Marketing Management Orientation Relevant to Starbucks

Factors such as production capabilities, sales targets, customer needs and societal needs determine the marketing processes that an entity engages in. For Starbucks, a marketing orientation would help it achieve sustainable growth. The marketing-orientation concept argues that “the social and economic justification of an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objectives” (Lamb, Hair & McDaniel 2007, p. 8). Starbuck should thus embark on marketing activities defined by its customer needs as argued subsequently.

Starbucks’ marketing process should be defined by its customer needs and wants. This is because the entity’s market share is based more on the experience customers derive from patronising its shops than its core product (coffee servings). This is for instance evident from the unfavourable performance that resulted from a watered-down experience following a period of overexpansion between 2007 and 2008 (Economist 2008; Starbucks Corporation 2009). Due to overexpansion, the entity had lost its focus on bettering customer experience thus losing out customers to competitors such as Dunkin Donuts that offer reasonable coffee at lower prices (Economist 2008). Following dismal performance, Starbucks had to revert to its focus on customer experience to regain its market share, through changes that involved the return of Howard Schultz, the entity’s founder CEO, to the CEO’s position (Economist 2008). The returned focus on bettering customer value resulted into increased revenue in the 2009 financial year, despite the economic challenges in countries where the entity conducts business, which had lowered the purchasing power of the entity’s customers (Starbucks Corporation 2009).

Starbucks also needs to follow a marketing-oriented strategy since its core product is not a necessity. For instance, coffee has substitutes such as tea that may negatively influence its sales. Additionally, customer trends towards consumption of healthier foods (Starbucks Corporation 2009) could affect Starbucks sales if it does not adapt to such changes. To ensure that it remains responsive to changing customer needs and wants, Starbucks should thus follow a marketing-oriented strategy to manage its marketing activities. For instance, the entity recorded positive results with its strategy to introduce healthier offerings in line with the changing consumer preferences. Through a market-oriented strategy, Starbucks would also gather information about its competitors thus improve its services to justify its premium-pricing strategy (Lamb et al. 2007).

References

Baird, CH & Gonzalez-Wertz, C 2011, ‘How top performers achieve customer-focused market leadership’, Strategy & Leadership, vol. 39, no. 1, pp. 16-23.

Barnes, JG 2003, ‘Establishing meaningful customer relationships: why some companies brands mean more to their customers’, Managing Service Quality, vol. 13, no. 3, pp. 178-186. doi:10.1108/09604520310476445.

Economist 2008, ‘Coffee wars: Starbucks ousts its boss and brings back its founder as a new threat emerges’, 10 January, viewed 14 August 2011, < http://www.economist.com/node/10498747>.

Lamb, CW, Hair, JF & McDaniel, C 2007, Marketing, 9th edn, Cengage Learning, Mason, OH.

Starbucks Corporation 2009, Starbucks corporation fiscal 2009 annual report, viewed 14 August 2011, <http://media.corporate-ir.net/media_files/irol/99/99518/SBUX_AR.pdf>.

—– 2010, My Starbucks idea, viewed 14 August 2011, <http://mystarbucksidea.force.com/>.

‘Starbucks – taking on the world’ 2004, Strategic Direction, vol.20, no.7, pp.13-15.

 

 

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