Unit 2 Marketing Principles Assignment

Marketing Principles Assignment


Marketing can be defined as a process where producer of goods or services communicates with value of the product or services to the prospective customers. This communication is essential, since entire selling of the product is based on how effective is the process of marketing (Kotler & Armstrong, 2013). Based on the case study of Starbucks this case study will analyse the entire concept of marketing, the process involved in it, and various other aspects which are necessary to understand the importance marketing.


P1.1 Explain the various elements of the marketing process of star bucks

For a business organisation to succeed in its marketing, preparation of a strategic marketing plan is extremely important. Entire process of marketing planning process has been displayed below, and consists of following stages:

  • Goal Setting
    • Corporate Objective
  • Analysis of Current situation
  • Creation of marketing strategy
    • Marketing objectives and strategies
    • Forecast of expected results
    • Creation of alternative plans
  • Allocation of marketing resources and monitoring

Figure 1 Marketing Planning Process

Figure1: Marketing Planning Process

Two elements of marketing process w.r.t to Starbucks is as follows:
Goal Setting: This phase of marketing process identifies the core mission with Starbucks has established its business. Mission of Starbucks is “to inspire and nurture the human spirit – one person, one cup, and one neighbourhood at a time.”This clearly indicates that how Starbucks has focused on creating a market for coffee which is not only of high quality but is also affordable by people.
Analysis of Current Situation: Market Audit: This phase of marketing process focuses on analysis of the market condition and how a business can establish itself. In this regard Starbucks international expansion strategy can be considered. As a result of market audit Starbucks was able to understand that in order to expand in different geographies it is essential to hire multi lingual and multinational managers who can help the company in its worldwide expansion.
One important component of marketing planning process is SWOT analysis. SWOT analysis is a useful tools for marketers who can utilise it to understand the environment in which a business functions (Friesner, 2011). It is an important tool because it helps the organisation to identify the differentiating factor a product has against the competitor. Other benefits of SWOT analysis are:

  • It helps in better understanding of the business
  • SWOT analysis helps in addressing the weakness of the organisation
  • It helps effective development of business strategy and goal to achieve them

SWOT analysis of Starbucks is as follows:


  • World’s most valuable coffee brand with total worth of $ 4 billion
  • Starbucks is currently the largest coffeehouse chain in the world with stores at more than 23,000 locations
  • Efficient employee management of more than 160,000 employees
  • Vast experience of more than 42 years in field of coffee as a beverage
  • Sound financial record over several years



  • More than 70% of Starbuck’s business is based in United States, there is requirement to expand rapidly in other countries
  • Compared to other coffee brands Starbucks is considered to be a relatively expensive brand.
  • There has been ongoing debate over health implication of coffee drinking, which might be detrimental for brand growth

  • Expansion opportunity in developing countries such as Brazil, India and other Asian countries.
  • Scope in diversifying new coffee based beverages
  • Opportunity for co-branding with other manufacturers in food and drink industry



  • Post inception of Starbucks as a coffee brand, there has been entry of numerous other brands.
  • Saturation of market in developed countries such as United States and United Kingdom
  • Various trademark infringement
  • Rapidly rising prices of ingredients such as coffee beans and dairy products

P1.2 Evaluate the benefits and costs of a marketing orientation for Star Bucks

Market orientation approach defines the approach with which an organisation like Starbucks reacts to customer requirements (Narver& Slater, 1990).Thus decision which are taken are based purely on the basis of what customer need, rather than what business assumes or think about the customer. Starbuck’s growth and success to a great extent can be attributed to its market oriented approach.
Since its inception in 1971, Starbucks has evolved as an “anyone can drink coffee’ brand. Starbucks based on its marketing orientation has got following benefits:

  • Opened more than 50 outlets in developing countries such as India within span of one year.
  • Gained more than 65% of coffee based beverage market share since 2005 onwards till 2012.
  • Year-on-year growth of 5% despite of gradually saturating market.
  • Rapidly growing brand awareness about Starbucks especially in countries where recently it has started its operations. For example within 6 months of its operation in India, Starbucks got a customer base of more than 75,000.
  • Marketing oriented approach has also helped Starbucks in achieving 30% return customer for consecutively 5 years since 2006.
  • In a country like Sri Lanka, it became a Super brand within 5-7 years of operations.
  • Market orientation has also resulted into enhanced customer experience. For example based on a survey conducted in United States in 2012, more than 80% of the teenagers mentioned Starbucks as their first preference as compared to any other coffee brand.
  • Based on the sustained efforts in getting customer feedback, Starbucks has been regularly launching variety of coffee based beverages to cater to different categories of customer. This can be understood by the fact that Starbucks offer more than 14 types of coffees and 4 decafs in their stores across globe.

In general market orientation has helped Starbucks in establishing its brand in countries where it is trying to expand its presence (Miles & Arnold, 2001). In terms of cost Starbucks spent more than 15% of its revenue on marketing budget in year 2012 in Asia region. This reflects the fact that how Starbucks has been aggressively focusing on expansion in growing countries. Based on its marketing orientation Starbucks is expecting to see a growth of 4.5 % from 2013 to 2014 based on its concentrated customer centric approach.

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Course Syllabus

Marketing Principles Assignment



    Q1.1 Identify at least four different types of organisations that exist in the U.K.

    An organisation is an institution which is either owned privately or along with the public and government. An organisation is associated with either a product or services which is being traded under the guidance of an executive leadership to gain defined goals.
    Four different types of organisations existing in the UK are:
    1. Public sector organisation: They are run by the governments for providing to people. People pay taxes to the government, which in turn invests in providing infrastructure to the public at large.
    2. Private sector organisation: They are run by private individuals. Examples of private organisations are sole traders, partnership firms, companies (public & private), and francORGANISATIONAL PURPOSES OF BUSINESSEShisee. They run private companies with major focus on profits, services, growth.
    3. Voluntary groups: These are not owned by any individual or individuals. They are run under the guidance of the board with selfless interests.
    4. Public private partnership: These are companies formed by the government and then bring in a private entity to run day-to-day operations. They are governed by the board leadership.
    5. Sole trader: Business owned by one person
    6. Franchise: This is a private business company which adopts the operational rights of a different company.
    Two organisations chosen are Tesco and HSBC.
    Reason for selecting the Tesco is its sheer size of retail development and its consistent expansion drive in the Asian and other markets around the world. It sells multiple products through its hundreds of retail stores to wholesalers and consumers. It is preparing its entry in the Indian retail market as the FDI market has opened up. Tesco is listed in the UK stock exchange market.
    Reason for selecting HSBC is its global presence which has helped to garner real time news data about major investment markets and offers various service to their clients around the world. HSBC is incorporated in England and Wales in the name of HSBC holdings and its entities around the world offers range of services, which becomes part of the holding company HSBC. HSBC is listed in London, Paris, New York, and Hong Kong stock exchange market.

    Q1.2 Select an organisation of your choice and describe the extent to which this organisation meets the objectives of its stakeholders.

    The organisation selected is HSBC bank.
    A stakeholder is an individual, a company or a group which has some direct or indirect interest or concern in a listed company. It can be a stakeholder by buying shares of the group or by taking an equity interests and having some advisable role to play in its day-to-day operations.
    Primary stakeholders of HSBC bank are its customers, clients, governments, employees, owners, and the communities. HSBC helps customers by selling their services to them and offering them value for money products and after sales services. It helps its clients by giving them optimum return on their investments made into the bank and reliable advice for investments. It helps the government by properly and loyally paying taxes on time, which in turn helps the economy to remain progressing. It helps by investing in corporate social responsibility segments and help communities, especially in areas which are directly affected by the company’s operations. It helps its employees to have a well-paid job with substantial fulfilment of the employee’s personal and financial goals. It also helps its employee by offering job security, some kind of status and growth in business. Finally the company helps its owners who have invested capital in it by giving them profits and growing the business management in a consistent manner.
    HSBC bank also has different objectives in various countries it operates in. It has social corporate responsibility division in all countries it operates in and thus participates in social activities and fulfils its obligations.
    In addition, it operates on a global level and hence, it shuffles clients’ investment decisions and provides them a global vision for their overall investments and strategy. In this way it fulfils its domestic as well as international clients’ responsibilities.
    By taking part in international negotiations between mergers and acquisitions, it manages to build various economies and fulfils its requirements towards countries in which it is present, by bringing in revenues.

    Q1.3 Explain the responsibilities of the organisation you selected in Q1.2.  In addition, explain the strategies employed to meet these responsibilities.

    Various responsibilities of HSBC bank towards its customers is to offer them best services in banking, investments, advice, loans, equity markets, stock markets, etc. The banks responsibilities towards its owners are to make profits in the business and keep looking for new avenues for investments and growth. The banks responsibilities towards the respective government are to make substantial contribution to the economy by participation in the market. The banks responsibilities towards its employees are to offer them good development in the company, good paying jobs fulfilling their personal and financial goals. The banks responsibilities towards their clients are to offer them the best of services as investment advice, services, wealth management services, etc. The banks responsibilities towards the communities is to give them back and more if they have lost something as a result of their operations.
    The bank has certain milestones for achievement to offer profits to the owners who have invested capital. This is being done by excellent practice on a daily basis and excellently managing the entire process, and perceiving any forthcoming risk to avoid failures, etc. The back designs some reward programs for encouraging employee participation which in turn will produce good results. The employees who are promoted depending on their performance has a sense of satisfaction and growth in their life. The bank has some social responsibility programs which invests in education, healthcare and providing basic infrastructure to the less deprived in small villages. The bank has the best hired portfolio managers who advice their clients to develop life-long relationship with them for sustained investments. The bank offers some services compared to their competitors for generating life-long banking customers.


    Q2.1 Using a country or countries of your choice, explain how two economic systems attempt to allocate resources effectively.

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