According to a Wall Street Journal report, Starbucks is engaging in increased promotion in order to bring in more customers during the afternoon and evening hours.
While the coffee chain thrives during the A.M. caffeine rush, sales dwindle as the day progresses. In order to bring in more customers, Starbucks is appealing to a specific target market: "the occasional Starbucks drinker" (Jargon). Marketing research revealed to the company that the majority of afternoon coffee consumers are part of the 60 million monthly visitors who are not enrolled in the Starbucks loyalty program. Although these customers primarily buy their coffee in the afternoon, they shop too infrequently to notably boost sales. According to a leading marketing executive at Dunkin' Donuts, purchasing morning coffee is a "ritual" for consumers, while afternoon coffee purchases are representative of a "physical or an emotional break" and do not generate the same degree of brand loyalty (Weisman).
adage.com
Challenges facing Starbucks sales push have to do with context and competition. The larger social-cultural context is that Americans have largely embraced coffee culture. It is now routine for individuals from multiple socioeconomic backgrounds to shell out $5 or more on specialty coffee drinks. This cultural shift, which took place gradually over the last decade, and the resulting increased demand for crafted coffees has led to increased competition. Now, Starbucks must try to pull its afternoon customer base away from Dunkin' and Mcdonalds.
brit.co
To generate more sales, Starbucks is focusing on the product, price, and promotion elements of the marketing mix. First, the company is creating new cold beverages to entice potential customers. Additionally, the company is choosing to improve service (which falls under product as well) by including experienced baristas in the afternoon shifts. Starbucks is promoting its new drinks and special prices as "happy hour," with an ad campaign directed at the "occasional Starbucks drinker" target market.
marketwatch.com
Unfortunately for Starbucks,
its competitors are not far behind. Both McDonalds and Dunkin' are pushing to gain a piece of the afternoon sales market share by promoting their own afternoon specials.
Starbucks' marketing strategy is solid.
Starbucks has completed a situation analysis and has appropriately adapted their marketing mix to reach sales goals over the summer. I expect the ad campaign to be successful. Unlike Dunkin or McDonalds, which are arguably inferior goods, Starbucks is a luxury brand. This means that if the economy takes a turn for the worse, I would expect McDonalds or Dunkin to generate more sales, as the demand for inferior goods increases under stressed market conditions. However, considering the current economic forecast, I expect Starbucks' new ad campaign to succeed.
WSJ Article: Starbucks Trying to Woo Afternoon Customers
Published: May 8, 2018
By Julie Jargon
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