Read the case study below and answer the questions that follow: Starbucks Each interaction is unique Over a million times each week, a unique interaction takes place a Starbucks barista hands a customer a beverage across the counter. In doing so, a connection is made. This connection is honoured in every business decision Starbucks makes, from offering high-quality coffee to customerand community engagement. Starbucks was founded over fifty years ago as a single store in Seattle, USA, selling from a narrow shop front. From these humble beginnings, Starbucks offered fresh-roasted whole-bean coffees with an air of romance. Moby Dick inspired the name of the now world-famous brand and upheld the glamourised idea of the high seas and the tradition of early coffee traders. Starbucks has always aimed to be a different coffee company that celebrates coffee as much as it establishes a connection with its customers. With over 32 000 stores worldwide today, Starbucks is recognised as a premier roaster and retailer of speciality coffee and continues to create connections. With its mission - to inspire and nurture the human spirit one person, one cup, and one neighbourhood at a time Starbucks lives the following values: Creating a culture of warmth and belonging where everyone is welcome. Acting with courage, challenging the status quo, and finding new ways to grow our company and each other. Being present, connecting with transparency, dignity, and respect. Delivering our very best in all we do, holding ourselves accountable for results. We are performance-driven through the lens of humanity. After a failed first attempt at establishing Starbucks in the South African market in 2016, the brand now boasts with a total of 54 stores across the country today, under the guidance and leadership of CEO Adrian Mazey. Mazey and his team set out to restructure the business plans for Starbucks South Africa using economies of scale and accelerating the growth plans through their relationship with Shoprite Checkers. By including Starbucks kiosks in the FreshX supermarkets, the Starbucks offering is extended into regions and neighbourhoods where it otherwise might not have been able to reach. It further allows Starbucks access to the Shoprite Checkers' leadership and innovation. This relationship stems from the revised strategy that Starbucks set out for dominance in the South African market. That is, to establish different types of outlets in targeted areas while finetuning the types of products it sells to suit the South African taste. Studies amongst customers showed that South Africans did not like the bitter taste of the brands original coffee beans, as introduced in 2016, and thus a different coffee bean was sought for the South African market. After conducting a comprehensive market opportunity analysis revealed that approximately 200 good opportunities to open Starbucks stores in South Africa exist.

The external environment has a big influence on the strategic marketing practices of any product or brand.

1.1) Analyse the six (6) dimensions of Starbucks external environment. (6x3 =18 marks)

QUESTION 2

2.1) Considering the above statement, evaluate the attractiveness of the upper-middle class market segment for Starbucks. (7x2 = 14 Marks)

2.2) Customer loyalty is an important consideration for any business. With Starbucks having multiple established competitors in the market, customer loyalty becomes especially important.

Select two (2) loyalty marketing strategies that Starbucks can implement. Discuss each strategy you selected with its applicability to Starbucks, and explain one (1) practical way to implement each strategy. (2x4= 8 Marks)

Note to students: Discuss the nature of each of your chosen strategies, explain its applicability to Starbucks, and develop a practical loyalty scheme for each strategy that Starbucks can implement. Consider existing loyalty schemes for other brands, such as the Pick n Pay Smart Shopper as an example. Marks are awarded for your discussion and application.

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