perspective of this, a portion of the contenders have little operations in a portion of the locales and this makes it workable for them to offer their clients better client services as opposed to Starbucks. This is a factor that the company should consider and improve on. Target market The target market of Starbucks K-Cups is divided into three main groups. The first of this are the adults. They are mainly people which are aged between 25 years and 50 years. These people from the majority group of people that purchase star bucks products. They are mainly in the working class and often have to rush in having their meals and breakfast and Starbucks provides healthy snacks and drinks which these group of people are willing and able to purchase for their consumption. They form the largest market of about 49% of the total. The second group is the young adults. These are people that are mainly aged between 18 years and 24 years. The largest population of these people is found around campuses where most of them are completing their courses. The company places it stores in areas that are accessible to STARBUCKS K-CUPS 8 this group of people so as to attract them to make purchases for their daily meals as well as snacks for their consumption. They have a huge appetite for coffee and this can easily be solved by the use of such K-Cups. Lastly, the company’s third target market is the largest consumers of their products. This included places like hotels and restaurants. These are businesses that make purchases in bulk for them to use them in serving their customers. They also take a huge percentage of the sale of KCaps specifically among the products that Starbucks offers to them. This is on account of they are anything but difficult to utilize and they ensure that every client feels that they are dealt with extraordinarily and this implies they get the chance to make more offers of the Starbucks k-cups items. Needs that cause target market to buy For many of the adults, they make the purchase as a quick snack that they can take while doing other businesses. They also take this as breakfast on their way to work in the morning. The young adults are on the other hand consumers on the Starbuck K-cups because they also need a snack that is healthy as opposed to consuming many of the fast foods. This coffee is drunk with other items like cakes or doughnuts and this makes the K-Cups to be a perfect snack for consumption by many of the people. The hotels purchase them as a product that they need to sell to their customers as well. Positioning statement Better than just coffee for all. STARBUCKS K-CUPS 9 References Verbeke, A. (2013). International business strategy: Rethinking the foundations of global corporate success. Michelli, J. A. (2014). Leading the Starbucks way: 5 principles for connecting with your customers, your products and your people. STARBUCKS K-CUPS Grant, R. M. (2016). Contemporary strategy analysis: Text and cases. Pride, W. M., & Ferrell, O. C. (2014). Foundations of marketing. 10
Purchase answer to see full attachment