Starbucks Essay Example | Topics and Well Written Essays - 2000 words

Starbucks - Essay Example The next portion of the essay will describe theoretical background of marketing concepts. Marketing Concepts Research scholars such as Burrow (2011), Sandhusen (2000), and Mercer (1996) have stated that organizations need to decide marketing strategy in terms of marketing mix, segmentation and target market, in order to become successful in competitive business environment. Kotler et al (2009) have pointed out that organizations need to change marketing mix such as product, price, place and promotion in accordance with the situational perspective, in order to achieve competitive advantage. Kotler et al (2009) have tried to establish link between implanting right marketing strategy and competitive advantage model proposed by Michael Porter (1980, 1985, and 1991). Elements of marketing mix can be explained in the following manner: Product Companies manufacture new products in order to match steps with the ever-changing nature of consumer demand. Organizations develop products through m ultiple stages like generating idea about new products by using primary and secondary research; selecting the potential idea through idea screening, testing the concept of product development with the help of feedback of customers, analyzing the business aspect of the product development such as market volume, price estimation, market size calculation etc., launching the product in small market segment in order to test acceptance of the product, manufacturing the product on commercial basis after achieving success in test marketing phase and finally commercializing the product. Ansoff matrix can be used in order to understand the significance of product concept in marketing. (Source: Stone, 2001, p. 51) According to Ansoff matrix, companies develop product strategy due to four reasons, 1- increasing market penetration by existing products in existing markets with an intention to decrease risk factors associated with entering new market, 2- developing new products for the existing ma rket in order to achieve competitive advantage over competitors, 3- launching an existing product in new markets in order achieve business growth in foreign shore without investing huge amounts of capital in new product development, and 4- launching new products in new markets in order to create brand awareness among customers. Mintzberg et al (2003) have stated that companies need to decide the product portfolio in accordance with the demographic and societal trends of a particular country. Price Companies decide the price of products in accordance with macro environmental characteristics of market and in some cases organizations decide the price of products in order to enhance brand image. For example, Apple use premier pricing policy or assigning high price on products in order to show class and aristocracy, while Wal-Mart uses cost orientation strategy in order to offer everyday merchandises at everyday low price (EDLP) to customers. Adopting EDLP model has helped Wal-Mart to ac hieve price competitiveness over their competitors. Place Companies decide distribution strategy in order to distribute products to customers. Organizations design distribution channel backed by retailers, wholesalers, online sales channel, c&f agents, company sales executives etc., in order to