Starbucks Canada

Starbucks Database Marketing Plan

Prasad Venkittathodi | Vaibhavi Prajapati

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Starbucks Canada || Database Marketing Assignment ||

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History

The first Starbucks was opened in Seattle, Washington, United States of America on March 30,

1971 by three partners Jerry Baldwin (English teacher), Zev Siegl (History teacher) and Gordon

Bowker(Writer). Entrepreneur Alfred Peet inspired all of them to sell high quality coffee beans

and equipment. The name is taken from Moby Dick, after Pequod was rejected by one of the

co-founders, the company was name after the first mate on the Pequod, Starbuck.

The first Starbucks Coffee store in Seattle`s Pike Place Market

Canada Timeline

1987

Starbucks opens its first international location in Vancouver, British Columbia at the Seabus

Skytrain Station.

1995

Starbucks forms an alliance with Chapters Bookstores in Canada, creating what will eventually

become the ultimate Canadian book and coffee lover’s experience.

1996

In January, Starbucks opens for business in Toronto, Ontario, with five stores opening their

doors on the same day.

1999

In April, Starbucks opens its first location in Saskatchewan, Canada.

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2000

In July, Starbucks signs the Eastern Canada Master Licensing Agreement with Café Vision

International to open stores in Quebec and Atlantic Canada.

2001

Starbucks Coffee Canada incorporates as an independent, 100% wholly owned subsidiary of

Starbucks Coffee Company.

2002

Starbucks opens its Canadian Regional Support Center in North York, Ontario, establishing a

Canadian management team.

2004

Starbucks begins offering whole bean and ground coffee in Canadian supermarkets.

2005

Starbucks Coffee Canada celebrates the openings of its 400th Company-operated and 100th

licensed locations.

In February, the Starbucks Duetto Visa card is launched in Canada, in partnership with RBC

Royal Bank.

2006

Starbucks Coffee Canada celebrates the opening of its 500th Company-operated location.

Report on Business ranks Starbucks Coffee Canada #1 in the foodservice category in its Annual

CSR Ranking report.

In January, the second annual Lattes for Literacy Day is held in Canadian stores, raising more

than $300,000 for Canadian literacy charities Frontier College and ABC CANADA Literacy

Foundation.

In April, Starbucks Coffee celebrates their first Tumbler Day in Canada by providing

complimentary brewed coffee when customers use a travel mug to help reduce paper cup

waste in celebration of Earth Month.

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2007

In March, Starbucks celebrates its 20th anniversary in Canada.

2008

In July, Starbucks forms a partnership with the Vancouver Community Foundation, the largest

and oldest community foundation in Canada, to help administer Shared Planet Youth Action

grants and develop relationships with social entrepreneurship organizations.

In August, Starbucks and the Vancouver Community Foundation administer $25M to Schools

Without Borders.

In August, Starbucks Coffee Canada regains full ownership of the Coffee Vision International’s

Starbucks Licensed stores in Quebec and Atlantic markets.

2009

In January, Starbucks and the Vancouver Community Foundation administer an additional

$100M in Youth Action Grants across five organizations including Jane Goodall’s Roots and

Shoots, Ashoka Youth Venture, Green Street Youth Action Centre, Canada World Youth and

Katimavik.

In February, Starbucks Coffee Latin America and Starbucks Coffee Canada join together as

Starbucks Coffee Americas, under the leadership of President Colin Moore.

In June, Starbucks Corporation is named as one of Jantzi-Maclean's 50 Most Socially

Responsible Corporations, and as one of The Best 50 Corporate Citizens in Canada by Corporate

Knights.

2010

In January, Starbucks Coffee Company is named one of the Global 100 Most Sustainable

Corporations in the World by Corporate Knights.

In February, Starbucks Coffee Canada is named one of Canada’s 10 Most Admired Corporate

Cultures by Waterstone Human Capital.

In May, Starbucks Canada opens its first-ever LEED-registered store as part of Starbucks’

worldwide LEED pilot project. Located at Bathurst and St. Clair in Toronto.

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In June, Starbucks Coffee Canada is recognized as one of Canada's Top Employers for Young

People (2010) by the Globe and Mail, and as one of The Top Foreign Corporate Citizens in

Canada by Corporate Knights.

In July, Starbucks launches a national partnership with Evergreen with the Pledge to do some

Green Facebook initiative.

Also in July, Starbucks Canada begins offering free, unlimited Wi-Fi to customers in all company-

operated stores.

In October, Starbucks Canada introduces the Clover® brewing system in the Britnell Books

Starbucks location at Yonge and Bloor in Toronto, and at the Robson Street store in Vancouver.

2011

Toronto and Vancouver are selected as two of seven global locations for marquee events to

help mark Starbucks’ Global Month of Service. Canada hosts an additional 85 local community

service projects across the country in April 2011.

In the same month, Starbucks Coffee Canada helps to pave the way for all coffee houses in

Vancouver to offer cup recycling across BC by collaborating with waste management companies

to make cups a recyclable item.

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OUR STARBUCKS MISSION

To inspire and nurture the human spirit— one person, one cup, and one neighbourhood at a time.

Here are the principles of how we live that every day:

Our Coffee

It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans,

roasting them with great care, and improving the lives of people who grow them.

We care deeply about all of this; our work is never done.

Our Partners

We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves.

We always treat each other with respect and dignity. And we hold each other to that standard.

Our Customers When we are fully engaged,

we connect with, laugh with, and uplift the lives of our customers— even if just for a few moments.

Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.

Our Stores When our customers feel this sense of belonging,

our stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life—sometimes slow and savoured, sometimes faster.

Always full of humanity. Our Neighbourhood

Every store is part of a community, and we take our responsibility to be good neighbours seriously. We want to be invited in wherever we do business. We can be a force for positive action—

bringing together our partners, customers, and the community to contribute every day. Now we see that our responsibility—and our potential for good—is even larger.

The world is looking to Starbucks to set the new standard, yet again. We will lead. Our Shareholders

We know that as we deliver in each of these areas, we enjoy the kind of success that rewards our shareholders. We are fully accountable to get each of these

elements right so that Starbucks—and everyone it touches—can endure and thrive. Onward.

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Objectives

Starbucks is an American brand following the same traditions all over the world including Canada,

They serve different type of Coffee products, food and drink including serve free Wi-Fi to satisfy growing

customer needs. They have even launched their brand of coffee beans so that the customers can enjoy

the same Starbucks taste at the comfort of their home. Their main objective however will be to provide

most unique coffee experience to their customers

Some of their other Objectives are

a. Starbucks offers new design and concept which makes them the No # 1 choice of their loyal

customers

b. Starbucks have established some unique and innovative strategies to acquire new

customers

c. To maintain their brand image through amazing service and great quality products

Market Plan (Target Market)

Geographic

o Region : Canada

o Area : All

o Density : Mostly urban

o Climate : All Season

Demographics

o Age : 15 years of age and above

o Gender : All

o Income : All walks of life

o Occupation : Any

o Education : Any

o Race :Not Applicable

o Home Owner : Not Applicable

Psychographic

o Personality : Who loves great coffee

o Lifestyle : Healthy and lead an active lifestyle

Behavioural

o Usage Rates : Regular Basis

o User Status : Regular

o Benefits : Great taste, Great service

o Loyalty : Looking for amazing service and great coffee

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Situation Analysis

Company and Product

Starbucks is constantly striving hard to provide customer one stop for unique coffee

experience. The Store are always in immaculate condition and often is place where

people get together for studying or even meet friends. Starbucks is sometimes location

landmark at certain places. Starbucks being an international company has close to

55,000 stores around the world and more than 4000 stores in Canada. The company is

growing tremendously and is now again becoming a market leader with increasing sales.

In past few years Canadian coffee market is growing close to 157 % and new entrants

have limited space to grow, Since Starbucks is an established company in Canada it has

opportunity to increase competition by taking customers from its competitors.

Starbucks is a premium coffee shop with prices sometimes beyond the reach of certain

group of people and now machines are available to make good coffee at home.

Economic conditions have also created lot of issues like increase in oil prices,

transportation prices have increased, as best coffee beans comes from places around

the world such as Africa and South America . Starbucks is still working hard to provide

best consumer experience and great coffee at the best price possible.

Competitive Analysis

Tim Horton’s is one of the biggest competitors in Canada for Starbucks, with Second cup

catching up. Tim Horton is offering low priced coffee in price sensitive market, and

customers who are less knowledgeable about coffee are attracted to Tim Horton’s.

Some new local coffee stores are also threating Starbucks as they would prefer local

shop than driving all the way to some Starbucks coffee shop.

Marketing Strategy

Positioning strategy

Starbucks is expanding in a big way, opening coffee shops in new locations and near

densely populated areas. Starbucks have coffee shops close to malls, retail shops or

even urban business areas so that customers does not have to travel far to get their

favourite coffee. Starbucks logo is one of the most recognizable logo in the world, and

having a Starbucks coffee cup in their hands is a sense of pride for loyal customers who

do not want to be seen with competitor’s products. Starbucks coffee shops are huge,

with great design and proper spacing and always with the smell of freshly brewed

coffee. This helps customers to relax and enjoy their time with friends and family or

even business associates and keep ordering coffee again and again.

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Product strategy

Starbuck have always been innovative with their Products, offering new holiday

packages apart from their regular coffee products, Starbucks have always been

associated with coffee, but now they have also included other products such as

Starbucks coffee beans, coffee maker, frappe, chocolate drinks, sandwiches etc…

In order to maintain high quality and great customer service all the Starbucks are

operated and service by Starbucks partners i.e. Starbucks employees making them one

the largest self-operating coffee shops in Canada and around the world, Since Starbucks

have long term contracts with their partners, prices are always in control. Starbucks is

very lucky for one critical fact – coffee is addictive so sales and customers will always

remain, all Starbucks needs to do is provide customers with customer service

experience and great new products and innovation. Starbucks coffee range includes

espresso and drip brewed coffee including whole bean coffee and beverages including

hot and cold drinks, sandwiches, Panini, pastries and salads. Starbucks also offers

Starbucks card.

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o Some of Starbucks Innovating Product and Offers Advertisement

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SWOT

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Starbucks: Being a Responsible Company Starbucks is a member of the World Cocoa Foundation

Starbucks World AIDS day, December 1

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Compliance of privacy laws and ethical business practices

(all information from http://assets.starbucks.com/assets/sobc-fy09-eng.pdf)

About the Standards of Business Conduct

Starbucks empowers all partners to make decisions that impact our reputation.

Individual actions at work shape how the world views Starbucks, which is why

it’s so important that we each take

How We Treat One Another

At Starbucks we treat each other with respect and dignity. This means that

all partners are entitled to work in an environment that is free of harassment,

bullying and discrimination.

How We Treat Our Customers

Legendary customer service is a top priority at Starbucks. We strive to make every

customer’s experience pleasant and fulfilling, and we treat our customers as we

treat one another, with respect and dignity. This means, for example, that we

never harass or discriminate against our customers.

Diversity

Starbucks actively creates and promotes an environment that is inclusive of

all people and their unique abilities, strengths and differences, and promotes

diversity as a strategic and competitive business advantage for the company.

Workplace Health, Safety and Security

Partners are expected to follow all safety rules and practices; cooperate with

officials who enforce these rules and practices; take necessary steps to protect

themselves and other partners; attend required safety training; and report

immediately all accidents, injuries and unsafe practices or conditions.

Starbucks Quality and Customer Protection

Starbucks commitment to quality means that we take steps to protect our

customers’ health and safety. You can play your part by following all proper

procedures relating to the storage, handling, preparation and service of

Starbucks® coffee and other products; by working to ensure clean, sanitary

and safe conditions in all of our facilities; and by continually exploring ways

to maintain and improve Starbucks quality standards and practices.

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Substance Abuse and Weapons

Starbucks has strict standards regarding substance abuse and weapons.

Partners are not permitted to use or possess alcoholic beverages on company

property, except where alcohol is specifically permitted at a Starbucks-sponsored

social event. An exception applies if your job involves the sale of alcohol, but in

that case, you may not consume the alcohol and must participate in any special

training required for that business

Wage and Hour Rules

Starbucks is committed to following all applicable wage and hour laws and

regulations. To help ensure that all work performed for Starbucks is compensated

correctly, partners compensated on the basis of hours worked must report and

record time accurately in accordance with established local procedure.

Compliance with Laws and Regulations

Starbucks is committed to full compliance with the laws, rules and regulations of

the countries in which it operates. You must comply with all applicable laws, rules

and regulations when performing your duties.

Interaction with the Government

Starbucks is committed to complying with local laws, regulations and codes

and to working fairly and honestly with government officials and others in our

communities. In doing so, our actions must meet high ethical and legal standards.

It is against Starbucks policy (and may be a breach of law) to offer or make a

payment or gift of any kind in order to facilitate a local process or to influence a

local government official.

Sales Practices and Advertising

Starbucks competes on the merits of our products and services in all sales and

advertising. Our communications with our customers or potential customers must

be truthful and accurate. When we say something about our products and services,

we must be able to substantiate it. We sell the quality of what we do; we do not

disparage our competitors.

Fair Competition

Fair competition laws are intended to promote vigorous competition in a free

market. It is in Starbucks best interest to promote free and open competition.

Starbucks must make its own business decisions, free from understandings or

agreements with competitors or suppliers that restrict competition. We consider

compliance with these laws of vital importance.

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Conflicts of Interest

We all must avoid conflicts of interest. A conflict of interest exists when a

personal interest or activity interferes or appears to interfere with the duties that

you perform at, or owe to, Starbucks. A conflict of interest may unconsciously

influence even the most ethical person and the mere appearance of a conflict may

cause a partner’s acts or integrity to be questioned

Gifts and Entertainment

A gift or favour should not be accepted or given if it might create a sense of

obligation, compromise your professional judgment or create the appearance of

doing so. In deciding whether a gift is appropriate, you should consider its value

and whether public disclosure of the gift would embarrass you or Starbucks.

Securities

As a partner, you may become aware of significant and confidential information

about Starbucks business, often called “material non-public information.”

Partners may not buy or sell stock (including by cashless exercise of stock

options) or any other security on the basis of this information. In order to avoid

any potential problems, you should interpret the term “material non-public

information” broadly.

Other Intellectual Property

As a partner, the things you create for Starbucks belong to the company. This

includes inventions, discoveries, ideas, improvements, software programs, artwork

and works of authorship. This work product is Starbucks property if it is created or

developed, in whole or in part, on company time, as part of your duties or through

the use of company resources or information.

Analysis of Consumers

Starbucks store is targeted to consumers from all walks of life, i.e. from 15 years of age and

above, anyone who likes good coffee is welcomed at the store. Everyone is given equal

treatment whether its male or female. Starbucks have also tied with various organisations such

as being associated with World Aids day which creates good faith among buyers. Starbucks have

been foremost in community service and youth program, They have also started Starbucks

Foundation and Ethos Water funds

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Creative elements

Starbucks logo is one of the most recognized logo in US and Canada. Almost everyone in US and

Canada has heard about Starbucks and once in their lifetime may have passed by the store or at

least been in one. Starbucks have been forefront in creating new products for the benefits of

their customers, and they have some signature themes, like the smell of fresh coffee at each

and every Starbucks the same, logo placements, seating arrangement are all the same. This

enables the customer to recall the brands distinctive image.

Database Requirements

Starbucks has its own loyalty card which gives them inside view of their most loyal customers,

and they can always come up with new programs which increases loyalty also allow referrals

which in turn increases customers base with Starbucks

LTV and Referral Program

The Lifetime Value or the LTV of Starbucks customers is shown explained below with an excel

chart

Case: Starbucks does a referral program

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Conclusion

Starbucks Card is one of the best options the company has to increase customer retention and

referral, as seen in above charts and spreadsheets. Acquisition in terms of LTV has a slow

growth; The Loyalty program will give motivation to Loyal customers. As seen in five years the

LTV will increase from $30 to $489. A new customer acquisition is approx. $40 and referral is be

approximately $20 and it is seen that in five years spending some amount on existing will keep

them happy and they in turn will bring in more business

Starbucks can use his referral program to its advantage and increase market share in Canada

and also around the world.

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Appendices

'About us' Starbucks http://www.starbucks.ca/about-us/company-information retrived on

DEC 15, 2011

"Starbucks VIA ready brew hits grocery aisles around the world"

http://news.starbucks.com/article_display.cfm? article_id=436 Sept 07, 2010 retrieved on

DEC 15, 2011

Zincresearch "Starbucks & Instant Coffee: Good Business Strategy?"

http://zincresearch.wordpress.com/2009/10/06/starbucks-

instant-coffee-good-business-strategy/ October 6, 2009 retrieved on Dec 15, 2011

Ethical practice http://assets.starbucks.com/assets/sobc-fy09-eng.pdf

http://blog.kissmetrics.com/wp-content/uploads/2011/08/calculating-ltv.pdf

About us http://www.timhortons.com/ca/en/about/index.html

Starbucks Canada

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