Course Name: MKT201

Section: 01

Instructor Name: Thufathun Nessa Chowdhury (Assistant Professor)

Report on Business Environment and “Starbucks Coffee” Marketing

Group Members Name ID

Iftekhar-Ul Islam Chowdhury 183004402
Nur Mohammad Tanvir 183005702
Fahim Mahmood 183006502
Mohammad Irfanul Hoque 192000502
 Business Environment
Definition of Business Environment is sum or collection of all internal and external factors such as employees,
customers’ needs and expectations, supply and demand, management, clients, suppliers, owners, activities
by government, innovation in technology, social trends, market trends, economic changes, etc. These factors
affect the function of the company and how a company works directly or indirectly. Sum of these factors
influences the companies or business organizations environment and situation.

Business environment helps in identifying business opportunities, tapping useful resources, assists in
planning, and improves the overall performance, growth, and profitability of the business. There are various
types of Business Environment like Micro Environment and Macro Environment.

The Macro environment is part of the business environment.

#. Macro-Market/Meso: Customers, suppliers, competitors, civil society etc.

#. Micro: All internal factors; culture, strategy, resources, management structure etc.
 What is Macro environment?
 The context in which we operate. The Macro environment factors are below-

1. Demographic Forces: Study of human populations in terms of size, density, location, age, gender,
race, occupation etc. Example- Changing (age) structure of population, changing family structure,
increased education, growing ethnic and racial diversity etc.
2. Economic Forces: Represent the wider economy and may include-
#. Levels of employment and unemployment
#. Exchange rates and inflation rates
#. Economic growth rates
#. Interest rates and monetary policies
These may vary from one country to another.

3. Natural Forces: Climate, weather and natural resources that affect human survival and economic
activity. Example- Limited natural resources, recycling, waste management, climate change, use of
green or eco-friendly products and practices etc.
4. Technological Forces:
#. Most dramatic force shaping our destiny.
#. New products and new opportunities.
#. Companies that not keep up will soon find their products outdated.
5. Political forces: refers to- Public institutions- #. Government
#. Government agencies
#. Government owned businesses
Nonpublic institutions- #. Interest groups
Instruments- law, agreements, policy, tax etc.
6. Cultural forces: The institutions and other forces that affect a society’s basic values, perceptions,
preference, and behaviors.
#. Cultural values are changing.
#. Comprehend the local cultures to deal with them effectively.
 Society’s major cultural views are expressed in people’s views of:
- Themselves
- Others
- Organizations
- Society
- Nature
- The universe

 What is Microenvironment?
 Microenvironment consists of the forces closest to the company that plays important role on
the company’s ability to fulfill the customers’ needs.
 Microenvironment Factors:
1) Customers
2) Company
3) Competitors
4) Suppliers
5) Intermediaries
6) Public

1. The Customers: Customers are the people who buy the products. Customers company can be
divided into five-
I. Consumer market
II. Business market
III. Reseller market
IV. Government market
V. International market
2. Company:
I. Internal environment of a company that is marketing the product.
II. Areas inside a company.
III. Affects the marketing department’s planning strategies.
IV. All departments must “think consumer” and work together to provide superior
customer value and satisfaction.
3. Competitors: Competitors are the other organizations that are competing with the company for
the same consumers with the intentions of fulfilling the same needs and wants.
 Examples- KFC Vs. McDonald’s

If McDonald’s gets more profit than its counterpart, then KFC will investigate the reasons
for the problems.

4. The Suppliers: Suppliers are firms and individuals that provide the resources needed by the
company.

Timely + Price + Quality

= Right product
5. Marketing Intermediaries: Marketing intermediaries are firms that help the company to
promote, sell and distributes its goods to final buyers.
6. Public: Any group that has an actual or potential interest in or impact on an organization’s ability
to achieve its objectives. There are seven types of public-
I. Financial pubic- Bank, investment houses and stockholders.
II. Media public- Newspaper, radio, television and magazines.
III. Government public- Federal Land Development Authorities (FELDA).
IV. Local public- Neighborhoods residents and community organizations.
V. Internal public- Workers, managers and volunteers.
VI. General public- Population at large.
VII. Citizen action public- Majlis Kanser Negara (MAKNA), World Wildlife Fund (WWF).
 STARBUCKS COFFEE

Starbucks Coffee Company has become a common brand among coffee lovers everywhere. The
locations now 55 different countries. It grown substantially from their beginning since Seattle,
Washington in 1971. From there through 1982 they began providing services to restaurants and local
espresso bars. In a ten years spent, they grew from 17 stores to 1412 and opened in various countries.
Initiating ideas like stock shares from employees, and acquiring companies like TAZO and also become
partners with nonprofits such as Conservation International. Today Starbucks has 18784 location to
worldwide with over 149000 employees in a 2010 recorded profit of $945.6 million.

 Mission statement of Starbucks Coffee: Starbucks mission statement has been to inspire and
nurture the human spirit- one person, one cup and one neighborhood at a time.
 The Four P strategies of Starbucks Coffee:
 Product: Starbucks offers coffee, tea, food, and accessories. They sell a variety of hot,
cold or blended fair trade coffees and teas as well as other beverages. As for foods,
they offer baked goods, healthy snacks preparing from donuts to chicken wraps.
 Price: Starbucks' pricing strategy is carefully calculated and based on a combination of
the target market, using a premium approach to branding. The strong brand identity
drives sales, despite having higher priced products. Although Starbucks uses a
premium pricing strategy, it does so below the luxury threshold. This shows
 that Starbucks has priced its offerings based on market demand and on brand
association and not on the price of the raw coffee bean.
 Place: Starbucks offers most of its products at cafés or coffeehouses. However, there
are various other places or channels of distribution available for these products. In this
case, the following are the main venues or places that Starbucks Corporation uses to
reach its target customers:
I. Coffeehouses/Cafés
II. Retailers
III. Mobile apps
Initially, Starbucks sold its products through coffeehouses. Eventually, the company
offered some of its products through its online store. This approach served as a major
integration of e-commerce into the company’s strategies. Nonetheless, some of
Starbucks’ merchandise items are available through retailers. On the other hand, mobile
apps allow customers to conveniently place their orders online so they could easily get
their food and drinks at the company’s coffeehouses.
 Promotions: Starbucks Corporation promotes its products through interpersonal
relations and communications, although advertising is also part of the promotional
approach. In this case, Starbucks’ promotional mix is as follows:
I. Word-of-mouth marketing
II. Advertising
III. Sales promotions
IV. Public relations
Starbucks became popular primarily through word-of-mouth marketing. In the
marketing mix, word-of-mouth usually focuses on providing the best customer
experience in order to encourage people to spread positive words about the business.
The company also advertises its products through television, print media, and the
Internet. Sales promotions are used in Starbucks Rewards, which is a program involving
freebies that customers can avail after purchasing a certain amount of the company’s
products. The corporation infrequently uses public relations, which has not always been
successful for the business. For example, the Race Together public relations campaign
was widely criticized. Still, the Starbucks Foundation continues its efforts to solve
various challenges in society. The Foundation helps communities, while promoting the
company’s brands.
 The strengths of Starbucks: Starbucks strengths greatly away their weaknesses for their social
responsibility, customer service, specialty coffee blunts, product expansion and their quality
coffee. Starbucks feels that it is necessary to hold the competitive advantage by creating
significant short term goals of conserving water, conserving energy, encouraging reusable cups,
retrieving all of their coffee epicly and having recyclable materials. Another strength that put
Starbucks above the rest is their customer service by creating a family type atmosphere. The
most significant strength Starbucks shows is their quality coffee. Partnering with companies like
Apple, iTunes gives the younger real excitement.
 The weaknesses of Starbucks: Starbucks does have however some weaknesses and these are
prices, advertising and locations. Many will argue that Starbucks has too high prices for their
product. Many people cannot afford to spend such a high amount on coffee.
  Competitive threats for Starbucks: Although Starbucks is a leading brand, these are other
companies that may oppose a threat such as Tim Horton’s, Dunkin Donuts, Blentz Coffee and
even McDonald’s. Many people will be drawn to these cheaper coffee locations. But people who
want quality coffee will come to Starbucks still. The threat for Starbucks to monitor is other
cheaper retailers are steadily improving their coffee.
 Starbucks target market: Starbucks target market is the consumer market. Their coffee is
directed to people who have disposable income that can be spent on high price strings. They are
directed towards adults ages 25 to 40 who are working and enjoy coffee in the morning before
work. This is their primary market which accounts for 49% of their market. Young adults ages 18
to 24 accounts for 40% of the Starbucks sales. This is due to the environment and location of
Starbucks. Starbucks is often show some locations near colleges and universities to target
students.

References
http://panmore.com/starbucks-coffee-marketing-mix-4ps-analysis. (n.d.).

https://en.wikipedia.org/wiki/Starbucks. (n.d.).

https://smallbusiness.chron.com/starbucks-pricing-strategy-10544.html. (n.d.).

https://www.youtube.com/watch?v=9HVMhm59Ibs. (n.d.).

https://www.youtube.com/watch?v=BZrb1NIc4YA. (n.d.).

https://www.youtube.com/watch?v=ElVhQpWYyHY. (n.d.).

https://www.youtube.com/watch?v=y9RDg_JMmPc. (n.d.).