The Starbucks Company does not need any introduction; the sweet smell of hot coffee touches your nostrils as soon as the name of Startbucks is mentioned. In order to give a magnificent boost to this world acclaimed brand, the proposal of the vending machines has been designed. The following assessment encompasses all the marketing strategies including 4p’s and the SWOT analysis by highlighting the significance and efficiency of the vending machines to promote the sale and growth of Starbucks product in the market.
Background Howard Schultz (Starbucks chairman, president and chief executive officer) was mesmerized by Starbucks product for the first time when he tasted a cup of Sumatra in 1981. His actual journey began in 1982 and since then he devoted himself to the company and revolutionized the whole set up.
His passion to introduce the flavours of Italian coffee to the United States opened up new vistas not only to his career but also took the Starbucks product to a new height.
He travelled and widened his experience of tasting different blends of coffee in Italy, he was inspired by the comfy atmosphere of the coffee houses and wanted to introduce the same places with the similar ambiance in the United States. He started off with his own coffeehouse by the name of Il Giornale, and in August 1987, he made a grand entry by purchasing Starbucks with some local investors.
Starbucks motto is not only to sell the product; it ennobles the idea of unanimity and social interaction by providing the cosiest place of the world.
Starbucks bags the honour of holding 15,000 stores in 50 countries and known as the premier roaster and retailer specialist in the world.
New Product Startbucks is famous for introducing new ideas in the market and has always appreciated new ventures. This assignment presents proposal of an exclusive vending machine for the company that can prove another novelty for the company and raise the growth rate of the company by hundreds.
To understand the effectiveness of the idea, it is important to talk about the 4p’s of marketing that is product, place, price and promotion.
Product What is Vending Machine? A vending machine facilitates the consumer by providing him any item without botheration of looking for a store to purchase snacks, beverages, alcohol, cigarettes, lottery tickets, consumer products etc. You simply have to insert currency or credit cards into the machine and get whatever you want. The idea of vending machine was germinated in introduced in late 19th Century.
During the early 1880s, the first commercial coin-operated vending machines were introduced in London, England. In 1888, the Thomas Adams Gum Company introduced the very first vending machines to the United States. The machines were installed on the elevated subway platforms in New York City and sold Tutti-Fruitigum. In 1897, the Pulver Manufacturing Company added animated figures to its gum machines as an added attraction. The round candy coated gumball and gumball vending machines were introduced in 1907. (Merry Bellis) The progress in this field has brought great versatility to vending machines, now you can see gold vending machines, vending machines, vending machine release anger bike, etc.
How does it actually work? Once the amount has been verified and accepted by the machine, it allows the customer to get the product either by pushing the button and fill the cup or it releases the product in an open compartment at the bottom into the cup as soon as the amount is receive. The data is computerized and the machine works electronically, the customer has to enter the item code, machine accepts the payment and the procedure begins.
The analysis comprises the strength and weaknesses of the proposal.
Strengths The name of Starbucks is associated with quality. The customers have blind faith in the quality of the product that is the biggest plus point in the field of marketing. Supreme quality coupled with splendid service can boost the sale of the product to new heights. Customers’ feedback on daily basis to check their priorities can also be a very strong strategy for the raise of sale.
Vending machines are also least vulnerable to the threat of hacking. Though, over the years, criminal elements have tried several ways to hack the machines but no major disaster has ever been reported. Vending machines have been updated as per the requirement of the machine purchasers.
Weaknesses The biggest hindrance in the promotion of the idea can be the lack of storage space for food product as well as for machines. It is not possible to overcome this issue in the beginning; the expansion of the above mentioned areas is possible with time.
Some health conscious people have reservations against using the products delivered from the vending machines; they suspect the freshness and hygienic conditions of the product. However, with the advent of latest technology every gadget has turned into a luxurious delicacy. The vending machines offer services with some interesting features, some of them are as follow: * No cleaning up, no mess, one cup at a time
Opportunities Availability of the wide range of variety is the pride of Starbucks Company which cannot be beaten down by any other competitor in the market. It can play a vital role to increase the growth rate and establish the relation of trust with the customers.
Threats Advantages of Machine It is available 365 days a year without a stop. It only needs the vigilance over the constant supply of product and a little maintenance. It avoids the losses in term of bad checks or credit card risks as it works only after verifying the amount paid for the product. Another important attraction is the facility of mobilizing the machine. The location can be adjusted as per the requirement and demand of the customer.
Disadvantages No system is complete without mentioning its disadvantages as it is better to be realistic than a loser. The machines are prone to public abuse in the form of vandalism as no safety measures can be taken to avoid the situation. Similarly, in some cities the rate of tax for fixing the machine is really very high and can cut down the amount of profit.
Another stigma has been attached with the usage of vending machine and has been turned into a nightmare by ‘the societies of war against obesity’. New workplace initiatives are targeting vending machines for causing increasing rate of obesity in young people which affect their health and increase cost of health care services. Therefore, the choice of maintaining good health is always in the hand of consumer and right time and right amount can solve a lot of problems. Thus, there is a need to create awareness about the health issue rather than to condemn vending machines.
Place The idea of the vending machines generated from the concept of providing facility to the customers at the nearest possible spot. You can get items of your choice anywhere without hunting the general stores or shops. The machines can be installed with great ease at almost every place such as shopping malls, stadiums, restaurants, gas stations, universities etc. Since the system is a novelty in the market, it can easily grab its territory to generate great business.
Price The idea of using a vending machine does not burn a hole in the pocket of the customer. The customer enjoys all the flavours and variety at the same price which he expects to get at the shop as well as other benefits such as on the purchase of the product between $5.00 and $500.00, the customer can relish the advantages of promotional deals and gift hampers. There is no compromise over the quality of the product if it is sold through vending machines and the lovers of Starbucks coffee know and believe that they are getting the same product everywhere let it be a shop or a vending machine.
Promotion The machine can abridge the distance between the coffee lovers and the product as it is available at any nook and corner by the virtue of our proposal. It brings the customers and the products closer to each other and it becomes hard to resist the temptation of having a nice cup of coffee especially when it is easily available and you are not to taking another route to get to its closest outlet. It is always there to serve you like the most obedient servant at your disposal.
Other marketing techniques can also speed up the rate of sale such as attractive web pages about the product, fluorescent neon sings with machines, vending machines publicity at the Startbucks shops, other incentives for using vending machines for example the introduction of loyalty card with a bar code that can give advantages to the customer for the maximum purchase of the product from the vending machines.
Franchise To make Starbucks an internationally-recognized symbol of quick-service, the vending machines can play a pivotal role. As Starbucks is already providing its services in fifty different countries, the span of success can be expanded to several degrees by introducing the vending machines in new locations. The product can be given the status of the most successful franchise through research and development of new concepts and services, vending machine will definitely prove the best strategy. The system can easily beat its competitors through good marketing coverage and occupying more territory space. Thus it can generate successful business which can be easily operated and mobilized.
Partners The customer has a relationship of trust and reliability with the product. Startbucks has earned that trust by providing quality product incessantly over the years and has never compromised over it. .The installation of vending machines can also create opportunities for other supporting products (snacks, etc.) in the market. These products can get advantage of the Starbucks popularity as a customer’s perspective about your collated product is influenced by the integrity you have established in the market. Thus, by keeping a certain percentage of profit over the secondary product, rate of profit can be increased manifold.
Future Prospects The increasing demand of vending machine interested technologist to bring several friendly-user changes in the machines, such as some Japanese companies are working to make them thinner and compact with more advanced functions. In order to meet the consumer’s sense of taste and quick and easy service, some very remarkable technologies have been introduced such as cup-mixing systems, indoors series of vending machines, separate or built in microwave oven, more bill storage capacity, thin bill validators (Fuji Electrics) etc. Thus, the future of vending machines is very bright as different business giants are working towards making it the most wonderful amenity by keeping in view the global environment problems, product liability act and increasing social needs. Conclusion
The installation of vending machine can revolutionize the franchise system of the Starbucks Company. It can energise and invigorate the whole set up within a short span of time. As every system has its pros and cons but vending machine system is appealing in terms of its countless advantages. It can be the cream of the crop and can make a go on very practical and easy terms.
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