Mktg3040 Services Marketing: Critical Thinking Assessment Answer

Selected a case study of your choosing, you will need to apply critical thinking and problem solving skills in relating services marketing theory to a real-world situation in which a problem needs to be solved for the service organisation in the case.

You are encourage to take a service consultant approach in identifying the problem and providing actionable recommendations to the service organisation on how the problem(s) can be rectified and/or managed.

Introduction: 

In the increased uncertainty in business environment, integrating creativity in the internal functionality of a firm is one of the major factor. This is the way, through which the intense competition in the market can be handled. According to West et al. (2015) there lies the significance of critical thinking, which paves the way for corporate entities to generate new ideas there by run the business with utmost efficiency. Present Paper will cover the significance of critical thinking and problem solving in the context of Starbucks’. The problem, faced by Starbucks’ will be discussed. Recommendation will also be provided for the firm, on the way through which the firm can resolve issues through Critical thinking approach.

Identification of the

problem: 

Starbucks’- one of the major coffee chain is successfully running their business throughout the world. The company has experienced sustainable growth along with striking rate of profit for decades. However, there were certain issues, being faced by Starbucks’ in the way of running their business in Australia. Proctor (2014) commented that it is that the coffee culture of Australia is extremely mature and sophisticated. Still, intense competition in Australian retail market has created barrier for Starbucks’ to introduce lifestyle coffee experience in the nation. The inclusion of wide range of smaller boutique-style coffee shops have restricted the giant like Starbucks’ to open coffee shops in Australia. The notion of intimacy, personalization and familiarity with the local taste of coffee has made it difficult for Starbucks’ to drag the attention of the customers. Based on the discussion of Spanjol et al. (2015) it can be said that lack of effective market expansion strategy is one of the biggest issue faced by Starbucks’. This issue has made it difficult for the firm to enter in the tough retail market of Australia.  

Chernev (2018) showed that during 2007 to 2008, the food and beverage industry of Australia has experienced profit of more than $9.7. In-spite of this growth rate, the chances of getting success in Australia is really uncertain for Starbucks’. Being the giant in global coffee house chain, the existence of non-traditional competitors like Dunkin’ Donuts, Krispy Kreme, 7-Eleven have restricted Starbucks’ to run their business successfully in Australia.  In addition that, Gloria Jean’s- the famous local coffee maker is leading the high street part of Australia. This is also a great challenge for Starbucks’ to catch the attention of local customers of Australia. At the same time, the companies like Coffee Club and Wild Bean are offering in-store experience among the customers, which is similar to that of Starbucks’. These are the reasons, for which Starbucks’ faced troubles in running business in Australia (Payne and Frow 2014).  

Conclusion and recommendation on how the problem can be resolved through Critical thinking approach: 

Based on the discussion, it can be concluded by saying that, intense competition in Australia due to wide range of coffee makers had created barrier for the companies like Starbucks’ to run their business successfully in the nation. As Starbucks’ is the giant in the coffee house chain, it is imperative for the firm to devise their business strategy. This is the key of coping up with intense competition in Australian market. In the contemporary business scenario, critical thinking plays a significant role in the way of running business in innovative way. As stated by Tomczak et al. (2018) this is acting as one of the major strategic marketing tool, through which sustainable growth of business can be promoted. As Starbucks’ is facing massive challenges due to intense competition in the market, it is recommended for them to incorporate strong business strategy in order to enter in Australia.

In-depth market research is the initial step of entering into a new market. This serves the firms with the capability to explore the strategies of competitions and design business plan accordingly in order to stay aside from the competitors. According to the case study, the existence of coffee house chains like Dunkin’ Donuts, Krispy Kreme, 7-Eleven is increasing the toughness of Australian retail market. Thus, it is suggested for Starbucks’ to explore the factors such as pricing strategy and quality of products and design their business strategy accordingly (David et al. 2017).

Based on the case study, it is evident that, the local coffee makers like Coffee Club and Wild Bean are providing services to the customers, which is similar to that of Starbucks’. This is similarity is creating restriction for Starbucks’ to drag a potential pool of customers. In order to mitigate this issue, it is recommended for Starbucks’ to make some of the unique products. This is the way, through which they can be able to create positive perception among the customers. Value Proposition is one of the major factors, through which a striking experience among the customers can be created. Foxall (2014) observed that to strengthen the value of business, it is recommended for Starbucks’ to serve high quality of site roasted coffee. A soothing environment inside the coffee shop should be created for the sake of creating a charming experience among the customers.

Freshly roasted coffee is to be served in order to ensure the quality of products. Excessive price of Starbucks’ products is a major issue, which creates a reluctant attitude among the customers to visit the coffee shop. As coffee is one of major part of lifestyle among Australian people, they always seek for pocket friendly price to have coffee. Thus, it is suggested for Starbucks’ to set competitive price of their products (West et al. 2015). This is the way, through which they can offer products among the customers, which is the key of dragging the attention of a potential base of customers. Offering third place experience plays a major role in dragging the attention of customers. In the tough retail market of Australia, Starbucks’ should place their shops at convenient location, where people can spent some quality time. In addition to that, the stores must be designed in such a manner, which can help in making the customers to stay longer. Through this way, Starbucks’ can be able to stay aide from the hardcore competition and thereby strengthen their position in Australian retail market. 

Reference list:

Chernev, A., 2018. Strategic marketing management. Cerebellum Press.

David, M.E., David, F.R. and David, F.R., 2017. The quantitative strategic planning matrix: a new marketing tool. Journal of Strategic Marketing, 25(4), pp.342-352.

Foxall, G., 2014. Strategic Marketing Management (RLE Marketing). Routledge.

Payne, A. and Frow, P., 2014. Developing superior value propositions: a strategic marketing imperative. Journal of Service Management, 25(2), pp.213-227.

Proctor, T., 2014. Strategic marketing: an introduction. Routledge.

Spanjol, J., Tam, L., Qualls, W.J. and Bohlmann, J.D., 2015. Enacting Change in Strategic Marketing Decisions: The Role of Regulatory Focus in Teams. In Marketing in Transition: Scarcity, Globalism, & Sustainability, 8(2), 37-37.

Tomczak, T., Reinecke, S. and Kuss, A., 2018. Marketing Implementation and Management Control. In Strategic Marketing, 9(5), 223-244.

West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage. Oxford University Press, USA.