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Arab Open University

Tutor Marked Assignment (TMA)

Academic Year 2019-20 Semester: First
Branch: Badaro Program: Business Studies
Course Title: Shaping Business Opportunities I Course Code:B207A

Student Name:
Hiba Abed Al Hafez Al Dalati Basil Student ID: 190805

Section Number: Tutor Name: Soha Achi

Mark details

Questions 30 30 40 Total

Allocated Marks
Mark

Deduction Criteria Presentation Referencing Word Count E-Library (0-4) Total deduction (0-16)
(0-4) (0-4) (0-4)
Marks

100 Student’s Total Mark (total marks – total deductions)

Notes on plagiarism:
A. According to the Arab Open University By-laws, “the following acts represent cases of cheating and Plagiarism:
▪ Verbatim copying of printed material and submitting them as part of TMAs without proper
academic acknowledgement and documentation.
▪ Verbatim copying of material from the Internet, including tables and graphics.
▪ Copying other students’ notes or reports.
▪ Using paid or unpaid material prepared for the student by individuals or firms. B. Penalties for
plagiarism ranges from failure in the TMA to expulsion from the university.

Declaration: I hereby declare that the submitted TMA is my own work and I have not copied any other person’s
work or plagiarized in any other form as specified above.
Student Signature

……Hiba A D B……………….
Tutor’s Feedback
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Tutor Name: Tutor Signature: Date returned:

Starbucks company

Question 1:

a)
The act of coming up with new idea or courts is the definition of innovation, this definition
could indicate coming up with a one of a kind product, trying to enter a new market, or
reaching state of the art strategies. One example that fits the previous definition perfectly well
is Starbucks. In fact, Starbucks is innovative company for many reasons: brand localization or
store design is simply one of the innovation ways the company uses to connect with its clients
by incorporating local artistic taste in every single branch. This company’s design studio is
strategically located in order that designer are better aware of the clients’ tastes. Also the
history of Starbucks is full of technological innovation, as it was the first company in 1998 to
lunch a website; in 2002, it started offering Wi-Fi to its clients. Now, while others are setting up
mobile payment terminals and struggling to start a loyalty program, Starbucks is seeing 11
percent of its sales from mobile order and pay. In addition, Starbucks had toasters as
laboratories the company can test any product before it is offered for sale.

b)
There are four business functions in Starbucks: operation management, Marketing, accounting
and finance, and human resources management. The first one is operation management in
which for example they aim for increasing productivity with producing minimum wastes. They
buy for example smaller milk cartons to produce fewer wastes. They also have innovative
management strategies in all areas of organization. For example, Starbucks ensures that its
goods and services reflect the image of high-end brand. This is how the innovative practice in
product is fulfilled. By importing coffee beans from farmers who adhere to quality standards,
they promote high end quality. Additionally, Starbucks has a marketing function which signifies
the business process of identifying, anticipating and satisfying customers’ needs and wants. For
example once you enter the store you can feel certain vibes. Starbucks uses certain designs that
differ based on the location of the branch. It indeed fulfills the local taste creating a ” Third
place” where urbanites can go between home and work to enjoy great quality coffee in a
unique, relaxing and friendly atmosphere. Another example of great marketing is how this
company advertises via online platforms in a way that it has become a franchise itself which
exhibits how Starbucks shows innovation through experience. Accounting and finance is the
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third business function in Starbucks. They have a special system for paying on time where all
invoices are encrypted properly and entered into the system. The pay on time control system
inventory ensures different control aspects of the inventory quantity on the shelves. They also
do special training programs for accountants. Starbucks thinks employees can break or make
company. Thus, human resources management which is the fourth business function is of great
importance in Starbucks. A special division is founded for hiring and training employees to
perform the best services. In return, Starbucks sets up many programs to accommodate its
employees and motivate them to remain loyal to company. The employees enjoy full time, part
time benefits with flexible shifts, health insurance, vision insurance and dentistry. They treat
their employees as partners. They also promote social responsibility by coming up with many
programs that help society like the veterans and youth initiative programs.

Question 2:

a)
There are three levels of product which might be applied to Starbucks vanilla latte (core, actual,
augmented). When it comes to the core products, the core level solves the real problem and is
nothing but the basic necessity you get when purchasing the good. Since vanilla latte is coffee, it
aims to stimulate nerves and increase activity of the body and increase the concentration. The
second level is actual product, it means the product tangible, features such as, high quality with
low price, brand name, and packaging, vanilla latte prices are suitable for every one and
attractive. Vanilla latte including natural dairy and flavor also creamy, and its perfect way to
enjoy velvety sweetness any time also sugar free and with fewer calories. Finally, level is
augmented product: has been enhanced by its seller with added features or services to
distinguish such as, vanilla latte free delivery- home installation of services. b)
Targeting is used in segmentation and email marketing according to a set of rules. The four
targeting strategies are the undifferentiated, differentiated, concentrated, and customized
(Hronsky and Groves, 2008). Firstly, undifferentiated: there may be strong differences in
client’s characteristic, it means making same offer to all markets (e.g. BBC News). Secondly, the
differentiated which involves making different offers to separate market segments. When
market segmentation discovers several potential target segments that the company can serve
profitably (e.g. Zara). Thirdly: concentrated, several segments may be identified but a company
not serve all of them so the company understand needs (e.g. Racehorse studs). Finally,
customized: one-to-one marketing, the requirements of individual’s clients are unique and their
purchasing power is sufficient to make designing (e.g. Mini cars). Starbucks uses concentrated
strategy for vanilla latte because it focuses on customers who love delicious vanilla latte with a
little sugar.
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Question3:

1-Segmentation: is done when customers are grouped into segments according to their similar
needs and buying features (Error and Error, 2010). Targeting: is a process of evaluating each
market segments attractiveness and selecting one or more segments to enter. The
segmentation relies on four different bases in Starbucks: demographic, Geographic,
psychographic, Behavioristic. The first segmentation base is demographic: it targets both
gender, males and females, ages from 22 to 60 from employees, student, professionals, and
married couples who have no children from middle and upper social class. But regarding
geographic: Starbucks spread in US, Canada, Latin America, Africa, China, pacific region and
Asia, especially around universities, schools, malls and companies. Psychographic: lifestyles
(mainstreamer, Aspirer, Succeeded, explorer, Reformer) also middle and upper class.
Behavioristic: degree in customer loyalty, enjoying quality coffee in relaxing atmosphere and it’s
also a place to work and chat with friends.

2- Positioning: is referred to the way consumers perceive the products in their mind. No doubt
for Starbucks to excel a successful marketing mix which composed elements that is used to
maintain a new competitive product that goes in with the mind of consumer. So, marketing mix
comprising the four Ps: product (high quality), place (strategic one), promotion (very good
one), and price (expensive) affect the positioning of the brand.

3-Its success is no accident; Starbucks has a solid marketing strategy that nails all 4 Ps of the
marketing mix: product, place, promotion, price. As for Starbucks products the company
continues to innovate more of its products to accommodate more of the food and beverage
market and in order to expand its spread in the market. An example of Starbucks products is
coffee, tea, baked goods, and juices added in 1994 foappucino.the second is place: Starbucks
offers its products in coffees, and there one many other places and distribution channels
available, also offering their products online electronic stores where the customer order online.
For promotion of its product, its depends on personal relationships and communications and
the promotional Starbucks mix includes advertising, oral marketing, public relations, sales
promotion through TV, print media and the internet. Finally, Starbucks uses distinct pricing that
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differs from competitors like: premium, McDonalds’, it maintains its specialized image and
provides high-quality products and intends in the marketing strategy that it benefits in the
behavioral trend of people to buy more expensive products based on the perceived
relationship between high price and high value.

References list:

➢ Error, C. R., & Error, B. M. (2010). U.S. Patent No. 7,761,457. Washington, DC: U.S.
Patent and Trademark Office.
➢ Hronsky, J. M., & Groves, D. I. (2008). Science of targeting: definition, strategies,
targeting and performance measurement. Australian Journal of Earth Sciences, 55(1),
312.
➢ Breonna Bergstorm.Starbucks marketing strategy. March 29.2018
➢ John dudovskiy. Starbucks segmentation, targeting and positioning. April.2017
➢ LIZ Barrett foster.5 ways Starbucks is innovating the customer experience. May 218
➢ Lawrence Gregory. Starbucks coffee's operations management. january.2017
➢ Roberta green span. Starbucks corporation's marketing.feb 27,2019
➢ Smirti Chand. Target marketing: four generic target marketing strategists

Note:

https://www.wayup.com/i-Food-and-Beverages-j-2020-Starbucks-Finance-Accounting-
RotationalDevelopment-Program-Starbucks-876655354153650/
https://www.google.com/search?q=vanilla+latte+in+stabucks&rlz=1C1AVFC_enLB907LB907&oq=vanilla+
&aqs=chrome.2.69i59l3j0j69i57j69i60j69i61j69i60.11018j0j9&sourceid=chrome&ie=UTF-8