Environmental Factors Essay

813 words - 3 pages

Starbucks has wide range of business activity. These activities allow the company to use numerous ways of product distribution. With the company operating in many locations worldwide, environmental factors play a major role in marketing decisions. Each distribution channel is affected differently and the company's flexibility in the marketing plan allows the company to adjust their strategies to meet the needs of the environmental factors.Environmental factors can be political, social, ecological, cultural, technological and ethical in nature. Starbucks must consider what the impact each of these factors may have for them. Not considering these factors can result in the failed attempt to market a product, which may be successful domestically, in other countries where there is a significant market potential (Perrault and McCarthy, 2004).DemographicStarbucks originated in the United States but has expanded into many different demographics over the years. It had been a trend to try the Starbucks coffee. Almost everyday a row of students were lined up in front of the shop during that period of time. However, after a while, the trend had calmed down. Starbucks main focus is not just students. One of its main target markets is those in the labor force. Starbucks products are priced a little higher than their competitors; therefore, its target customers are adults that can afford the prices. Another potential customer would be the tourists passing by strategically placed shops.Population facts are important to Starbucks because they can give Starbucks valuable statistics. People ages 15-64 make up the largest percentage of the population, and therefore will have greater control of the market than any other sector. This implies that the most important target markets for Starbucks are people within this age group. The ethnic background is also an important to a company because it influences tastes, trends, perceptions, values and beliefs of an individual.EconomicDuring a recession, it could be expected that consumers would spend less on premium luxury items such as Starbucks' coffee. The economy is struggling today and in return people are spending even more carefully. Starbucks needs to provide coffee of higher quality with more reasonable price. Starbucks is attracting increasing numbers of local customers as well, mainly upwardly mobile white-collar workers, who are more willing to spend. Majority of Starbucks' customers fall into this category. Although Starbucks attract white-collar workers, peoples spending on food and drink have declined the past several years. Starbucks needs to pay attention on this change and make...

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