Porter's Value Chain Model and Starbucks Case Study
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Questions and Answers

Which aspect of the marketing mix does 'packaging' relate to?

  • Place
  • Product (correct)
  • Promotion
  • Price

    • Which of the following is not included in the 'promotion' aspect of the marketing mix?

  • Publicity
  • Pricing strategy (correct)
  • Advertising
  • Direct marketing

    • What does 'logistics channel' primarily influence in the marketing mix?

  • Place (correct)
  • Promotion
  • Price
  • Product

    • Which of the following elements affects the 'product' aspect of the marketing mix?

    <p>Design</p> Signup and view all the answers

    How does 'big data' impact the 'promotion' aspect of the marketing mix?

    <p>It enhances targeted marketing efforts.</p> Signup and view all the answers

    What does Porter’s value chain model primarily illustrate?

    <p>The combination of production factors to create value</p> Signup and view all the answers

    Which of the following is NOT a primary activity in Porter’s value chain?

    <p>Firm infrastructure</p> Signup and view all the answers

    What aspect of Starbucks is highlighted as part of the case study?

    <p>Operations</p> Signup and view all the answers

    Which video is assigned for homework that focuses on a specific production process at Starbucks?

    <p>Starbucks Sandwich production</p> Signup and view all the answers

    What is the primary focus of the research task assigned for homework regarding Starbucks?

    <p>Study of customer segments</p> Signup and view all the answers

    In Porter’s value chain model, technology development is classified as what type of activity?

    <p>Secondary activity</p> Signup and view all the answers

    Which of these elements is NOT part of the logistics category in the value chain?

    <p>Marketing &amp; Sales</p> Signup and view all the answers

    What is the purpose of using a value chain model in businesses?

    <p>To describe activities needed to deliver a product or service</p> Signup and view all the answers

    Which of the following components is considered a primary activity in Porter's value chain model?

    <p>Customer Service</p> Signup and view all the answers

    What is the focus of the operations aspect of the value chain?

    <p>Converting inputs into the final product or service</p> Signup and view all the answers

    Which of the following activities is classified as a secondary activity in Porter's value chain model?

    <p>Procurement</p> Signup and view all the answers

    In Porter's value chain model, what connects the value chains of a company and its suppliers?

    <p>Value Chain of Suppliers</p> Signup and view all the answers

    Which activity focuses on the distribution of finished products to customers?

    <p>Outbound Logistics</p> Signup and view all the answers

    What is the main role of Technology Development in the value chain?

    <p>To foster innovation and improve production processes</p> Signup and view all the answers

    How does Marketing & Sales contribute to the value chain?

    <p>By building customer relationships and promoting products</p> Signup and view all the answers

    Which of the following best describes the purpose of Firm Infrastructure in the value chain?

    <p>Facilitating communication and managing finances</p> Signup and view all the answers

    What is one of the key activities involved in operations?

    <p>Mechanical processing</p> Signup and view all the answers

    Which statement best describes Starbucks' revenue generation?

    <p>51% of revenue is generated from company-operated stores.</p> Signup and view all the answers

    What does marketing primarily involve?

    <p>Processes for creating and delivering valuable offerings.</p> Signup and view all the answers

    How many varieties of coffee drinks do baristas at Starbucks prepare?

    <p>87,000 variants</p> Signup and view all the answers

    Which component is NOT part of the operational activities mentioned?

    <p>Customer engagement</p> Signup and view all the answers

    What percentage of Starbucks' net revenue comes from North America?

    <p>More than 50%</p> Signup and view all the answers

    Starbucks operates in how many global markets?

    <p>More than 80 markets</p> Signup and view all the answers

    Which of the following is NOT a type of store operated by Starbucks?

    <p>Franchise stores</p> Signup and view all the answers

    Which age demographic does not specifically fall under the listed segments?

    <p>Adolescents</p> Signup and view all the answers

    What is a characteristic of the 'working class/semi skilled' customer segment?

    <p>Machine operators</p> Signup and view all the answers

    Which socioeconomic class is likely to have functional managers as part of its demographic?

    <p>Lower middle class</p> Signup and view all the answers

    Which factor is not included in the definition of demographic characteristics?

    <p>Personality traits</p> Signup and view all the answers

    What is a common element that influences marketing towards various customer segments?

    <p>Cultural movements</p> Signup and view all the answers

    Which of the following is classified as a traditional marketing technique?

    <p>Television commercials</p> Signup and view all the answers

    What is an example of inbound marketing?

    <p>Search engine optimization</p> Signup and view all the answers

    Which marketing technique involves scheduling targeted e-mails?

    <p>Drip marketing</p> Signup and view all the answers

    Which of the following best describes promotional marketing?

    <p>Offering contests and coupons</p> Signup and view all the answers

    Which technique involves using influencers to connect with customers?

    <p>Social media marketing</p> Signup and view all the answers

    Study Notes

    Agenda for 11 April 2024

    • Recap of Porter's value chain model
    • Case study: Starbucks
      • Operations
      • Marketing
      • Customer service
    • Homework/Self-study

    Homework for 11 April 2024

    • Watch videos on logistics
      • Reverse logistics: [link]
      • Distribution management: [link]
      • Starbucks' sandwich production: [link]
    • Research task: Starbucks customer segments

    Recap: Porter's Value Chain Model

    • Value chain = a business model describing all activities needed to create and deliver a product or service
    • Activities are categorized as primary or secondary
    • Primary activities: inbound logistics, operations, outbound logistics, marketing and sales, customer service
    • Secondary activities: Firm infrastructure, Human Resource Management, Technology development, Procurement

    Starbucks Operations

    • Activities associated with effectively and efficiently transforming inputs into the final product/service
      • Mechanical processing
      • Assembly
      • Packaging
      • Equipment maintenance
      • Quality testing

    Starbucks Example (4 points)

    • Baristas prepare coffee drinks (87,000 variations) and sell them in-store or drive-thru
    • Also, sell sandwiches, cakes, and other beverages
    • Company-operated or licensed stores in over 80 markets; 32,000 stores globally
    • 51% of revenue from company-operated stores, 49% from licensed stores
    • Similar number of stores in North America and internationally; but most net revenue from North America

    Marketing & Sales

    • Marketing: the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society
    • Marketing activities: advertising, sales promotion, sales field service, special offers, choice and maintenance of distribution channels, pricing
    • Aims of marketing: increase brand awareness, product/service penetration into target markets, customer acquisition, customer satisfaction
    • Marketing plan: outline of the specific actions to encourage potential customers to buy the products/services
    • Components include market research, target audience, marketing mix, goals, objectives, media & tactics, budget, content plan & schedule

    Marketing Mix (4 Ps)

    • Product
    • Price
      • Cost, discount, margin, credit terms, price changes
    • Promotion
      • Advertising, personal selling, direct marketing, publicity
    • Place
      • Coverage, distribution logistics channel, communication channel

    Types of Marketing Techniques (Examples)

    • Traditional: newspaper, television, radio
    • Online: video, banner, search engine, e-mail
    • Outbound: cold calling, newsletter, billboards
    • Inbound: search engines, free articles for clients/suppliers
    • Trade shows: participation in public trades to display products
    • Direct: direct mail, direct selling, telemarketing
    • Niche: companies filling identified gaps
    • Drip: scheduled targeted emails
    • Social media: YouTube, Twitter, Facebook, influencer contact
    • Referral: word-of-mouth, customer referrals
    • Promotional: contests, prizes, coupons, free samples

    Marketing: Target Audience - Customer Segments

    • Socioeconomic groups
    • Geographic position
    • Gender
    • Age & demographics
    • Tastes & fashion
    • Business sectors

    Marketing: Segment Value

    • Recency: When was the last time they bought?
    • Monetary: What value did they buy?
    • Frequency: How often and for how long do they buy?

    Sales

    • Sales: a business activity selling products/services with various methods
    • Forms: Direct sales, channel sales (B2B/B2C), agency based sales (sales agents, telemarketing, retail), traveling salesman, digital sales
    • Techniques: upselling, cross-selling, cold calling, auctions, social selling

    Research Task: Starbucks' Customer Segments

    • Main customer segments? Search internet, Starbucks websites, and documents for segmentation criteria.
    • Typical customer worth per year? Calculate yearly value of a typical Starbucks customer; define criteria and document calculations.

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    Description

    This quiz covers the core components of Porter's value chain model, focusing on the case study of Starbucks. It explores various operational aspects, including marketing and customer service, as well as the relationship between logistics and product delivery. Prepare to dive into the primary and secondary activities that make a business thrive!

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