Starbucks Canada

Starbucks
Database Marketing Plan

Prasad Venkittathodi | Vaibhavi Prajapati

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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 December 1, 2011
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.

Starbucks Canada || Database Marketing Assignment ||

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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 December 1, 2011
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. December 1, 2011

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.

December 1, 2011


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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. December 1, 2011
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 December 1, 2011
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, December 1, 2011
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.

December 1, 2011


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o Some of Starbucks Innovating Product and Offers Advertisement

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 SWOT

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December 1, 2011

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 December 1, 2011
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. December 1, 2011

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 December 1, 2011
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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December 1, 2011


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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.

December 1, 2011


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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

December 1, 2011


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