To: The marketing manager of Caffé NeroDate: 28-04-2014Report on: How Starbucks reacts to the changing market conditions and what Caffé Nero should do to increase their share on the coffee market.From: [NAVN A], Marketing assistantYou asked me to write a Memo Report and that have I done. It’s about to get an insight and an idea of how Starbucks reacts, to changing their market conditions and how Caffé Nero can learn a little from them. The report is also included a talk about Starbuck latest initiatives, and my personally recommend on how Caffé Nero should react to increase its share of the coffee market. The reason I’m writing this report is to get a better insight on Starbucks newest initiatives on the changing market, and maybe get some ideas from them that we can use in our company.I got my information from these sources: Interviews: Starbucks future part 1 and 2 The star of StarbucksStarbucks Launches instant coffeeArticle: Behind Starbucks' Instant-Coffee Rollout. By Susan BerfieldWebsite:http://en.wikipedia.org/wiki/Starbuckshttp://www.starbucks.com/
In the last couple of years there has been a lot of changing market conditions on the coffee market, but still the coffee market giants Starbucks manages to keep business going and get more and more costumers. Starbucks is the biggest coffeehouse company in the world and have over 20.000 stores worldwide and they serve more than 40 million costumers each week. It’s pretty amazing that even with these huge numbers they continue to grow. Starbucks is starting to open a lot of coffeehouses in China, they have about 400 at that region right now and the Chief Executive Officer (CEO) of Starbucks Howard Schultz believes in, that one day China maybe would be his largest market. Starbucks was founded on Pike Place Market in Seattle, 30. March 1971 by Jerry Baldwin, Gordon Bowker and Zev Siegl.In the last couple of years Starbucks has announced a whole range of new initiatives, they have over 70 different kinds of coffee they even sells coffee with ice cream and they are now also beginning to sell products with alcohol in on pubs. My opinion on Starbucks having so many products and constantly making new products is very good. Because when they keep making new products they’ll continue to be interesting to the costumers. The costumers will keep buying stuffs from Starbucks and never get tired of it, because there always will be a product that they have never tasted before. This is a very effective business strategy and they’ll continue to attract more and more customers, when there products range is so wide that they have customized almost anything you can buy to fit your taste. Starbucks have also partnered with several of big food chains such as McDonald’s. This is also a great way to get branded and sell some goods. Especially in the U.S.A where McDonald’s is very popular and people go eat their everyday and some people even eat their several times a day.An example on one of the new initiatives they have introduced in Starbucks is the “instant coffee” the so-called blast from the past. This product consists of a little box or something like that with coffee in, which can be carried around and made everywhere by just adding hot water. It’s a smart thing when you’re in a place without any coffeehouse nearby and you just need a quick cup of coffee. It could be smart for people who’s on the office or people who are on an outing or picnic trip. Instant coffee has got a lot of criticism over the years, because people think that it doesn’t taste as good as the general coffee. But Starbucks claims that their product “instant coffee” tastes exactly the same, as the general coffee they sell coming from coffee machines. Howard Schultz the CEO of Starbucks says in an interview: That they have completely replicated the taste of Starbucks coffee in the “instant coffee” and he thinks that most people wouldn’t be able to tell the different.The price for the instant coffee is less than a dollar per cup, so it’s a lot cheaper than the original which makes it a good buy if it tastes the same as the original coffee.So I stopped by the local Starbucks store yesterday, to find out whether there was a taste difference between the original and the instant coffee, and I must admit that the taste almost identical.My recommendation to Caffé Nero if they should increase its share of the coffee market would be, that Caffé Nero should be more innovative and came up with new ideas and products so the products range become wider. So we can attract more customers. It’s a good idea to create something that the customers never have seen before and never will forget, in that case they’ll either came back to us or tell their friends about it.I will also recommend us to start our own brand for instant coffee, especially if they’re successfully at Starbucks, in that case we will get market share at this point.We could also try to get partnerships with some small food chains or gas station for example in Scandinavian, because there’s a lot of small food chains and gas station there. In that case we would get more customers, and not only in our cafes. And we would have a reputation in other countries.The last thing I will recommend is that we should set some lower prices on our products, because some people don’t want to buy coffee a place where the prices is high, if they know a place with lower prices. So if possible we should sell our best coffee to lower prices.
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