Presented by: Alex Arellano Luis Mendoza Maurice Hinrich Thomas Dimitriou November 21, 2013 Practicum #8 Bus 306-01 Starbucks Entering a Foreign Market Agenda 1. 2. 3. 4. 5. 6. 7. Company Background Introducing Venezuela Marketing Mix Integrating The Four P’s Timeline Long Term Planning Learning Outcomes Company Background Established in 1971 in Seattle’s Pike Place Market The largest coffeehouse in the world Operates in 62 countries Current stock value is $80.15 •“Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” Venezuela USA: GDP: $15.94 trillion (2012 est.), Country comparison to the world: #2 Tax: 15.6% of GDP Population below poverty line: 15.1% (2010 est.) Median Age: total: 37.2 years Male: 35.9 years female: 38.5 years (2013 est.) Venezuela: GDP $408.5 billion (2012 est.), Country comparison to the world: 34 Tax: 28.7% of GDP (2012 est.) Population below poverty line:31.6% (2011 est.) Median age: total: 26.6 years, Male: 25.9 years female: 27.3 years (2013 est.) Marketing Mix Product Product is the value(s) that Starbucks can offer to customers • variety of drinks • beans sourced from all over the world • strong brand recognition • great atmosphere Product Adaptation •B e t t e r t a s t e a n d a t m o s p h e r e •B r e a k f a s t c o m b o •D u a l p r o d u c t a d a p t a t i o n Place The place involves aspects of transporting and storing goods and how to make them available to the customer. An adequate distribution system is essential. Distribution: - Caribbean coast roughly 9 miles away from Caracas - Major distribution via ports of La Guaira and Puerto Cabello and the international airport of Maiquetía - 3rd most dangerous city in the world, including risk for piracy and robbery - No regulations on import which allow suitable distribution system - National agriculture allows purchase of local coffee beans and other related ingredients Channel Export Contract Manufacturing Direct Sales Price The amount of money charged for a product or service. • Must reflect a supply and demand relationship • Most important element of the marketing mix • Only mix that generates a turnover for the organisation Fixed & Variable Cost Competition Objectives Positioning Target Group Promotion Personal Selling Sales Promotion Advertising Public Relations Promotion Direct Marketing Integrating Price • Adopting pricing strategies •$ 1 = 6 . 2 9 Ve n e z u e l a n B o l i v a r s •S m a l l c u p o f c o f f e e $ 1 •S p e c i a l t y d r i n k s $ 3 . 7 5 Integrating Product •Ta s t e / q u a l i t y s a m e a s o t h e r S t a r b u c k s •R e n o v a t i o n , d e c o r a t i o n p l a n n i n g s t a r t s m i d - M a r c h a n d f i n i s h e s by September •H i r i n g / Tr a i n i n g Integrating Place - Va r i a b l e c h a n n e l s : -Medium trial agreements with clear performance objectives -Register within 60 days of incorporation with the Superintendency of Foreign Investment (SIEX) -Foreign companies are permitted without restriction to purchase real estate Integrating Promotion •M e d i a •R e a c h i n g c u s t o m e r s •H e a v y o n a d v e r t i s i n g , s o c i a l w e b s i t e s , s a l e s promotions •S e l e c t i n g t o u r i s t s , u p p e r c l a s s •M e s s a g e •T h r e e e f f e c t i v e k e y s t o c o m m u n i c a t e m e s s a g e •A t t e n d S t J h o n F e s t i v a l Timeline Long Term Planning Learning Outcomes International Trade Factors International Market Approach Marketing Mix Adaptation Corporate Structure Sources •H T T P : / / W W W . R E P U B L I C A - D E - VENEZUELA.COM/ABOUTVENEZUELA/PEOPLE-OF-VENEZUELA.PHP