Starbucks Coffee Company Planning and Promoting New Service

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Executive Summary

Starbucks Coffee Company is planning to introduce a new service into the market, a coffee subscription. The move is intended to restore the performance of the company after the COVID-19 pandemic. The marketing strategies, which will be adopted in promoting the product, is the Customer Dominant Logic model. The company will incorporate the 7Ps of marketing to ensure the proper promotion of the service. Once the product is in the market, there will be a need for the manager to deliver effective leadership skills and knowledge.

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Introduction

Most companies in the beverage industry and other sectors have recorded a reduction in performance since the COVID-19 pandemic emerged. Starbucks’ performance has been greatly affected by the COVID-19 pandemic because its sales have significantly reduced (Donthu and Gustafsson, 2020). As a strategy to combat the market challenges, the company will adopt a new service to improve its performance amidst the difficult economic times. The new service entails adopting a coffee subscription service that will enable the customers to order the products online and have them delivered to their doorsteps.

The idea is not entirely new in the market, although it is new to Starbucks. With restricted movements due to COVID-19 measures, the company will have the opportunity to increase its operation and reduce the compromise on profit (Petersen et al., 2020). Marketing the new service is critical; product promotion is important because it helps boost sales in different market conditions, enabling organizations to maintain good performance (Hosseini, Soltani, and Mehdizadeh, 2018). Therefore, it is instrumental for the organization to adopt an effective marketing strategy for the new service to ensure its success and restore good performance for Starbucks Coffee Company.

Suitable Marketing Strategy for the New Idea

Marketing strategies are important for the success of any organization in the contemporary business world. They involve the companies and businesses’ processes in interpreting the markets and their strategies to attract more customers and ensure a competitive advantage for the organization (Blankenship, 2016). Several strategies are continuously being applied by different firms, which are launching new products in various markets. For Starbucks, a suitable marketing strategy that they can adopt to maximize the chances of success of the new service is the Customer Dominant Logic strategy.

The Customer Dominant Logic strategy is a vital strategy for the company because it focuses primarily on the customer. The strategy entails shifting the focus of the business towards customer engagement with different service providers. It is the most suitable marketing strategy that Starbucks should adopt to enhance its operation in the tumultuous market. In the contemporary business world, there is a great need to change the focus of marketing from the sellers to the customer.

Research by Heinonen et al. (2010) reveals that customer-dominant marketing logic has more advantages in the current markets compared to other logic such as the service-dominant logic. The study advocates for addressing the views and interests of the customers before those of the producers or service providers in the market (Heinonen et al. 2010). It is clear that the approach is different from the traditional perceptions of customer orientation. However, the viewpoint is substantially reasoned and backed with facts hence worth adopting by Starbucks.

Effectively marketing the new product is an important step for the company and the ideology behind its marketing perspective is critical. By adopting the customer-dominant logic the company will effectively overcome some significant problems related to service marketing. For instance, by embracing the model, the company will effectively increase its involvement, enhance the character of the customer’s experience, visibility of value creation and its control in co-creation (Heinonen et al. 2010). A study by Skålen et al. (2015) also supports the adoption of the customer-dominant logic model encouraging managers to consider it when developing a value propositions. In their research, Anker et al. (2015), prove through semantic and ontological analysis that service-dominant logic and the product dominant logic are flawed in terms of explanatory power hence the need to consider distinct support of customer-dominant logic when creating value for a service. Considering the needs of the customer when creating value of a service is important hence the need for Starbucks to adopt it as a strategy for marketing its new service in the US market.

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Promoting the New Service

Marketing Communication

Promotional design.
Figure 1: promotional design.

To effectively promote Starbucks’ coffee subscription service, the 7Ps will have to be integrated into the plan. The customer-dominant logic strategy discussed above will focus on the first P which is the new service. The service focuses on the current needs of the customers while strategically considering the nature of the contemporary market. Therefore, the product is highly relevant in the contemporary market situation. The customer-dominant logic will address the second P, place. The company considers the accessibility of the clients as an important aspect that has to be communicated adequately through virtual platforms to reduce human interaction during the pandemic (Abdul Rashid, Hassan, and Ahmad, 2020). Therefore, the new service will only be marketed and offered within the US market.

The third aspect which will feature during the promotion will be the price of the service. Starbucks will add a 20% fee for the ordered products to cater to the delivery expenses. The small increment in price will be paid as part of the bill, and this has to be communicated in the marketing strategy. The fourth P, promotion is considered since the business will be using media and online channels of promotion to align the business to the current trends and helps maintain the regulations of COVID-19 in the market. Popular TV stations, as well as the top social media platforms such as Facebook, will be effectively used.

To address the fifth P, physical evidence, the company will have to consider getting testimonies from customers who have already enjoyed the service to provide evidence of its physical existence. The high-performance website and social media platforms which are instrumental marketing tools for Starbucks will have a section for customer feedback to prove the service’s existence (Anjani, Irham, and Waluyati, 2019). This will still be in line with the customer-dominant logic strategy. The advertisement will also incorporate customers’ testimonies to act as evidence for the product. The sixth P, the people, is an important consideration since it influences the employees who will be involved in both marketing and sales of the product. The company will consider hiring people of different racial identities as well as those who are popular to help in communicating the message about the product (Nisa et al., 2018).

Celebrities such as Taylor Swift and Chris Rock will be instrumental in the marketing campaign. The chosen strategy will also address the last P, which is a process. Through the social media platforms, the website, and the advertisement, which will be applied in promoting the new service, the organization will communicate the procedures of ordering and receiving the desired products fast which will be a precise process involved in the promotion of the product.

Promotional Plan of the New Service

It is instrumental in having a plan for executing the promotion exercise of the company. Below is a potential promotional plan that Starbucks will adopt to ensure the success of its new service.

Starbucks’ Marketing and advertising Campaign

Brand ambassador – The company will choose a famous ambassador to facilitate the promotion campaign; Starbucks can consider Taylor swift or Chris rock because they will greatly impact the customers’ views concerning the product. A brand ambassador can be instrumental in marketing a new product because they can influence consumer sales, enhance the positive message, and boost social media promotion (Sadrabadi, Saraji, and MonshiZadeh, 2018). Taylor Swift will be a perfect ambassador because she has many followers on social media. Below is a mock-up creative design for the advertisement.

Mock-Advert Flyer for the New Product.
Figure 2: Mock-Advert Flyer for the New Product.

Online Promotion

Social Media and Online outreach – The new product ambassador will promote the new service through its website, advertisements, and social media platforms.

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TV and Radio Promotion – It will be important for Starbucks to produce advert videos and have attractive signature tunes accompanied by the new products’ message.

Starbucks Promotional Plan for the New Service.
Table 1: Starbucks Promotional Plan for the New Service.

Skill and Knowledge Needed to Manage the New Service

There are many different skills and knowledge which are needed by managers dealing with the provision of services. If I were the manager of the new service delivery at Starbucks, there are several key competencies, which I would need to possess to ensure the success of the new service. Communication skill is one of the vital aspects needed by managers regardless of their organization’s roles (Bucăţa and Rizescu, 2017). Service provision entails a lot of interaction with customers and employees promoting the product. Effective communication helps managers organize their teams and communicate effectively with the customers regarding the services (Popescu et al., 2020). Therefore, possessing the skill will help ensure my success as a manager for the new service.

Patience is the second aspect, which is important for all managers dealing with service provision. The service may not gain popularity immediately it gets into the market. However, exercising enough patients would be important to allow the strategies to establish and thrive (Haque, Liu, and TitiAmayah, 2017). Impatience can be detrimental to the organization, and it may derail the performance of the tactics chosen to promote the new service (Popescu et al., 2020). When teaching complex concepts to team members, it is important to maintain patience to ensure all lessons and concepts are understood. I am confident about maintaining patience in different circumstances; therefore, I can be an effective manager of the product.

Diplomacy is the other critical skill that managers need to have. It is quite useful when there is a need to deliver bad news to the employees or when there is a need to deliver tough feedback to various stakeholders. Diplomacy as a skill is exhibited when words are properly phrased, tone controlled, and proper choice of words is adopted to enable the other parties to understand and feel respect during a conversation (Alammar and Pauleen, 2016). The skill can be developed by observing how other diplomats conduct themselves. Diplomacy will help promote the coffee subscription service because it can effectively unite different people in the promotion exercise.

As a manager, many challenges are encountered time and again. Without addressing these challenges effectively, a company realizes losses that may significantly impact its performance. Thus, managers need to have problem-solving skills to effectively address the company’s issues and maintain profitability (Kerns, 2016). When introducing a new service into the market, there are many challenges that will have to be encountered. A manager with good problem-solving skills may easily address the issues within the shortest time possible to ensure their success (Lassoued, Awad, and Guirat, 2020). One way of developing the skill is by asking the employees and other people around them about the challenges they are facing.

To effectively manage the new service for the company, it is important to know how to motivate the team. Motivation helps lead people and offers inspiration that enables them to perform their tasks appropriately (Varma, 2017). To ensure a new service in the market, it is vital to motivate the employees to share ideas and put significant efforts into all activities. Motivation enhances the organization’s performance by reducing the gap between employees’ willingness to work and their abilities (Varma, 2017). Therefore, proper execution of the knowledge can increase the workforce’s productivity and reduce production costs.

Lastly, as a manager in charge of providing services, it may be effective to maintain confidence, emotional intelligence, and vision. Trusting the employees is as important as having faith in the processes and strategies adopted. Emotional intelligence is critical in ensuring a stable work environment, which enables all stakeholders to deliver effectively. On the other hand, vision is critical because it enables a manager to focus on the bigger picture and business objectives. For instance, as a manager of the new service delivery at Starbuck, I will remember that the service’s introduction is intended to enhance its performance in the market and ensure the realization of its mission and vision.

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Conclusion

In summary, it is important for Starbucks to effectively plan how it will market and promote its new products in the market. The use of social media marketing, promotional website and advertisement are suitable marketing strategies that the coffee company will utilize. The marketing strategy will incorporate the 7Ps to establish the new service presence in the market. The marketing and promotional campaign will be used to incorporate a popular brand ambassador to help create awareness of the service in the market. As a manager of service delivery, it is important to possess specific knowledge and skills. Some of this knowledge and skills include effective communication, problem-solving, and diplomacy skills. However, patience, vision, emotional intelligence, and the ability to motivate subjects effectively are other knowledge and skillsets vital in ensuring efficient management.

Reference List

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BusinessEssay. "Starbucks Coffee Company Planning and Promoting New Service." September 16, 2022. https://business-essay.com/starbucks-coffee-company-planning-and-promoting-new-service/.