MGT 201 Saudi Electronic University The Coffee Wars Case Study Questions

  

Description

Department of Business Administration
College of Administrative and Financial Sciences
Assignment 1
Due Date: 6/3/2021@ 23:59
Course Name: Marketing Management
Student’s Name:
Course Code: MGT201
Student’s ID Number:
Semester:
CRN:
II
Academic Year: 1441/1442 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade: Marks Obtained/Out of
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
•
Assignments submitted through email will not be accepted.
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Students are advised to make their work clear and well presented, marks may be reduced for poor
presentation. This includes filling your information on the cover page.
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Students must mention question number clearly in their answer.
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Late submission will NOT be accepted.
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Avoid plagiarism, the work should be in your own words, copying from students or other resources
without proper referencing will result in ZERO marks. No exceptions.
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All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures
containing text will be accepted and will be considered plagiarism).
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Submissions without this cover page will NOT be accepted.
ASSIGNMENT-1
Weightage: 5 Marks
Learning Outcomes:
➢ Demonstrate a solid understanding of overall marketing concepts, goals and strategies within the
context of organizations goals and strategies. (Lo 1.1)
➢ Ability to carry out objective and scientific analysis of consumers’ needs and wants (Lo 2.3 & 2.6).
Case Study
Read the Chapter Case Study “The coffee Wars” from Chapter 2 “Global Marketing” Page: – 55 given
in your textbook – “Marketing” (7th Edition) by Dhruv. Grewal and Michael. Levy (2020) and answer
the following Questions:
Assignment Question(s):
1. Perform a SWOT analysis for Starbucks and Dunkin Donuts. (2 Marks) (Minimum 200 Words)
2. Which Growth strategies have been pursued by Starbucks and Dunkin Donuts in the past and which
strategies do you believe will be most successful for the two firms in the future? Why? (1.5 Marks)
(Minimum 150 Words)
3. Which marketing metrics would be most helpful for an executive in charge of developing new products
for a coffee Chain? (1.5 Marks) (Minimum 150 Words)
Note: – Support your Answers with the course material concepts, principles, and live examples from
the textbook and the Local market and also support with the scholarly, peer-reviewed journal
articles if available.
Answer:
1.
2.
3.
THE COFFEE WARS
In the coffee and breakfast market, Starbucks vigorously competes with the likes of
Dunkin’
Donuts and, more recently, McDonald’s. Independent coffeehouses and smaller regional
chains, seen by many as more hip and less commercial, also continually nip at Starbucks’
heels. However, the “coffee war” between Starbucks and Dunkin’ Donuts is particularly
fierce in the areas in which they compete head-to-head, even though each chain has its
geographic
strongholds—Dunkin’ in the East and Starbucks in the West.64 Part of the reason for
this infamous battle might be the dominance of these two brands: Together, Starbucks
and
Dunkin’ Donuts control well over half of the coffee market in the United States. 65
Moreover,
Starbucks can claim some victories over Dunkin’ Donuts, considering that its net
revenues
and stock prices have risen continuously since 2009.66 By 2014, its global revenues had
reached a record-setting $16.4 billion, and in 2015, its stock surged by more than 50
percent
for the year.67
Starbucks’ ubiquitous stores—from long-standing locations in U.S. cities and towns to
international expansion into a vast range of new nations—are easy to locate and visit. A
recent
count showed that the chain maintains more than 22,000 stores, spanning 67 countries.
68 By
making sure its stores, with their familiar siren logo, are easy to find, Starbucks
guarantees that most people can readily find a place to get their coffee fix. For the vast
majority
of buyers, an addictive Salted Caramel Mocha, or just a great cup of black coffee, is
convenient to find and very familiar.
There are plenty of jokes about how Starbucks manages to charge upwards of $5 for a
jolt of caffeine, but a quick glance at its marketing methods and strategies helps explain
why
it can do so. The products it sells are appealing to customers and fulfill their needs: They
taste good, are available readily and conveniently, and offer the benefit of helping them
wake up to start their day (or stay awake for a long night of studying). Thus, the exchange
of
money for coffee—or tea or juice or yogurt or a nice pastry—is a good value for
consumers,
despite the relatively high cost.
Starbucks also connects with fans through social marketing channels, including its
popular
My Starbucks Idea site. The site is an innovative approach to developing new products.
Customers share ideas about everything “Starbucks,” from store designs to new drink
recipes.
They can also join one of the many discussions in the customer forums. The site connects
customers to its Twitter and Facebook sites too, and it also links users to its mobile apps.
New capabilities available through the apps allow consumers to order their preferred
beverage in advance and pay for their drinks or other products, then pop into the store to
grab their purchases without ever having to wait in line.
When it comes to Starbucks’ competition with Dunkin’ Donuts, history shows that the
two early morning giants actually had coexisted nicely for many years: Dunkin’ Donuts
made the donuts, and Starbucks brewed the coffee. Starting in 2000 though, Dunkin’
Donuts
slowly started encroaching on the upscale coffee market with the Dunkaccino. It also
joined the “espresso revolution” in 2003, before formally declaring in 2006 its explicit
intent
to enter a head-to-head competition with Starbucks.69
Along with expanding its menu to feature specialty espresso drinks, Dunkin’ Donuts
launched a smartphone app that competes directly with Starbucks’ widely popular
version. In
particular, the new Dunkin’ Donuts app aims to extend the battle to the mobile field. It
offers
not just mobile ordering but also mobile delivery services, called Door Dash. The delivery
service
began in Dallas, Texas; plans are in place to expand it to other major U.S. cities.70
Although Dunkin’ Donuts still trails Starbucks as a global company—with only 3,100
stores in 30 countries71—it uses this relatively small size and regional feel strategically,
leveraging
these attributes to adjust flexibly and integrate itself with local communities. Accordingly,
it has ranked tops in the market for customer loyalty since 2007.72 This focus on
loyalty also resonates with the company’s chosen sponsorship efforts. It lends its support
to
professional sports teams with strong local and national followings, including all the
major
league Boston-area teams (Red Sox, Patriots, Celtics, and Bruins), the Dallas Cowboys,
New York’s Yankees and Mets, and the Tampa Bay Rays. Expanding on the strategy, both
abroad and to less famous leagues, Dunkin’ Donuts partners with the Liverpool Football
Club and the National Women’s Hockey League.
Through these partnerships with sports teams, Dunkin’ Donuts encourages consumers
to interact more closely with it. For example, New England customers receive
inducements
to become DD Perks members and use its mobile app. With its “Pats Win, You Win”
promotion,
DD Perks members who pay through the app receive a free cup of coffee each time
the New England Patriots win a game. The popular, vastly successful promotion has
continued
for several seasons, during which the Patriots continue winning lots of games, thus
bringing lots of excited fans into Dunkin’ Donuts stores. The competition between these
two brands is well established and likely to continue,
especially as Dunkin’ Donuts continues to move away from being exclusively a donut
shop
and toward becoming a more coffee-centered business. As big new competitors such as
McDonald’s
and Taco Bell enter the breakfast, coffee, and espresso markets, both Starbucks
and Dunkin’ Donuts are likely to continue coming up with new ways to maintain their
existing
customer base, then expand it in the United States and abroad.

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