Marketing Plan Final Paper Executive Summary Struck is a dominant company based in the United States founded in 1971. After the current chairman Howard Schultz take over the business, Struck started to introduce specialty coffee beverages, food and entertainment product. In order to stabilized their position in the industry, identification of strengths and weakness, ability to define new opportunities as well as being aware of possible threats become essential. Struck adopted the Societal Marketing Concept with the goal of not only deliver great customer value but also produce benefits to the communities and environment.
Struck offers mainly coffee beverages supplement by pastries, sandwiches and cakes. However, what Struck really want to offer is the Struck experience of meeting great employees, first-rated music and a comfortable meeting place to relax. Being in the specialty coffee sector, their target segments are mainly families, teenagers and working force with higher purchasing power. It is important to understand their needs and cater to their demands in order to deal with competition in the market. The main competitors of Struck are Coffee Bean and ETC.
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To nominate, it is critical to identify their goals and strengths before designing market strategies based on 4 main factors – Price, Place, Product and Promotion. However, every marketing strategy has its strengths and weakness. Struck need to identify it in order to maximize profits and minimize risk. Company Profile of Struck Struck Coffee Company is a dominant multinational coffeehouse chain based in the United States first founded in 1971, opening their first store in Cattle’s Pike Place Market.
The key person who brought Struck to where it is today is none other than the current chairman of the corporation, Howard Schultz. He Joined the company in the early sass when Struck was already a respected local roaster and retailer of whole bean and ground coffee. Inspired by the rich tradition of espresso beverage through a business trip in Italy, Howard purchased Struck with the support of local investor in 1987. This marked the beginning of Struck selling coffee and tea beverages, food and entertainment products through its specialty operations.
With Struck chain stores being company-operated, it works with carefully chosen businesses to operate licensed stores in a variety of venues. It enabled their customers to enjoy the convenience of having a nice cup of coffee in hotels, shopping malls, noble bookstores and food service venues around the world. Besides being committed in bringing value to their customers, Struck are convinced that it is possible to do well and contribute at the same time by producing social and environmental benefits to the community, the Struck foundation for instance.
Due to the company’s effort in accomplishing their mission and meeting their objectives, Struck became one of the most respected brands in the world with more than 14,000 stores in 42 countries generating revenue of more than 7 lion annually. The SOOT Analysis of Struck Corporation Strengths of Struck Global presence and renowned brand Without doubt, Struck has been a highly respectable brand and dominating the industry of its own expertise.
Over the years, Struck has been putting a lot of effort in expanding their business locally and globally creating brand awareness among target customers around the globe which eventually gave them the advantage of widespread global presence. Currently, the company operates about 14,000 retail store locations, these chain stores are company owned and operated across 42 countries worldwide. This initially provides Struck widespread brand recognition and having a strong and stable customer base.
Being a disciplined innovator Struck is devoted in exploring innovative products researching the latest trend in ten market Ana came up WI TN Adulators Tanat will Transliterate teen wilt competitors. This effectively generates consistency in same store sales as customers are constantly provided with variety of choices and innovated products that will ignite their interest to visit the store again. Recently, Struck also introduce new flavors like Toffee Nut Latte, Mocha Praline and Peppermint Mocha Fractions respectively available in iced and hot versions.
Struck ability to roll out new products in a relatively fast rate is a considerable competitive advantage for the company. Ability to create a great shopping experience When visiting a retail store of Struck, the customers are not only ensured to get beverages and food with the finest quality, they are greeted by friendly workers, enjoying first rate music and indulging themselves into a comfortable environment with great ambiance designed to be cozy and intimate Just like home. My recent visit to their store Justified the above strengths as I was greeted with a big smile and they re happy to modify my Mocha according to my preference.
The wooden tables and armchairs gave a soothing and peaceful atmosphere with reading material that will not keep you bored. Weakness of Struck Reliance on US markets Being headquartered in the United States, Seattle, apparently statistics has shown that approximately 85% of its revenue is generated from its domestic US market. However, being an international brand with wide global presence and ranging operations, they should look into earning higher proportion of profits outside the United States.
Starboard’s reliance on the US market may backfired and affect its overall performance should the retail stores in US under-perform due to economic conditions or increasing competition within the country. Reliance on beverage innovation Struck has reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter overtime. Struck store sales growth has been largely driven by beverage innovation however not all innovations could be popular among consumers.
Diminishing return from beverage innovation, one of its competitive edges would have significant adverse effect in terms of performance. Problems in some international performance Struck has been facing several difficulties in some of its international performance. I nee Tack problems AT expansion wilt a under AT openings Totaling to be successful. It experienced sales sluggishness in its Japanese operation. Struck also created controversy when they launched a new chain store in the former imperial palace in Beijing.
The protestors objected the presence of American chain in this location thinking that the store was trampling on Chinese culture which led to the closure of the store. This has adverse effects on the image of Struck affecting heir international operations and dragged down growth prospects in the region. Criticisms and controversy In recent years, Struck has been regarded by the anti-globalization movement. Several activist groups maintain websites criticizing their policies, labor relations and hold it as a prime example of U. S cultural and economic imperialism leading to several store locations being vandalized.
This certainly has negative effects on their reputation and confidence of customer may be banished thus possibility of declining sales. Opportunities of Struck Growth in coffee market According to research, specialty coffee sector accounts for approximately 15% of retail coffee market worth 21 billion. Anticipated growth in this sector meaning with Struck dominance in terms of market share in this particular category will offer the corporation larger opportunities for further growth and expansion in the near future which provides company strong revenue potential.
Growing economy In the new century, the populations are more affluent and educated. They would not hesitate in spending their income on pleasure. Their willingness to pay for greater service and coffee beverages as well as pleasant shopping experience opens the opportunities for Struck to attract more customers. Market emergence and expansion New markets for coffees such as India and the Pacific Rim nations are beginning to emerge. There are also major expansion potential in China being the next big international opportunity with its largest population, rising economy and increment in coffee consumption.
This further enhances the opportunity to further engage in global expansions and increasing market share in one of the largest market, China and India for instances. I nearest AT stardust’s Volatile Coffee Market Supply and prices of coffee has been experiencing high volatility. Struck are exposed to risks faced by coffee producing countries including weather, political and economic conditions which may affect the company’s business to a certain degree. The actions of associations influencing prices of green coffee through restricting global coffee supplies could cause disruptions to Struck operation.
Competition in the industry Global coffee market is a very competitive sector, and Struck must compete against the likes of restaurants and coffee shops. There are possible threats whereby competitor with greater financial and operating resources entering the market and moment directly against the company. With the specialty coffee market growing, firms will be looking to enter the market to challenge Struck. Rising diary costs Struck faces the threat of rising diary costs with prices raised significantly and adversely affect Struck margins especially when diary products are its core ingredients.
Milk and diary products represent between 3% and 5 % of sales, sustained increase in prices could increase the production cost. Other leisure activities Specialty coffee may not stay in favor with customer especially with the Y generation looking for more exciting activities. There is also possibility that another type of beverage or leisure activity will replace coffee in the future. Currently, this threat may be low but everything is possible in a high technological world and preference of population sifts.
The Marketing Philosophy and offer of Struck After analyzing the business operation of Struck Corporation, I concluded that the marketing philosophy of Struck will most probably be Societal Marketing Concept. The societal marketing concept calls on marketers to balance three considerations when defining their marketing strategies. They are the interest of company itself in arms of profits, consumer wants and the welfare of society. Stators Ks corporation NAS always Eden ovate In Drilling tenet Dustless to ten next level through aggressive expansion strategy.
It opened more than 14,000 stores worldwide in 44 countries. This is the main reason for the company’s strong growth and strong financial results in terms of revenues. In fact, their revenues have been increasing significantly every year. They are planning further expansion to large markets like China and India which will bring them extra sales in the near future. Although Struck engaged in expansion at a fast rate, they ensure the consistency f quality products and services in every retail store.
They are committed in providing a variety of choices for consumers. All the coffee beverages are made from highest quality Arabica beards with selection made by the coffee buyers of Struck. Struck also constantly explore new innovations beverages providing new kind of taste for customers as well as creating non-fat and low-fat beverages to meet the needs and wants of healthy conscious people. One of their trademarks worth mentioning will be their “you-call-it” culture allowing consumers to specify all modifications to the drinks.
Struck is aligned with its objectives of establishing the value of buying a product from its stores by uncompromising quality and building a rapport with every single customer. Struck is dedicated to contributing positively to the communities in which it does business. The company believes that investing in communities is not only the right thing to do, it is part of their culture and they strive to be active contributor in communities. Struck take important measures to help improve lives of coffee farmers and protect the environment where they grow their beards.
They are also omitted in reducing waste from operations and supporting the importance of recycling to minimize environmental impact. It believes that it can contribute to the communities by encouraging their partners to become responsible neighbors and active participants in the places we live, work and play. One example will be the Christmas Holiday Cheer. Struck make it a priority to show appreciation for its partner by providing them with great work environment and treat them with respect and dignity. The main marketing offerings will be their line of coffee beverages prepared by hand.
This includes the Espresso and coffee classics, Fractions Blended beverages and Taco teas. It also offers fruit Juice and sodas for children or customer that prefers non-caffeine drinks. Struck supplements these offerings with pastries, unique cakes, salads and cold sandwiches. It also offers consumers with a more enjoyable at- home coffee experience with coffee merchandise and at-home brewing equipment, offering colorful tumblers for busy drinkers to enjoy Struck coffee anytime anywhere, extreme tumblers Ana stainless steel mugs Tanat can retail notes Tort hours for adventurous and serious coffee drinkers respectively.
Unique confections and other coffee and tea related items such as exclusive coffee beards and powder are being offered. The company doesn’t Just offer coffees, it sells the Struck experience. They fulfilled not only the bellies, they believed in fulfilling the souls of customer through quality service by friendly salesperson and a peaceful environment with great ambiance for people to do what they likes. Struck also offer customers opportunities to discover quality entertainment in a convenient way as part of their daily coffee routines by selecting the finest music, books and magazines in every store.
IT wants every customer to think of not only coffee but also a memorable experience when they see their brand. Target customer segments and their needs and demands The target audiences of Struck are mainly divided into three different segments. They are mainly families, young students and teenagers as well as busy working people and executives. Families usually consists of young children, the adults need a safe environment so that they can enjoy their tea-time without fears of children getting injured. Non-caffeine drinks would most probably be the choice of families for their children.
They would prefer a cozy ambiance Just like home for them to talk and enjoyed their food at the same time. To cater to this group of customers, Struck create an environment with comfortable sofas and armchairs to create the cozy and intimate feeling as well as chairs specifically designed for young toddlers. In their menu, they include non-caffeine drinks such as Juices and sodas, meals designed in a creative way to increase the appetite of children. The workers are always ready to attend to their special needs and ensuring children are safe. The other main target segment would be students and young teenagers.
These are a munch of customers who are constantly looking for innovations and interesting new products. They are willing to pay more as long as the products and services meet their expectations. For students, they will probably need a place quiet away from home where they can relaxed and discuss schoolwork together. They would most probably demand more of ice-blended beverages which gave a sweet and pleasant flavor rather than traditional coffee. They would also want an environment with first-rate music and a upbeat meeting place which will be a suitable after school hangout with friends.
Struck constantly introduced innovative products for a retain period of time such as creative flavors in their line of ice-blended beverages. There are popular tracks played in the stores as well as latest magazines from different genres. There are meeting rooms table for students to do their homework while enjoying their beverages. E as target segment will De ten Dust working people Ana executives. I nee lead a fast-paced life and cannot possibly spent a lot of time waiting and slowly enjoy their coffee or food. Convenience and efficiency of service will probably be what they need most.
However, they are also a bunch of educated and high-income group that will eave high expectations on the products and services. They are willing to pay as long as every penny is worth. Struck introduce the to-go tumbler which is a personal cup which will keep the beverage hot and fresh as you travel. There are also mugs which can keep beverage hot for hours if executive cannot finish it on time. Creating a quiet and peaceful environment enables them to work on their documents and availability of quick lunch on their menu like cold sandwiches and toasts.
Competitor Analysis of Struck Struck position itself in the specialty coffee sector in the market. In my opinion, he major competitors of Struck would be companies that satisfy the same customer needs as well as offering products that are close substitutes to the main product line of Struck. I thought 2 of the most major competitors of Struck that emerged will be The Coffee Bean and Tea Leaves and the ETC coffee connoisseur. Struck is a close competitor with these 2 companies as they all focus on selling top-quality coffee beverages with premium pricing. They aimed to give customer a prestigious feeling and high-end leisure.
The strongest competitor will be The Coffee Bean and Tea Leaves; it is a Los Angels, California-based coffee chain. It is very similar with Struck in terms of market offerings in many aspects. Similarly to Struck, the layout and design of their stores is created in a cozy and soothing manner together with romantic ambiance through the use of wooden chairs and coffee table as well as big armchairs and sofa. Their main product line is also coffee beverages consist of traditional classics like espresso and Latte as well as Ice-blended Fractions supplement with pastries and cakes.
One of their strengths to differ themselves from other coffee chain stores would be heir broad selection of tea drinks. They offer distinctive and unique flavors of teas from different countries. Addition to that, their selection of whole leaf tea bags for sale is designed to enable maximum flavor infusion. Instead of focusing on creative innovation beverage, the strategy they adopted is more prone to discover richer aroma and distinct flavors within their line of coffee beverages. Unlike Struck, it has fared fairly well in its entry into the Israeli coffee chain market attributed to its kosher food selection.
No doubt, Coffee Bean has strength and more than average opportunity to improve its position. I nee toner reputable Dragon will De ten coffee connoisseur (l c) It Is ten leaning purveyor of gourmet coffees in Singapore. It is of a less threat as compared to Coffee Bean as currently the expansion of their outlets are still within the region, thus not influential in terms of brand awareness. However they are reputable in offering extensive range of exclusive top-quality coffees using quality techniques.
Some of their unique strengths will be they fully focus on gourmet coffees with over 60 types of coffee beverages which initially meet their selection unsurpassed. Their menu is comprehensive whereby consumers have choices of simple snacks up to 3-course meal. This is not available in both Struck and Coffee Bean. Moreover, each of their boutique cafe??s has its own unique ambiance which one can be stylish while the other could be hip and trendy. They create different ambiance for different kinds of customers combining art and lifestyles.
Both brand definitely are strong competitors that have their own expertise in order to stand firmly in the specialty coffee sector. In order to prevent being replaced in the future, Struck has its own strategies in leaning the competition. Struck set a competitive edge over the other 2 brands through expanding the total market and protecting their market share by launching chain store worldwide so much rapidly. Struck also keep up with their main strength of exploring creative beverages as well as maintaining the quality of their line of coffee beverages.
Besides that, Struck enhance customer’s convenience by offering wireless surf zone that allows customer to surf the internet with own portable devices while enjoying their beverage. Struck continue to build goodwill and create a good brand image by Ewing very involved in social responsibility in their business by being supportive towards recycling and taking care of the welfare of the community. Marketing Strategies adopted by Struck Product and Service offerings Struck Coffee uses a differentiated strategy in terms of product offerings.
Struck has always been complimented in their ability to explore innovated beverages. It differs itself by constantly adds unique flavors of beverages other than coffee into their menu providing consumers with a variety of choices. They positioned their product as an affordable luxury which can be modified according to personal reference of customers. Seasonal beverages are also introduced during festivals. They not only sell top quality coffee but also focus on selling customers the Struck experience and the concept of bringing romance and fresh flavor back to the brew.
As for services, Struck adopted the strategy of being very customer oriented. They Nile ten most talented people Ana trainee teen to offer enlighten standards AT service during the process of consumers purchasing from Struck. It pays close attentions in building long term relationship with each and every customer through support by employees that are willing to go the extra mile. Pricing strategies Struck offer premium priced beverages with each at least $4 and above. Basically, Struck adopted a value-based pricing strategy whereby it set the prices based on customer’s perceptions of the product value.
Since Struck position itself as a premium and prestigious brand, customer’s perceived value of their product are higher due to the perception of higher quality of coffee and excellence in service. According to these perceived value, Struck set its price in a way that every penny spent are of value to the customer. Struck also adjust their basic price which we call it the discount and allowance pricing sometimes to retain existing customer base and attracting new customer.
They gave price reduction for loyal customers and discounts during launching of new products occasionally. Distribution of products In terms of distribution, Struck adopted an aggressive expansion strategy. It is committed in bringing their retail stores regionally and globally with more than 14,000 coffee chain stores in 44 countries. It focuses its company-owned operations at high-traffic and high visibility areas such as retail centre, office buildings and university campuses. These strategic locations provide customers with accessibility and convenience.
Besides that signing of agreements with chosen companies allows Struck to operate stores in noble bookstores, hotels and shopping malls. They also make alliances with companies in distributing bottled coffee with the label of Struck distributed into convenience stores and supermarkets. Promotions and advertising Struck basically promotes their products through posters and signage in every retail stores. Instead of Television advertising and flyers, being social responsible is rover to be a powerful communication marketing tool for Struck.
It helps in conserving the environment and contributing to communities, and at the same time creates a great brand image. Customers are aware that they could also play a part in contributing by purchasing from Struck. In addition to that, Struck intents to build up reputation by establishing charity foundations and sponsoring community programmer, it is a strategy of relying on word-to-mouth promotion. It also relies on its customers and employees to spread the word and promote for the company through excellent service and benefit programmer respectively.