Case for analysis: Starbucks is fast food’s second most known brand with coffee outlets in 78 countries. Consumers generally think of Starbucks as a successful venture anywhere it sells its coffee. But Starbucks has unanticipated challenges in some markets. Taste, the South African brand holder of Starbucks, launched Starbucks coffee distribution in 2016 but reported its operation an unprofitable venture. Taste is considering a new strategy to optimize meeting its markets. For this, you must become an expert on Starbucks, and its South African venture and strategy. Further, you must learn much about the coffee consumer and eventually apply and suggest strategies that help Taste to succeed.
The task is to explore the shortcoming of Starbucks in South Africa. Name and describe in depth at least three major contributor/reasons for the lack of success and suggest an alternative strategy to the Brand holder.
Follow this outline exactly by using the section headings below and address every point!
- Starbucks in South Africa: Describe the general marketing situation Starbucks faces in South Africa! Use facts to highlight the problem and name three preliminary reasons for failure in South Africa. (5 points)
- Environment: Describe the marketing/business environment Starbucks faces in South Africa! This includes ‘painting’ a picture of the (a) economic landscape, (b) offer basic consumer facts, (c) describe the political and regulatory climate. Utilize facts, numbers, and percentages to explain the situation objectively. (20 points)
- Cultural Influences: This section must describe the cultural forces at play and mainly the consumer culture around coffee consumption. Describe the forces affecting coffee consumption in SA for example, What, Where, When, How coffee is consumed. You must offer detail on how coffee is consumed i.e. is coffee a means to socialize of for pure “energy”. What type of coffee is preferred? In other words, describe all details around consumption of coffee. These details of coffee consumption are important for your segmentation an must be considered in our segmentation analysis below. Offer facts and statistical data like percentages etc. (20 points)
- Hofstede Dimensions: go to https://www.hofstede-insights.com/product/compare-countries/ and select South Africa and the United States; describe basic differences between the two countries on dimensions . Next select ONE dimension that you see as relevant for Starbucks’s marketing effort to consider. Explain! (10 points)
- Entry Mode Selection: Describe the method of entry Starbucks utilized in South Africa? Compare this method to one other possible methods of entry in terms of control and risk over the marketing mix! Please revisit the section of Method of entries to explain in marketing terms. Make sure you understand your method before you write. (10 points)
- Market segmentation and target market: Conduct an STP analysis. (S) This means you must perform a segmentation analysis based on market knowledge you acquired. In an ideal case you would integrate knowledge from findings on consumer culture. Revisit the section on Segmentation. You can use a pie chart or other to visualize the market segments and briefly describe each by its segmentation criteria. (T) Next, select one or more targets and describe your target market in your country and give a logical explanation for selecting this target market. Describing Starbucks target market(s) purely based on age and income is too simplistic. You must go deeper. (P) Briefly and with few sentences offer a possible positioning for Starbucks in your respective target markets. (20 points)
- Conclusion: Conclude and summarize your suggestions (5 Points)
- References: use proper references in APA style. Include at least 5 references from reputable and reliable sources. I.e. pasting a web link will not count. (N.d.) references may be used but do not count. Use in text citations! (5 points).
