4 - Starbucks Coffee Co. MGMT 324 Spring 2009 Jinsuh Lee...

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Starbucks Coffee Co. MGMT 324 Spring 2009 Jinsuh Lee
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Spring 2009 - MGMT 324 Jinsuh Lee - Purdue University 2 Case offers a bit of everything Understanding Consumers Consumer Behavior Implementation: Product, Price, Promotion, & Distribution
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Spring 2009 - MGMT 324 Jinsuh Lee - Purdue University 3 The coffee market of the 80’s The key firms in the market were The “big three,” Nestle, General Foods, and P&G controlled 60% of the roasted coffee and 80% of the instant coffee The dominant player for the distribution channel for coffee were Supermarkets Forced small suppliers to out of business and spurred consolidation
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Spring 2009 - MGMT 324 Jinsuh Lee - Purdue University 4 The coffee market of the 80’s The main factor for competition was Price To gain market share, big processors often went through price wars and promotions The quality of the product was dropping with its price Processors added cheaper robusta beans to the existing blends Instant or soluble coffee relied on inexpensive beans
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Spring 2009 - MGMT 324 Jinsuh Lee - Purdue University 5 Understanding consumers Why was the 80’s the right time for Schultz to import the Italian coffee bar concept into the U.S.? Specialty coffee was a niche market that could be a mass market How could a concept like Starbucks succeed in a competitive landscape marked by commoditized products and price competition?
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Spring 2009 - MGMT 324 Jinsuh Lee - Purdue University 6 Consumer behavior By the 80’s the coffee consumption was
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4 - Starbucks Coffee Co. MGMT 324 Spring 2009 Jinsuh Lee...

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