Introduction Since its' 1992 IPO, Starbucks has continually focused on growth.

Initially, the growth was targeted to enable Starbucks to achieve their goal of becoming the leading North American retailer of specialty coffee. The early success they achieved resulted in Starbucks expanding their original goal to that of becoming the most recognized and respected coffee brand in the world. By way of example, this case study focuses on a request by McDonalds to serve Starbucks coffee at its' restaurants in order to discuss the marketing strategy and the underlying competitive premise that Starbucks has adopted to achieve both of their goals. The study also describes the role the internet potentially can play in developing Starbucks as a global brand. Background In 1994 the growth rate in US domestic specialty coffee consumption was 15 percent per year, while the growth rate of the overall US domestic coffee market was essentially stable. Although there was no precise definition on the distinction between specialty and basic coffee, it was generally argued that specialty coffee was of a higher quality. The increase in specialty coffee consumption was believed to be the result of four consumer trends : 1) the adoption of a healthier lifestyle had led North Americans to replace alcohol with coffee; 2) coffee bars offered a place where people could meet; 3) people liked affordable luxuries and specialty coffee fit the bill; and 4) consumers were becoming more knowledgeable about coffee. As Starbucks drove to achieve their goals, they developed their marketing strategy in response to these trends. The brand they would build as a result would then be leveraged to enable them to grow on a global scale. Starbucks Strategy In their quest for growth, Starbucks initial focus was on becoming the leading retailer of specialty coffee. Howard Schultz, Chairman and CEO of Starbucks, wanted to achieve this goal by creating the "Starbucks Experience". Specifically, the vision was to create more than just the store to purchase specialty coffee, the intention was to develop "a kind of third place' where [people] can escape, reflect, read, chat or listen." The brand Starbucks was focused on building was retail based and centered on the place and the experience. The Starbucks growth plan was centered on developing an integrated supply chain, developing a quality brand that could then be leveraged and upon entering the grocery channel. Quality brand Starbucks developed propriety roasting curves and technologies such as the one way valve on the bags used to store roasted coffee in order to ensure a consistent, quality product. By adopting practices such as stringent acceptance sampling of the coffee beans, maximum shelf lives for the roasted product and engaging in employee training, Starbucks was able to establish high product quality standards. The quality of brand was extended in the merchandising that Starbucks engaged in at its' retail outlets. Only high quality merchandise was allowed to be associated with the growing Starbucks brand. Integrated supply Historically, specialty coffee companies dealt exclusively with coffee exporters and it was common for the coffee to change hands as many as five times before it reached the specialty coffee seller. Starbucks purchased their specialty coffee on a global basis as a hedge against failure of the coffee crop in any one region. The supply chain that Starbucks developed was used to serve the retail stores, specialty and wholesale markets, the mail order business and the grocery channel. Global growth would require expansion of the network and balancing of resources. By coupling an accurate forecasting process with a fully integrated manufacturing and distribution process, Starbucks was able to achieve near just in time supply to it outlets. The grocery chain Although the entrance into the grocery chain was not critical to achieving their goal of becoming the leading retailer, Starbucks chose to enter the market in order to gain increased sales of specialty coffee for the home. In 1996, 86 percent of specialty coffee consumed at home was purchased from the grocery channel while specialty stores accounted for 19 percent. It was forecasted that by 1999, the model would change significantly, with 54 percent of the specialty coffee for homes being purchased from specialty stores. The retail stores were the fundamental growth vehicle for Starbucks. Investment in the specialty stores and wholesale

operations allowed for revenue growth and increased name recognition. The mail order (Encore) side of the business was used to boost sales and to widen consumer product exposure. All of these activities served to establish the brand of a quality domestic retailer of specialty coffee. To become the most recognized and respected global coffee brand would require Starbucks to leverage their size and brand. Brand Extensions Starbucks entered into partnerships with Dreyers' Ice cream and PepsiCo to develop and deliver brand extensions. The contribution to 1999 revenues was estimated to be $15 million on total retail revenues of $501 million. The extensions were intended to deliver a new customer base and to reinforce the premium quality image. Global markets Starbucks intentionally chose to be first to enter the global markets in order to reduce encountering competition. The first global market targeted was the Pacific Rim. Starbucks forecast that sales would grow from $9 million US annually in 1997 to $150 million US annually by 2000. Competitive premise The establishment of an integrated supply chain on the scale that Starbucks targeted ensured that suppliers of quality coffee became preferred partners. The goal of doubling their sales volume over 3 years resulted in Starbucks developing propriety blending techniques. The use of blends to achieve the same flavor profile would enable Starbucks to ensure supply even if faced with failure of specific coffee crops and would also enable Starbucks to balance costs. The ability to provide alternative mixes to achieve the same flavor characteristics provided Starbucks a distinct advantage over competitors. The large scale of Starbucks operations also enabled them to achieve economies of scale with respect to transportation rates. Growth on a global scale would require Starbucks to leverage these advantages. To capture a wider segment of the domestic market, Starbucks redefined the cart and applied its' use in venues such as train stations, street corners and malls. The carts, branded as Doppio, were intended to reach a new customer base. The Specialty Coffee Association of America estimated that by 1999, there would be sufficient demand for 10,000 retail outlets in North America and that carts would account for 4,500 of them. McDonalds offer Starbucks was faced with a number of options to assist them to attain their goal of becoming the global brand of choice. The McDonalds offer certainly would enable Starbucks to engage in sales of ready to drink beverages on a global scale. Would this in turn facilitate becoming the global band of choice? As previously discussed, Starbucks had committed to developing a quality brand image and had done so through investing in technology and their staff. Above providing exceptional customer service, staff were expected to respond to customer questions. Consumers came to expect the "Starbucks Experience". Twenty two percent of US consumers purchased specialty coffee. These consumers typically lived and worked in urban areas and on average had an annual income in excess of $35000. Persons with college degrees purchased 49 percent more specialty coffee than the average, single persons purchased 39 percent more than the average and persons aged 30 to 59 purchased more specialty coffee than people aged between 20 and 29. Annual growth in the domestic specialty coffee market was static. Starbucks was pursuing alternatives that would result in them capturing a larger share of the existing market and were also developing new customer bases through their brand extensions and Doppio strategies. The investment in the Pacific Rim was targeted as the first step in developing an international presence. Once established in that market, Starbucks would then focus on growing other areas. The slow and controlled growth would enable Starbucks to ensure that the quality of brand could be maintained. By allowing McDonalds to sell Starbucks coffee at their restaurants, Starbucks would instantly be able to sell their specialty coffee on a global scale. However, the quality brand that they had diligently developed and nurtured would automatically be associated with the McDonalds brand. The association would be more profound in those markets that had little previous exposure to the existing Starbucks brand. To ensure continued quality and consumer loyalty to the brand, Starbucks should decline the McDonalds offer. As an alternative to gain global recognition instantly, Starbucks could leverage their existing Encore program. By taking the mail order program and adopting it for the internet, Starbucks would instantly gain access to consumers more characteristic of the specialty coffee profile

JETBLUE When a business aims to be as successful as possible in selling its products and services, it must examine in detail whether or not the products will be attractive and necessary; if the price is optimal; if the product is being distributed in the best locations; and finally, how interest and awareness can be created for the products. In order for a business to target all of these elements at the right people at the right time, it must employ the right type of marketing mix: Product, Price, Place and Promotion. In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customers needs, and is succeeding because of this approach. With regard to Product, JetBlue is cornering the marketplace with its productivity, in-flight features, and customer service. Due to the fact that the company only purchases new planes of a single type, maintenance downtime is reduced and it is able to keep its planes in the air. In fact, JetBlue maintains the highest in-air average in the industry. Additionally, JetBlue employs an "operational recovery tool" technology that allows planners to minimize flight cancellations and delays. On board, JetBlue prides itself on treating all customers as equals and providing more comfort than other airlines. Features that draw customers in include assigned seating (contrary to its competitor, Southwest Airlines), leather seats, more leg room, and superior on-board service. Furthermore, JetBlue is one only a few airlines that offers each passenger free Direct TV and XM

satellite radio entertainment. Finally, with regard to customer service, JetBlue focuses intently on attracting and motivating a talented
workforce. The company gives each employee a sense of ownership in the operations. This value and respect bestowed on each employee translates into a motivated, productive workforce that focuses on customer satisfaction and exceeds consumer expectations. Although JetBlue focuses on service value through highly productive personnel and aircraft, potential consumers are still interested in value when they fly; the Price aspect of the marketing mix. Customers are interested in quality service at a reasonable price. In this regard, JetBlue excels, doing things that their competitors cannot or will not; offering the cheapest fares, cross-country. With its low-cost strategy, JetBlue has found that it can increase market share and dazzle customers with top-quality at lower prices. This combination has generated a significant competitive advantage for other airlines to surmount. In terms of Place, JetBlue continues to analyze the market. Through an investigative study, the company determined it was best not to compete in the New York-Boston and New York-Washington shuttle markets with the current dominance of Delta and US Airways shuttles. However, JetBlue is considering giving major airlines a run for their money as they consider to enter the high-demand Caribbean market. Lastly, with regard to Promotion, JetBlue surprisingly has quickly garnered a loyal, satisfied group of flyers which has led to repeat business. As JetBlue has discovered that attracting new customers and customer turnover can be costly, the company focuses strong attention on customer retention through its high quality/low cost strategy and free word of mouth advertising. This approach helps increase the companys profit margin and simultaneously reduce costs. JetBlue demonstrates that with the right people, the right product and t he right cost structure, airlines can grow, even in this current, challenging environment (Dodds, 2007). In an effort to maintain a leading edge, Z -Wing can learn from JetBlues marketing mix, described above. In addition to upgrading aircraft, introducing new long-haul jets, launching its In Touch service, and implementing a new customer relationship management system, Z-Wing may find it beneficial to benchmark specific strategies from JetBlue. Tactics such as lower fares, higher quality service, new and standardized aircraft, and customer retention could prove to help increase profits, lower costs, reduce customer turnover, and redefine the company as a different kind of airline; one that customers would prefer over the competition

Preliminary Starbucks one of the fastest growing companies in the US and in the world - had built its position on the market by connect with its customers, and create third place beside home and work, where people could relax and enjoy others or thems elves. It was the motto of Starbucks owner Howard Schultz and mostly thanks to his philosophy; company has became the biggest coffee drink retailer in the world. However, within the new customer

satisfaction report, there is shown some concerns,

that company has lost the connection with customers and it must been taken some steps to help Starbucks to go back on the right path regarding customer satisfaction. I will briefly summarize and examine issues facing Starbucks. Starting from there I will pick the most important issue and study it from different positions. In the end of my I will try to suggest what steps should be made to keep the company in continuing its quest to become one of the most recognized and respected brands in the world. Introduction With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great

success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store
sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding companys problem meeting customers expectations. To increase customer satisfaction level, Christine Day, the Starbucks senior vice president of administration in North America, suggested a plan to add additional 40 million annually for extra 20 hours of labor per every store. This move should help the company to accomplish lower time of service to three minutes. Analysis of Exhibits from the case: Exhibits 1 and 2 show the growing of the Starbucks during the period of five years from 1998 through 2002. As I can see, company has experienced huge grow both geographically and financially. During that period net income more than tripled and amount of stores worldwide almost tripled. The next exhibits show payroll structure and income volume per location in 2002 and product mix for North American company-operated stores. Exhibit 6 shows US retail coffee market predictions till 2005 years. It clearly shows changing in Americans coffee drinking style into specialty coffee. It is very important for Starbucks because companys main market is specialty coffee. Next of the exhibits, shows positive customer snapshot scores for North America stores. Those snapshots suggest further companys success. The only issue we can find is the product quality. According to the exhibit product quality went down during 3rd quarter of 2002. Exhibit 8 shows customer retention information. We can find from this data, that established customers and new customers are quite different in respect of education, income and attitudes toward Starbucks. According to the exhibit, customers who first visited Starbucks five years ago have higher degree of education and higher income level. Beside that, new Starbucks customers do not see it as a brand of high value, while established customers believe Starbucks to be brand they trust (50%), offering high quality product (51%). Next exhibit suggests, who customers visiting Starbucks stores often, are more satisfied, than customers who buy coffee from the company average four visits per month. Exhibit 10 informs us about importance of key attributes in customer satisfaction during 2002. According to this data, customers put store cleanness as the most important attribute of the Starbucks stores. Next places on the list took convenient, treating as valuable customer, friendly staff, coffee taste and fast service and right prices. On the other end are selection of merchandise, new beverages and whole bean selection. We can clearly see that fast customer service is not the most important attribute for Starbucks customers. Last exhibit shows factors driving valued customer perception. From 34% of responders indicating better service as a factor, 19% want see friendlier staff and only 10% want to have faster service. From 28% of responders indicating better prices and incentives as a factor, 19% of them believe free cup after x number of visit as the most important improvement. Therefore , we can clearly see that adding additional employees to speed up the service is not a solution to fix the companys problems. Solutions and Suggestions After reviewing the case I believe there are some possible alternatives to fix the Starbucks situation. 1. Investing 40 million per year to increase labor hours per store. This solution does not appear as the best way to fix Starbucks problems. As we clearly saw from the exhibits provided with the case, there are some more important issues for customers than fast service. In long way, company will get into another downturn without more complex changes, than simply add 20 hours of work a week in every store. Besides that, I believe Starbucks customers are linked to the company because of its unique style created by Howard Shultz. Speeding up service could help increasing market share, but it is not the most important issue faced by Starbucks. 2. The company could lower prices for its products. This solution should bring more new customers to Starbucks, but with profitability around 6% in 2002 (according to exhibit 1) every change of lowering the price will implement more variable costs and fixed costs to reach similar revenue, so it means the net profit will be lower even with similar amount of revenue. This move would also lead to loose Starbucks customers, who have been willing to pay more for coffee because of its premium kind. 3. Starbucks would increase prices of its products to receive more money to be spent for speeding up the service and to increase the quality of customer service. This alternative could work, but according to the case consumers believe that they see Starbucks as the company mostly concerns with making money (53% to 63%) and opening new stores (48% to 55%). Therefore increasing prices will intensify this believing and Starbucks will loose more customers, especially in times where competition has started to imitate Starbucks way of doing business, but with lower product prices. 4. Starbucks should set up an internal strategic marketing team. This will allow Starbucks to have a proactive feedback of customer satisfaction and hence faster improvement. I also recommend, Starbucks should reduce waste in making drinks, keep

consistency in drinks, and improving productivity, so savings could be used in free cup after x number visits program, which is highly anticipated among customers (19% of responders according to exhibit 11). I recommend the company invest more money in automated espresso machines which will help Starbucks to speed up the service. Plan of Action In conclusion, after reviewing all 4 alternatives, I recommend that Starbucks should use the last proposition to improve customer satisfaction. It is the most complex alternative, and it will demand a lot of work from all com panys members regardless the position. However using this alternative, Starbucks will accomplish the improvement in customer service, speeding up service time and making Starbucks more customers friendly. First of all, creating an internal strategic marketing team will help Starbucks to keep the touch with its customers. The company has been running very well with recent marketing strategy; however it could be seen recently, that responding to the customer s demands has been little late. It will also help Starbucks to keep the distance to its competition. Second, Starbucks should reduce waste making drinks. It will improve productivity and help spare money for customer loyalty programs. These programs will help Starbucks in improving customer relationship and service. Reducing waste will also help company in keeping their locations cleaner, which is very important for customers. Lastly, I believe Starbucks should invest in new espresso machines. This investment will help company to speed the service time ad will be better solution, than simply adding more work force or changing product prices.

Marketing Case study Key People Products (Marketing Mix) Overview of the case Segments (Urban or Rural) Demand Market Size Need Pop and PODs Distribution Network Competitors

Education institution Value add to students Highly intangible service attributes a strong brand refects a promise of future satisfaction .The more positive the uniqueness of a brand, the higher the brand equity. Branding is all important when it comes to attracting and retaining students a) Historical repo of institute b) attractive campuses in good locations, with lush grass-filled lawns and historical buildings or c) contemporary buildings which boast state of the art facilities;

d)

internationally known faculty and researchers as well as well known products which can be attributed to the university or a faculty member, and e) Perception

FACTORS a. b. c. d. Tution fee International dependency affected by racist (austrailia) Public vs private This includes actual physical places where students can seek support, and advisory services (e.g. agents, immigration centres), the availability of affordable accommodation, the availability of employment and access to many other aspects fundamental to other Australians, such as appropriate healthcare.

e. Promotion and recruitment 1. Use of private recruitment agents 2. Size of overseas advertising budget 3. Possession of offshore recruitment offices 4. Use of government information offices overseas 5. Size of international student enrolments Image and resources 6. Level of market profile or recognition 7. Strength of financial resources 8. Reputation for quality 9. Size and influence of alumni 10. Range of courses and programs People and culture 11. Level of innovation within the institutions culture 12. Level of customer orientation within the culture 13. Effective use of information technology 14. Quality and expertise of staff 15. Level of technical superiority

Coalition and forward integration 16. Possession of international strategic alliances 17. Possession of offshore teaching programs

f.

http://hbr.org/2000/01/the-brand-report-card/ib

key factors to be used by universities to occupy positions of distinctiveness: teaching led vs. research-led; science-based vs. arts based; basic teaching vs. higher level teaching. But even those factors cannot ensure totally differentiated positions of universities (especially where the national higher education sectors have numerous universities). Therefore, we can state that there are limitations in using the positioning concept in the real sense (differentiation) in the higher education sector. Marketing mix activities or the 4Ps model (product, price, distribution and promotion) is a marketing concept used as such to a limited extent in higher education, with its different components being paid different levels of attention in the sector. Pricing and promotion policies product policy not always being defined as such, is highly used in higher education institutions (program portofolio, product quality, branding), while distribution policy is not considered at all, as not being applicable to the sector. The nature of services in general and their specific characteristics (simultaneity, perishability, intagibility, heterogeneity affect also higher education services and their marketing. Service marketing principles apply to higher education.

To conclude, the most frequently met type of marketing activity that universities conduct is strong promotion and communication towards potential applicants related to increasing recruitment and admission. However, marketing specific actions should not stop here, the essence of satisfying the consumer (the student as primary consumer) is to offer him quality services (educational and support services). Therefore providing good student experience plays a major role in ensuring student satisfaction. Institutional image and reputation and based on them a Management & Marketing constructed brand are also important in attracting students. Images, reputations and brands are also formed based on delivering quality services towards students and other stakeholders. In the case of higher education the product itself (teaching, research, third sector services, support services) are more important to deliver customer satisfaction, than any other marketing activity.