Is Starbucks’ profit jump due to global marketing innovation?
Starbucks has seen its profits soar by more than a third in the last quarter, thanks to a major investment in its international marketing activities.
Store traffic increased by 6% in the US, and by 4% internationally, lifting quarterly profits by 37% to $207.9 million (ÂŁ136 million) in the 13 weeks to June 27th.
Overseas growth is a high priority for the business, with the majority of new store openings (250 this year and 500 planned for 2011) happening outside of the US. Revenue rose by nearly 9% to $2.61 billion in Q3, despite 144 under-performing US stores being closed.
“Starbucks’ third quarter results reflect a continuation of the strong performance and momentum we have been driving across our businesses around the world,” said Howard Schultz, chairman, president and CEO of the group.
He added that the recent success is largely down to the “most significant marketing investment in the company’s history”.
Much of this was ploughed into launching Starbucks Via, an instant coffee variety, in US grocery outlets. Since its September debut, the product has performed strongly and is now on track to hit $100 million in sales in its first year.
The global marketing effort has also included announcing upcoming product launches in Japan and the UK, and investing in the blended drinks category, for example with the Frappuccino.
Tags: Global Brand
