STARBUCKS

Strategic Market Analysis in Dubai

Group 6
Anubhav | Apratim | Jatin | Meenal | Saumya

Nature of Market
In Dubai, coffee is available through specialist coffee shops, shisha coffee shops and restaurants Coffee breaks have been an essential part of Arabic culture and a favorite pastime of Arab people Most coffee shops in Dubai are open for much longer hours, up to 15 hours a day Leading international coffee chains are - Starbucks, Costa Coffee, Second Cup, Barista, Seattles Best Coffee and The Coffee Bean and Tea Leaf In 2011, coffee industry of Dubai registered growth of 9% reaching AED 289 million*
Attributed to growing cafe culture and heavy advertising from the main manufacturers

* Source: EuroMonitor report

Macroeconomic factors
POLITICAL Autocratic government, but committed to liberal economic and pro-business policies. No duty and minimum import restriction SOCIAL Low level of unemployment, Majority expats potential customers, coffee break culture, ECONOMIC High GDP per capita AED 162000, high quality infrastructure, high per capita spending in cafes AED 1200 TECHNOLOGICAL Trade-free zones and the duty is very low (4%) so coffee machines can be imported at lower prices

LEGAL Tax-free, law requires 51% of partnership by a local firm and rest 49% by foreign firm, except free zones,
* Source: EuroMonitor report

ENVIRONMENT Coffee is most popular beverage in Dubai, 85% increase in coffee and tea consumption

Customer Analysis
Nickname of product market Specific Need Dimensions (benefits sought) Customer related characteristics

Comfortable Emirati locals love socialising. After meals, Mr. Al Tufayl and environment, up men head to their favourite caf for snacks, friends market location, open coffee or sheesha. till late night Mr and Mrs Shammas, with kids Peter, Dan, Stella, Shaheen and friends Kids playing area, healthy menu Affordable pricing, located near their college or university, good music People here enjoy spending time with their families. Caf should provide an environment where everyone in the family can relax As bars are not common in Dubai, adolescents and university students go to coffee shops to spend good time with their friends

Customer Analysis
Nickname of product market Specific Need Dimensions (benefits sought)

cont.

Customer related characteristics

Good music, located Ghazal, Fadida near malls, diet and their friends conscious menu

Women in Dubai go to caf to keep them in mood to get through the day and gossip with their friends

Mr. David Cook Wi-Fi, newspapers, Corporate executives here have lunchtime and his business near their office, take- meeting, so they prefer caf with quiet partner a-away surroundings. The need dimensions common to all the above categories are: variety of snacks and beverages, clean and hygienic environment and comfortable lounging area.

Competitor Analysis
Targets professionals and adults, along with students The menu of Costa also includes tea Located at business and academic locations, along with the leisure spots, totaling 27 outlets Priced comparable to Starbucks Baristas were warm and welcoming, just as the environment in the outlet

Promoting via in store advertisement, loyalty cards and social media

According to coffee drinkers forum of Dubai:
Better quality than Starbucks But, annoying music in the outlets

Competitor Analysis
Very popular amongst locals here Target segment Arabs

Apart from coffee and snacks, Caf Bateel also has food on its menu
Its menu also includes the local coffee preparations such as Quhwa, Turkish coffee, date syrup layered coffee etc

Prices are 10-15% higher than that of Starbucks

Has 7 outlets in Dubai, all at high-end locations Ambience is very luxurious

Baristas serve with lan and sophistication.

Promote only through in store advertisements and affiliate marketing.

Internal Analysis
Wide portfolio of drinks, which include coffee, iced teas and other beverages and food Localized products during Ramadan Date Frappuccino Hardly invests in advertising Stationed itself in all the prime locations of Dubai Employees known as partners and are very knowledgeable about the different varieties of coffee
Their pay package known as Your Special Blend

Starbucks recently dropped Starbucks Coffee from their logo

Possible reason - want to introduce other beverages and not confusing its customers

Starbucks Brand Identity

Brand essence
Experience d'excellence

Core identity
Product quality Consistent coffee, have excellent sourcing practices Relaxed environment Provides a warm environment, a third place Trained baristas Knowledgeable and motivated baristas

Extended identity
Truly global established brand, present in 61 countries of the world Environment conscious Recycling, Energy Conservation and Water Conservation Starbucks logo The siren logo represent the values that Starbucks stands for Personality - Mirrors the trait that we seek in a best friend: gracious, encouraging, respectful and genuine

Value proposition
Functional benefits - Quality food and choice of beverage, New innovative flavors Emotional benefits - Relaxation in a welcoming atmosphere and a promise of a good time with friends Self expressive benefits - Social status

Relationship
Emotional engagement between customers and baristas