Generally, Starbucks has invested more on public relations and service than on traditional advertising and sales campaigns. On the official website of Starbucks about service, the statement goes as: “Our Commitment to Being a Deeply Responsible Company Contributing positively to our communities and environment is so important to Starbucks that it’s one of the six guiding principles of our mission statement. We work together on a daily basis with partners (employees), suppliers, farmers and others to help create a more sustainable approach to high-quality coffee production, to help build stronger local communities, to minimize our environmental footprint, to create a great workplace, to promote diversity and to be responsive to our customers’ health and wellness needs. ” (n. p. ) In this light, Starbucks may initiate a service program in Oslo. Geographically, Norway is rich in natural resources and can serve as the theme for the Environment conservation program of Starbucks tied up with a non-governmental organization.
The CIA Factbook provides that in Norway, there is about 3. 8 million of the total population who have Internet access. Thus, Starbucks may also ride the popularity of Internet blogs. Scott (2007) argued that blogs may not be created by a journalist but those blogs can be helpful in marketing and PR because it will allow companies to
- monitor what millions of people think about them, their product and their organization;
- participate in the consumers’ conversations by commenting on their blogs; and
- begin and shape those conversations by creating and writing their own blogs.
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(p 50) H. Budget for 3 Years All the computation below only shows estimate costs for one branch of Starbucks in Oslo. The projected annual gross sales pegged at $30,686,499. 00 of gross sales as mentioned in the previous section were derived as follows:
56,048* x 1. 50USD** = 84,072. 00 USD*** x 365 days = 30,686,499. 00
*Units Sold: 10% of the Oslo Population = 56,048 **Unit Price ***Daily gross sales Assuming that Starbucks will spend .
10 cents of USD for every unit it sells, a daily budget for marketing cost will be valued at 8,407.
2 USD or an annual marketing cost of 3,068,628 USD. In addition, provided Starbucks will employ 5 Norwegian, it will spend 118,800 USD annually.
14. 85 USD* x 8 hours x 365 working days = 43,362 USD** x 5 employees = 216,810 USD
**Annual salary of one employee
To better control average store opening costs, Starbucks centralized buying, developed standard contracts and fixed fees for certain items, and consolidated work under those contractors who displayed good cost-control practices (Thompson, Shah, et. al. ). Hence, Oslo Starbucks will be able to cut store opening stores. Unfortunately, the data gathered was limited and did not provide the exact cost of opening a new store. Based on the computations above, one branch of Starbucks in Oslo will yield an annual sales of (excluding other costs, i. e. utility cost, transportation cost) $27,401,061.
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