Ethical Issue of Starbucks in Marketing

Starbucks: The Marketing of Ethics:

Starbucks recently switched the majority of its coffee to Fairtrade in the UK and Ireland. After years of over-marketing their fair trade credentials in their stores and on their marketing and educational materials, the reality is catching up with the rhetoric.

Mind you, the rhetoric has stepped up another gear too, with a massive multimillion-pound ad campaign launched to squeeze out as much ethical mileage as possible. Like the big budget television ad focused on Fairtrade and Ghana currently being run by Cadbury, the Starbucks campaign marks an interesting point where, in this country at least, Fairtrade has become not so much a burdensome extra cost for companies as a powerful marketing tool.

Starbucks has always been a good target for fair trade campaigning. This leviathan of the coffee shop market markets itself very explicitly as an ethical corporation. They have their own in-house certification system through which they claim to pay higher than market prices for their coffee. And they are the world's largest single buyer of Fairtrade coffee.

Now that the company has converted all its espresso-based drinks in the UK and Ireland to Fairtrade, this is predicted to double their Fairtrade coffee purchasing, bringing the total to 12% of their global coffee purchases. The mighty corporate beasts can deliver substantial scale and impact: Starbucks will now be helping more than 100,000 coffee farmers and their communities. The company also continues to sell Fairtrade chocolate, as they have for a number of years.

They teeter on the edge of being misleading: a casual reading of the advert above might imply that Starbucks itself has become a “Fairtrade” company, with the smaller print admitting that of course it is actually a proportion of the company's products that are Fairtrade certified.

What's particularly interesting about this ad campaign is its scale – it's the biggest Starbucks has run in the UK and Ireland since it opened its first stores here in 1998 – and the centrality of the Fairtrade messaging. Fairtrade has emerged as a central plank in the company’s fightback from relatively dire financial woes in 2008 when profits ground to a halt and hundreds of stores were closed.

Although Fairtrade will be more expensive and more political for companies to undertake than most corporate social responsibility schemes or fluffy pieces of 'fairwash', the rate of return as a marketing expense is probably very good, especially in a climate of steadily increasing socially conscious consumerism.

Fairtrade has proven transformative power for producers, it is the only rigorously audited certification system out there that fundamentally addresses the terms of trade between the developed and developing world and, despite the best efforts of right wing think tanks and journalists, has proved pretty much unassailable. It is now a force that can help spearhead the triumphant return of Starbucks to profits and growth and re-position the company as the ethical option for coffee drinkers.

So although Fairtrade does a good job as a marketing or risk management tool for companies like Starbucks and Cadbury, it is important for progressive voices within the movement to keep re-stating Fairtrade’s core values and functions as a development system for producers and an education project for consumers.

We should also keep putting Fairtrade developments in context.

Starbucks’ increased commitment to ethical practices only extends so far. The company’s green logo – the mermaid with no nipples – and its 17,000 stores worldwide are synonymous with a particularly aggressive form of globalisation and cultural homogenisation. This has involved using unsavoury tactics to expand and maintain their market share, such as targeting successful independent stores, buying out competitors’ leases, operating at a loss, and saturating local markets.

The uncomfortable truth is that even a 100% Fairtrade Starbucks would be going ultimately against the grain of a sustainable economy. Starbucks’ number one top priority is rapacious growth, and this growth can never stop. We need sustainable communities on this side of the world as well as in developing countries.

Introduction Starbucks goes to China Ethical Issues of Starbucks China Starbucks future Founded in 1971 in Seattle 1987 : Starbucks is bought by a former employee, Howard Schultz Implemented the Italy coffee culture in North America Introduced Starbucks as a « Third Place »

Starbucks goes global Introduction Starbucks goes to China Ethical Issues of Starbucks China Starbucks future • First store outside US: Tokyo Japan in 1996 • Two main methods : licensing and franchising • Find the right local partner • Focus on Asia: 850 stores in 14 Asian.

Starbucks goes to China Introduction Starbucks goes to China • First in Chinese hotel to test the market • 1999: opened first store in Beijing World Trade Center Joint venture for each part of China: • Northern China - joint venture with Beijing Mei Da coffee company • Eastern China - partnered with Taiwan-based Uni-President • Southern China - worked with Maxim's Caterers in Hong Kong Ethical Issues of Starbucks China Starbucks future.

Conquering the land of tea Introduction Starbucks goes to China Ethical Issues of Starbucks China Starbucks future • Introduce the general public to the intricacies of coffee • Capitalize on the teadrinking culture of Chinese consumers by introducing beverages using popular local ingredients such as green.

Starbucks becoming Chinese Introduction Starbucks goes to China • Traditional Chinese items, such as festival moon cakes, curry puffs, and sausage rolls • Cibled young people opened to Western culture • Used Chinese calendar to promote their coffee Ethical Issues of Starbucks China Starbucks future.

Why did it work? Introduction Starbucks goes to China Ethical Issues of Starbucks China Starbucks future • Manage to become the « Third Place » and create « The Starbucks Experience » • Going in joint venture and adapting to Chinese market • Manage to position as an aspirational purchase and status symbol • Good brand recognition and image • Good employer

Starbucks’ ethical issues Introduction Starbucks goes to China • Opening in Forbidden City • Kids appeals • Overpriced compared to other countries Ethical Issues of Starbucks China Starbucks future.

 

Starbucks expansion Introduction Starbucks goes to China Number of Starbucks in China 2000 1500 1500 1000 500 0 361 406 496 646 Ethical Issues of Starbucks China Starbucks future • Hear Music with Concord Music Group • Sell Starbucks products inside the store • Xi’An Women & Children Activity Center through Starbucks fundation • Increasing number of stores in the next years.

The promises the company made to the customers.

Whether the company is persuasive towards the satisfaction of the customers.

Whether the company is capable of making the commitments.

Whether the company see the customer satisfaction as their opportunity.

Whether the company see tangible results for giving best customer satisfaction.

Benefit and challenges of planning to control companies.

Willis (2006) said that, we should have a target and plan for the following reason:

Planning saves time: Planning saves time and sometimes waste time as well. By planning or step by step process, we don’t need to think after the decision making. But, taking the decision whether the company should go for the plan or not takes a lot of time. Therefore, we need to go for the instinct rather than taking time for the decision to do the right thing at the right time.

Planning is the framework of decision making: By planning we can be ready for what will happen when we do something and if we do something, what can go wrong. By that way we view from the top that, where we are. If we take the all the decision at the beginning, there is less chance that the project will give no result. If we work by our instinct rather than not thinking about the consequence of our action, sometimes we have to fall in the position where we should not be there.

Planning is needed for resource management: We should always have it in advance what we need to have in future. This will save time and ensure the availability of the resource. To have the resource raising fund is important as well. To raise fund, we have to do budgeting and look for the best possible source of fund to collect the money in a least cost.

Planning helps to achieve goal towards vision of the company: Planning is like watching the company from the top. By planning a good monitoring is possible and we can always understand where we are.

Planning helps to set priorities and critical time of the project: In planning there should be a lot of different stages and some stages depend on each other to complete. Therefore, by planning, lag time can be reduced to minimum and we can understand the time frame of the each stage. By planning, we can also understand we stage are in critical position and which stage is in flexible position to implement.