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Business Proposal Mba 510

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Business Problem Proposal

University of Phoenix

The team has submitted a business proposal that discusses the business decisions and subsequent decline of market shares of the non-coffee drinker with Starbucks Coffee domestically and internationally. Starbucks is a publicly traded company that offers a variety of products, including: brewed coffees, Italian-style espresso beverages, cold blended beverages, roasted whole bean coffees, tea products, sodas and coffee liqueur (Datamonitor, 2007).

Starbucks is the leading retailer and roaster for brand specialty coffee in the world. It has over 7,500 stores located worldwide. As Starbucks continues to expand, it will encounter all sorts of new product markets, with new and demanding customers for unique and appealing products (A5 Consulting Group, 2004). Starbucks revenue is growing by 20% a year and is opening approximately three stores every day. Starbucks is capable of managing its successful operations by having steady market growth. It achieved this by financing through their cash flow instead of franchising, selling stock or increasing their financial leverage.

Starbucks Coffee Company is experiencing problems with market shares of the non-coffee drinker within the United States and International franchises. To ensure market shares growth, Starbucks has repositioned one of its current products. The Frappuccion line, product has been extended to include three new flavors; (1) Double Chocolate Chip CrÐ"Ёme, (2) Vanilla Bean CrÐ"Ёme, and (3) Strawberries and CrÐ"Ёme, introduced throughout the summer months to enhance the market shares of non-coffee drinkers. Faced with the market share problems of entering a new competitive market Starbucks must compete to retain brand recognition of its primary products, and increase awareness of the new products to remain a competitive coffee industry.

This paper will discuss the dependent and independent variables of the team’s study as well as the primary and secondary data used to support the study. The team will state the applicable null and alternate hypotheses as well as the methodology used to test the team’s hypotheses. An appropriate sample size will be used to ensure that the team arrives with a representative sample that will be sufficient to use when analyzing the sampling data to make informed business decisions off the statistical data gathered during study. Finally the team will make recommendations to Starbucks based off the sample data gathered and analyzed.

The team gathered data from several resources to support Starbucks needs to deal with customers’ cultural preferences in all its worldwide locations to maintain customers’ loyalty in advertising and marketing the non-coffee drinker and the need to enhance this variable to ensure market shares among non-coffee drinkers.

The data supports the need for Starbucks to enhance the company’s advertising and marketing of the non-coffee drinker to remain competitive in the coffee industry. Furthermore, the team has acquired data supporting the competition of Starbuck market shares with the non-coffee drinker population.

Independent and Dependent Variables

The dependent variable used for this project will be the lack of commercial advertising of Starbucks to remain a competitive in the industry with non-coffee drinkers and the independent variables will be the non-coffee drinker target groups; (1) married couples age 25-54, (2) school children, and (3) young adults 18-24 (see Appendix A). The key to using these variables are accurate and reliable data. Valid data is also reliable data, but reliable data is not always valid data (Cooper & Schindler, 2003, p. 235).

Primary and Secondary Data

Primary data will be taken from Starbucks Marketing Strategic Plan, titled “The Non-Coffee Treat” 2004, by A5 Consulting Group, which provides detailed information regarding the market shares of the non-coffee drinker. The high-level of data from this strategic plan shows valid and reliable data about the efforts of Starbucks to reach the non-coffee drinker to increase market shares in the industry of Frappuccion line products. The collected data also focused on (1) cultural preferences, (2) population of interest, and (3) competition pricing.

In addition, the primary data will also provide information on survey sampling conducted by employees of Starbucks to gather information on the atmosphere of Starbucks Coffee Shops.

Secondary data can save a firm a time and money by using publicly available information as well as information already in the firm’s database that was collected for other purposes but which can be used for the project at hand. However, the use of secondary data must be carefully considered and used only when applicable to the research question.

Starbucks will need to gather accurate and reliable secondary information, which can be very useful in the position of bench marketing other companies to explore opportunities of industry success outcome. Starbuck’s dependent variable consists of commercial marketing issues. Starbucks can benefit from the company’s competitors and begin commercial advertising to enhance market shares of the non-coffee drinker.

According to Matt on Marketing Advertisement, (2007), from U. S. market shares of 2005, Starbucks ranked number 6, in the Top 10 Restaurant Chains in the United States, with 1.7 in market shares, while the competitor McDonald’s ranked number 1, with 7.7 in market shares (see Appendix B).

The secondary data in the sampling of the Top 10 Restaurant Chains can be viable data for Starbucks to aggressively market the non-coffee drinker through (1) Newspapers, (2) Network Television, and (3) Sports Television. Starbucks, CEO Howard Schultz, stated his focus is on better products and better customer experience that allows them to continue to grow loyalty and enhance market shares without the associated media costs. If Starbucks wants to increase market shares of the non-coffee drinker the company must actively commercialize the franchise to include all populations (Heinz, 2007).

Starbucks has started its business by introducing a widening of the Frappuccino line produced for the non-coffee drinker. Appearing at the new market, Starbucks faces many problems such as competition to drink brand recognition of its products, promotion of its new product line. So, one can make



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