CHAPTER1

1.1-Introduction
Advertising in business is a form of marketing communication used to encourage,
persuade, or manipulate an audience(viewers, readers or listeners; sometimes a specific
group) to take or continue to take some action. Most commonly, the desired result is to
drive consumer behavior with respect to a commercial offering, although political and
ideological advertising is also common. This type of work belongs to a category
called affective labor.
In Latin, ad vertere means "to turn toward". The purpose of advertising may also be to
reassure employees or shareholders that a company is viable or successful. Advertising
messages are usually paid for by sponsors and viewed via various old media; including
mass

media

such

as

newspaper, magazines,

television

advertisement,

radio

advertisement, outdoor advertising or direct mail; or new media such as blogs, websites
or text messages.
Commercial

advertisers

often

seek

to

generate

increased consumption of

their products or services through "branding", which involves associating a product name
or image with certain qualities in the minds of consumers. Non-commercial advertisers
who spend money to advertise items other than a consumer product or service include
political parties, interest groups, religious organizations and governmental agencies.
Nonprofit organizations may rely on free modes of persuasion, such as a public service
announcement (PSA).
Modern advertising was created with the innovative techniques introduced with tobacco
advertising in the 1920s, most significantly with the campaigns of Edward Bernays,
which is often considered the founder of modern, Madison Avenue advertising.
In 2010, spending on advertising was estimated at $143 billion in the United States and
$467 billion worldwide
1

1.2-Objectives of the study

To study the history and origin of Advertising
To study the Importance of Advertising in the business world
To learn about the origin, History of Pizza Hut and its various partners
To study the Advertising strategies of Pizza Hut

1.3-Significance of the study

This Study is important because it gives us an idea why is advertising so important in
today competitive business environment. It shows us that through an advertising how a
company can make more customers and earn huge profits. This study also gives us an
idea of the various advertising strategies used by Pizza hut which definitely help us to
know how Pizza hut is making money through advertising.

1.4-Research Methodology
To undertake research for the current study secondary information was collected from
reference books, Published and unpublished Reports, Financial statement and report of
Pizza Hut Company, News papers, Articles and Websites.

1.5-Literature review
2

a. Manendra Mohan, attempted to study that majority of industries in today

corporate world rely on advertising in order to survive the competive market.
Consequently the profession of advertising has gains much importance and
recognition in today society. The book gives an idea of a how to evaluate an
advertising effectiveness trough pre testing and post testing methods.
b. Laura Ries, attempted to study Today's major brands are born with publicity, not
advertising. A closer look at the history of the most successful modern brands
shows this to be true. In fact, an astonishing number of brands, including Palm,
Starbucks, the Body Shop, Wal-Mart, Red Bull and Zara have been built with
virtually no advertising.
c. Meir Liraz attempted to study the different steps which helps to develop effective
advertising for your business. According to Dun & Bradstreet, 90% of all business
failures analyzed can be traced to poor management. This is backed up by my
own experience. The number of guides, worksheets provided makes it easy to
apply all knowledge to your business. It gives an idea of the following:
How to develop an advertising budget\
How to decide the best advertising media for you
How to evaluate your advertising results
How to use signs to your advantage
How to create effective campaigns
d. Bruce.C.Brown attempted to study of how to build, promote, and make money off
of your Web site or brick and mortar store using the Internet, with minute. The
internet allows one to promote, advertise, and market one business in a cost
efficient manner so that one can spent money in other areas of business. thus there
is no other marketing tool than internet at any one disposal where millions of

people have the ability to reach out to directly to one business organization from

anywhere in the universe.

CHAPTER 2
Conceptual Frame work

Advertising- the activity or profession of producing advertisements for

commercial products or services

P.R-Public Relations
Copy writer- writing copy for the purpose of advertising or marketing.
The copy is meant to persuade someone to buy a product, or influence their

beliefs.
Conventional approach:
Brand-name , term, design that identifies one seller product distinct from those of

seller products
Pre-testing methods-Testing the advertisement campaigns before it runs.
Post testing methods: Testing the campaigns after their are run

Manendra Mohan , 2008 ,Tata MC Graw-Hill PublishersLaura Ries ,2009

,Harper Collins Publishers

b. Mier Liraz , July 28 2014 ,Liraz Publishing

c. Bruce.Brown ,Dec 9 2011 ,Atlantic Publishing

CHAPTER 3
ADVERTISING
Egyptians used papyrus to make sales messages and wall posters. Commercial
messages and political campaign displays have been found in the ruins of Pompeii and
ancientArabia. Lost and found advertising on papyrus was common in Ancient
Greece and Ancient Rome. Wall or rock painting for commercial advertising is another
manifestation of an ancient advertising form, which is present to this day in many parts of
Asia, Africa, and South America. The tradition of wall painting can be traced back to
Indian rock art paintings that date back to 4000 BC.
In ancient China, the earliest advertising known was oral, as recorded in the Classic of
Poetry (11th to 7th centuries BC) of bamboo flutes played to sell candy. Advertisement
usually takes in the form of calligraphic signboards and inked papers. A copper printing
plate dated back to the Song dynasty used to print posters in the form of a square sheet of
paper with a rabbit logo with "Jinan Lius Fine Needle Shop" and "We buy high quality
steel rods and make fine quality needles, to be ready for use at home in no time" written
above and below is considered the world's earliest identified printed advertising medium.
In Europe, as the towns and cities of the Middle Ages began to grow, and the general
populace was unable to read, instead of signs that read "cobbler", "miller", "tailor", or
"blacksmith" would use an image associated with their trade such as a boot, a suit, a hat,
a clock, a diamond, a horse shoe, a candle or even a bag of flour. Fruits and vegetables
5

were sold in the city square from the backs of carts and wagons and their proprietors used
street callers (town criers) to announce their whereabouts for the convenience of the
customers.
In the 18th century advertisements started to appear in weekly newspapers in England.
These early print advertisements were used mainly to promote books and newspapers,
which became increasingly affordable with advances in the printing press; and medicines,
which were increasingly sought after as disease ravaged Europe. However, false
advertising and so-called "quack" advertisements became a problem, which ushered in
the regulation of advertising content
Functions of advertising
1. To differentiate the product from their competitors
An important function of advertising is the identification function, that is, to identify
a product and differentiate it from others; this creates an awareness of the product and
provides a basis for consumers to choose the advertised product over other products
this creates an awareness of the product and provides a basis for consumers to choose
the advertised product over other products. The identification function of advertising
includes the ability of advertising to differentiate a product so that it has its own
unique identity or personality. There are four additional ways to differentiate your
offering from the competition and increase your differentiation: leveraging the
brand, innovating your product and packaging in a way that creates an aesthetic
beyond the functional. None of these methods are expensive. All are ways that can
increase your perceived value to the customer and increase your market share.
Example: Garnier frutics (shampoo) the shampoo bottle have the different color from
all other shampoo available in the shelf. The bottle of the shampoo is unique from all
others.
Example: apple laptops make them different from others as the WHITE color and
logo of APPLE on back of the screen.

2. To communicate product information

Another function of advertising is to communicate information about the product, its
attributes, and its location of sale; this is the information function. Product
information communicated to the customers in manner that meets their information
needs. Most consumers tend to discount the information in advertising because they
understand that the purpose of the advertising is to persuade. Making an advertising
message believable is not easy; though often it is sufficient to make the consumer
curious enough to try the product. Such curiosity is often referred to as interested
disbelief. Advertisers use a variety of devices to increase the believability of their
advertising: celebrities or experts who are the spokespersons for the product, user
testimonials, product demonstrations, research results, and endorsements.
Example: Ponds age miracle, in that ad the celebrity HADIQA KAYANI is informing
the consumers about the benefits of it. That how the old women can look younger by
using it continuously. It will make you fair cream plus it reduces freckles plus it can
be used as a sun block as well it will make you look young.
3. To urge product used
The third function of advertising is to induce consumers to try new products and to
suggest reuse of the product as well as new uses; this is the persuasion function. The
basic function of advertising is to provide constant reminders and reinforcements to
generate the desired behavior the advertiser wants from them. This is a particularly
effective function in the long run as reminders and reinforcements register in the
consumers' minds, becoming the base on which they shape their future decisions.
Sampling in the way to urge the product using.
Example: Fair and lovely as we know that it will make a girl look fair and prettier in 4
weeks.
4. To expand the product distribution
When the consumer comes to know about the particular product from the
advertisement he/she wants to try that new product. They go to shops to buy the
7

product; if the new product is not available in a shop then the shopkeeper consults the
distributor to make that product available in his shop. It is basically to provide the
product all over market. It is necessary to make sure that product should be accessible
to everyone. Availability of product effect the distribution.
Example: Wateen telecom and Motorola Partner to Expand Distribution of
Videoconferencing Product Line in Pakistan. So as many people are getting to know
about this facility they are running towards the franchises to avail it. So for that
Wateen should expand their distribution all around the cities.
5. To increase brand preference and loyalty
Marketing is a moving thing. As your needs are changed your preferences are
changed. When the product delivers the promised quality, service and value, it creates
satisfied customers who become instrumental in spreading a favorable word-ofmouth. Satisfied customers also develop brand preference; each product features and
uses are written on the product.
Example: 99% girls who are not married will not look at the ad of pampers or any
milk powder for children but when they will get married their interest will
automatically move towards such ad'
Brand loyalty is a long-term customer preference for a particular product or service.
Brand loyalty can be produced by factors such as customer satisfaction with the
performance or price of a specific product or service, or through identifying with a
brand image. It can be encouraged by advertising
6. To reduce overall sales cost
When a product is selling you have to teach the people about the product. Like if we
would advertise through newspapers, TV, broachers and internet, it would cater huge
sum of masses and if you do individually it would be more costly and time
consuming.

Example: Coke targets their consumers on a very large scale through mass media
whereas Makka cola advertise on smaller scale or go door to door to advertise their
product.
7. Creates new Demands
Advertising have to create new demands they should educate the people about more
and more new things coming up in the market. Each year new products, including line
extensions and new brands are introduced into groceries and drugstores.
Example: Wateen telecom is offering wireless internet chips, video conferencing and
WIMAX services as they are introducing new services in market its creating new
demands
Advertising is the best way to communicate to the customers. Advertising helps informs
the customers about the brands available in the market and the variety of products useful
to them. Advertising is for everybody including kids, young and old. It is done using
various media types, with different techniques and methods most suited.
Objectives of Advertising
Four main Objectives of advertising are:

Trial
Continuity
Brand switch
Switching back

Lets take a look on these various types of objectives.

Trial: the companies which are in their introduction stage generally work for this
objective. The trial objective is the one which involves convincing the customers to buy
the new product introduced in the market. Here, the advertisers use flashy and attractive
ads to make customers take a look on the products and purchase for trials.

Continuity: this objective is concerned about keeping the existing customers to stick on to
the product. The advertisers here generally keep on bringing something new in the
product and the advertisement so that the existing customers keep buying their products.
Brand switch: this objective is basically for those companies who want to attract the
customers of the competitors. Here, the advertisers try to convince the customers to
switch from the existing brand they are using to their product.
Switching back: this objective is for the companies who want their previous customers
back, who have switched to their competitors. The advertisers use different ways to
attract the customers back like discount sale, new advertise, some reworking done on
packaging, etc.
Basically, advertising is a very artistic way of communicating with the customers. The
main characteristics one should have to get on their objectives are great communication
skills and very good convincing power.
Advertising plays a very important role in todays age of competition. Advertising is one
thing which has become a necessity for everybody in todays day to day life, be it the
producer, the traders, or the customer. Advertising is an important part. Lets have a look
on how and where is advertising important:
Advertising is important for the customers
Just imagine television or a newspaper or a radio channel without an advertisement! No,
no one can any day imagine this. Advertising plays a very important role in customers
life. Customers are the people who buy the product only after they are made aware of the
products available in the market. If the product is not advertised, no customer will come
to know what products are available and will not buy the product even if the product was
for their benefit. One more thing is that advertising helps people find the best products for
themselves, their kids, and their family. When they come to know about the range of
products, they are able to compare the products and buy so that they get what they desire
after spending their valuable money. Thus, advertising is important for the customers.
Advertising is important for the seller and companies producing the products
10

Yes, advertising plays very important role for the producers and the sellers of the
products, because
Advertising helps increasing sales
Advertising helps producers or the companies to know their competitors and plan
accordingly to meet up the level of competition.
If any company wants to introduce or launch a new product in the market, advertising
will make a ground for the product. Advertising helps making people aware of the new
product so that the consumers come and try the product.
Advertising helps creating goodwill for the company and gains customer loyalty after
reaching a mature age.
The demand for the product keeps on coming with the help of advertising and demand
and supply become a never ending process.
Advertising is important for the society
Advertising helps educating people. There are some social issues also which advertising
deals with like child labor, liquor consumption, girl child killing, smoking, family
planning education, etc. thus, advertising plays a very important role in society.
Disadvantages of advertising
(1)Adds to Costs:
An organization has to spend large amount on advertising. It increases the cost of the
products. To meet this expenditure, price of the product is raised. No manufacturer pays
for the advertising expenses out of his pocket. Advertising, therefore, leads to
unnecessary rise in prices. In this reference it is said that advertising costs are passed on
to the consumers in the form of high prices.
(2) Undermines Social Values:

11

Advertisement is a sort of day-dreaming for the people. These days it is taking the people
away from reality and into the realm of artificiality. Through its medium people get
information about new products.
Only very few products are of any use for them. The brilliance of new products really
gets on their nerves. They want to buy them but have no resources at their command.
Consequently, they start feeling upset with their present status. Taking it as a social evil, it
can be said that advertisement undermines social values.
(3) Confuses the Buyers:
Many a time distorted version of reality is shown in the advertising. Believing in
advertising, consumers buy the product. On its use, they feel cheated.
They come to realize later that the information given in the advertisement was something
else whereas the actual product was quite different from it. Thus, people lose confidence
in advertising because of wrong presentation. In this reference it is said that advertising
confuses rather than helps.
(4) Encourages Sale of Inferior Products:
Every manufacturer projects his product as superior one in the advertisement. Therefore,
the buyer is unable to decide as to which product is really good.
Consequently, it is difficult to get good quality product even after paying a handsome
price for it. If a seller gets good price for some inferior product, it becomes a habit with
him. It affects other sellers also. Therefore, it is said that advertisement encourages the
sale of inferior products.
(5) Some Advertisement is in Bad Taste:
Many times, foul language and objectionable pictures are used in advertising in order to
attract a particular class. They may be insulting to a particular class. It causes decay of
social values.
12

Such kinds of advertising are generally opposed by the people as it hurts their feelings. In
this reference it is said that some advertisements are in bad tastes.
Types of Advertising
Print Advertising
If an advertisement is printed on paper, be it newspapers, magazines, newsletters,
booklets, flyers, direct mail, or anything else that would be considered a portable printed
medium, then it comes under the banner of print advertising.
Guerrilla Advertising
Also known as ambient media, guerrilla advertising (or marketing) has become
prominent over the last 20 years. It is a broadly used term for anything unconventional,
and usually invites the consumer to participate or interact with the piece in some way.
Location is important, as is timing. The driving forces behind guerrilla advertising or
marketing are and innovation, not a large budget. Quite often, you will ask for
forgiveness rather than permission with these campaigns, and they will spread via word
of mouth and so
Broadcast Advertising
A mass-market form of communication including television and radio, broadcast
advertising has, until recently, been the most dominant way to reach a large number of
consumers.
Outdoor Advertising
Also known as out-of-home (OOH) advertising, this is a broad term that describes any
type of advertising that reaches the consumer when he or she is outside of the home.
Public Service Advertising
Unlike traditional commercials, Public Service Advertisements (PSA) are primarily
designed to inform and educate rather than sell a product or service.
13

Product Placement Advertising

In a nutshell, product placement is the promotion of branded goods and services within
the context of a show or movie, rather than as an explicit advertisement.
Cell Phone & Mobile Advertising
A relatively new form of advertising, but one that's spreading rapidly, uses cell phones,
iPads, Kindles, Nooks, and other portable electronic devices with Internet connectivity.
Current trends in mobile advertising involve major use of social media such as Twitter
and Facebook.
Online advertising (aka digital)
If you see an advertisement via the Internet (World Wide Web), then it is classified as
online advertising.
Evaluating the effectiveness of Advertising
How effective is an advertising or public relations campaign? What made it work or fail?
What can you do to make the next campaign better? Capitol Research Services helps
clients answer these questions with advertising effectiveness studies.
The combined effect of the creative design and communication channel helps
determine campaign success. Our experienced researchers will select the best tools to
evaluate both of these factors.
Creative testing is ideally conducted before the ad placement, though post launch
testing is also conducted by many companies to identify problems.
Pre-testing can be executed in almost every stage of the creative development, from text
statements of ad concepts, story board or animation version to the complete version. The
higher your production cost, the earlier you should put the idea to test. While qualitative

14

tests are more common for pre-testing, quantitative tests are also used frequently to reach
statistically valid conclusions.
Post-testing examines the actual reach and persuasion of the campaign, and is most
commonly done quantitatively. Brand and ad awareness, content recall, motivation power
and many other measures are used to gauge the overall effectiveness. The findings are an
important component in calculating the return on communication investment.
Some of the pretesting methods are:
Consumer Jury
Consumer reaction has greater validity than the reactions of non-consumers. Consumers
can provide true information on reaction to an advertising campaign. Others may
underestimate or overestimate the reactions. The copy, illustrations, filming techniques,
layout, etc. can be properly evaluated by the consumers concerned with the product. The
consumer jury technique is adopted for print media, broadcast media and direct mail.
Print Media:
The consumers selected may be asked either to evaluate an advertisement or rate two or
more advertisements. Each respondent is asked to express his preference for each
advertisement. The most common method is to insert a questionnaire in the advertisement
and request the readers to indicate their preferences. Copywriters test their creations on
consumers. Some newspaper advertisers invite consumers their office and invite their
reaction to the advertising copy or copies of magazines are sent to some consumers to
find out their reactions. The reactions of consumers are evaluated and any inconsistency
in advertising is removed.
The major advantage is that they separate out the weak advertisements from the strong at
a low cost and high speed. The actual consumers may suggest improvements and
modifications. Only conscious ratings are evaluated. Reply to the questions in a very
conscious manner may not give a correct impression of advertisements.

15

Broadcast Media:
Consumers are asked to come to the television studio where they are shown different
television programmes for final consideration. Sometimes, the television advertisement
messages are pre-examined in different localities.
Direct mail test:
The direct mail test is used through the mail. The post cards containing copy appeal, each
with a reply-paid card, is sent free-of-cost to consumers, who are required to give their
evaluation.
Storyboard Tests:
The storyboard prepared for television advertising is tested before it is used. The
storyboard pictures are transferred to a film strip and the audio section onto a tape. Vision
and sound are synchronized and shown to an audience for evaluation. This test uncovers
the unnecessary part. The important part of advertising is accepted for telecasting. The
anteroom trailer method is used to test the commercial. The anteroom contains
magazines, newspapers, distractions and television recorded programmes.
Laboratory Tests:
The respondents are placed in laboratory situations and are asked to explain the
measurements regarding the effectiveness of the advertisement. Laboratory conditions
offer a controlled environment that excludes the variables which may invalidate the test.
It is used to measure awareness, attention, desire, retention, etc. For example, the
respondents are taken to a theatre, mock-up supermarkets or some other place for
experimental purposes.
Some of the post testing methods are as follows:

Recognition Test: Recognition test involves the ability of viewers to correctly

identify ad, brand, or message they previously exposed to. The types of recognition
test are:

16

Starch Test - The Starch test is applied only to print ads that have already

run. The interviewer shows each respondent a magazine or newspaper

containing the ads being tested. For each ad the interviewer asks the
respondents to reply to ad related questions.
Bruzzone Test - The Bruzzone test is conducted through mail surveys.

Questionnaires containing frames and audio scripts from television

commercials are sent to respondents and respondents are asked whether they
recognise the ad and brand.

Recall or Impact Test: The recall test is designed to measure the impression of
readers or viewers of the advertisement. If a reader has a favorable impression of the
advertisement, he will certainly retain something of the advertisement. The measures
of interest would be obtained by interviewing the readers or viewers or listeners, days
after the advertisement or commercial is appeared in the newspaper, or on T.V.
Interviewer asks the readers or viewers to answer some ad related questions, and in
response to the question asked, the reader reveals the accuracy and depth of his
impression.

Careers in Advertising
CAREER SCOPE IN ADVERTISING INDUSTRY
Advertising world has led to the emergence of many new roles within the advertising
profession. In the new edge of ad world, advertising goes beyond its conventional
approach. For the non-conventional and conventional advertising approach, Industry
requires well groomed people who can develop innovative and creative new idea.
Flexibility and competence is must for the industry as the Ad World is highly creative as
well as dynamic.
Advertising careers are diverse and can run across a variety of departments, offering
positions in the fields of creative departments, production, media, and research. The
ultimate goal is to meet the clients goals of increasing sales as much as possible. Public
17

relations services are often involved with businesses, governments, and institutions and
can help them make effective decisions. Students of an advertising school may choose to
pursue a career as a:
Advertising Media Planner
Media Researcher
Copywriter/Illustrator
Account Planning
Creative Department
Production Manager
Director of Advertising
Director of Public Relations
Public Relations Specialist
CHAPTER 4:
Introduction to Star Bucks
Starbucks Corporation, doing business as Starbucks Coffee, is an American
global coffee company and coffeehouse chainbased in Seattle, Washington. Starbucks is
the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with
21,536 stores in 64 countries and territories, including 12,218 in the United States, 1,716
in China, 1,330 in Canada, 1,079 in Japanand 808 in the United Kingdom.
Starbucks locations serve hot and cold beverages, whole-bean coffee, microground
instant coffee, full-leaf teas, pastries, and snacks. Most stores also sell pre-packaged food
items, hot and cold sandwiches, and items such as mugs and tumblers. Starbucks
Evenings locations also offer a variety of beers, wines, and appetizers after 4pm. Through
the Starbucks Entertainment division and Hear Music brand, the company also markets

18

books, music, and film. Many of the company's products are seasonal or specific to the
locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery
stores.
From Starbucks' founding in 1971 as a Seattle [coffee bean] roaster and retailer, the
company has expanded rapidly. Between 1987 and 2007, Starbucks opened on average
two new stores every day. Starbucks had been profitable as a local company in Seattle in
the early 1980s[8] but lost money on its late 1980s expansion into the Midwest and British
Columbia. Its fortunes did not reverse until the fiscal year of 1989-1990, when it
registered a small profit of $812,000. By the time it expanded into California in 1991 it
had become trendy.The first store outside the United States or Canada opened in Tokyo in
1996, and overseas stores now constitute almost one third of Starbucks' stores.The
company planned to open a net of 900 new stores outside of the United States in 2009,but
has announced 300 store closures in the United States since 2008.
History
he first Starbucks opened in Seattle, Washington, on March 30, 1971, by three partners
who met while they were students at theUniversity of San Francisco: English
teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker. The three
were inspired to sell high-quality coffee beans and equipment by coffee roasting
entrepreneur Alfred Peet after he taught them his style of roasting beans.] Originally the
company was to be called Pequod, after a whaling ship from Moby-Dick, but this name
was rejected by some of the co-founders. The company was instead named after the chief
mate on the Pequod, Starbuck
However, Bowker has a different recollection of how the company got its name. He
recalls that the co-founders were desperately close to naming the company "Cargo
House" until Heckler mentioned that he thought words that began with "st" were
powerful ones. That led Bowker to make a list of "st" words, and somebody somehow
saw the old mining town of Starbo in an old mining map
The Starbucks store at 1912 Pike Place. This is the second location of the original
Starbucks, which was at 2000 Western Avenue from 1971 to 1976.
19

The first Starbucks cafe was located at 2000 Western Avenue from 19711976. This cafe
was later moved to 1912 Pike Place Market; never to be relocated again. During this
time, the company only sold roasted whole coffee beans and did not yet brew coffee to
sell. The only brewed coffee served in the store were free samples. During their first year
of operation, they purchased green coffee beans from Peet's, then began buying directly
from growers. In 1984, the original owners of Starbucks, led by Jerry Baldwin, purchased
Peet's. During the 1980s, total sales of coffee in the US were falling, but sales of specialty
coffee increased, forming 10% of the market in 1989, compared with 3% in 1983. By
1986 the company operated six stores in Seattle and had only just begun to
sell espresso coffee.
In 1987, the original owners sold the Starbucks chain to former employee Howard
Schultz, who rebranded his Il Giornale coffee outlets as Starbucks and quickly began to
expand. In the same year, Starbucks opened its first locations outside Seattle atWaterfront
Station in Vancouver, British Columbia, Canada and Chicago, Illinois, US. By 1989 46
stores existed across the Northwest and Midwest and, annually, Starbucks was roasting
over 2,000,000 pounds (907,185 kg) of coffee.
At the time of its initial public offering (IPO) on the stock market in June 1992,
Starbucks had grown to 140 outlets, with a revenue ofUS$73.5 million, up from US$1.3
million in 1987. The company's market value was US$271 million by this time. The 12%
portion of the company that was sold raised around US$25 million for the company,
which would facilitate a doubling of the number of stores over the next two years. By
September 1992, Starbucks' share price had risen by 70% to over 100 times the earnings
per shareof the previous year.
In July 2013, over 10% of instore purchases were made on customer's mobile devices
using the Starbucks app. The company once again utilized the mobile platform when it
launched the "Tweet-a-Coffee" promotion in October 2013. On this occasion, the
promotion also involved Twitter and customers were able to purchase a US$5 gift card
for a friend by entering both "@tweetacoffee" and the friend's handle in a tweet. Research
firm Keyhole monitored the progress of the campaign and a December 6, 2013 media

20

article reported that the firm had found that 27,000 people had participated and
US$180,000 of purchases were made to date.
Expansion to new markets and products
The first Starbucks location outside North America opened in Tokyo, Japan, in
1996.] Starbucks entered the U.K. market in 1998 with the $83 million USD acquisition
of the then 56-outlet, UK-based Seattle Coffee Company, re-branding all the stores as
Starbucks. In September 2002, Starbucks opened its first store in Latin America,
at Mexico City. Currently there are over 250 locations in Mexico, about 100 of them are
located in Mexico City alone.
In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a
restaurant chain called Circadia. These restaurants were soon "outed" as Starbucks
establishments and converted to Starbucks cafes.
In

October

2002,

Starbucks

established

coffee

trading

company

in Lausanne, Switzerland to handle purchases of green coffee. All other coffee-related

business continued to be managed from Seattle.
In

April

2003,

Starbucks

completed

the

purchase

of Seattle's

Best

Coffee and Torrefazione Italiafrom AFC Enterprises for $72m. The deal only gained 150
stores for Starbucks, but according to the Seattle Post-Intelligencer the wholesale
business was more significant.] In September 2006, rival Diedrich Coffee announced that
it would sell most of its company-owned retail stores to Starbucks. This sale included the
company-owned locations of the Oregon-based Coffee Peoplechain. Starbucks converted
the Diedrich Coffee and Coffee People locations to Starbucks, although the Portland
airport Coffee People locations were excluded from the sale.
In August 2003, Starbucks opened its first store in South America in Lima, Peru.
In 2007, the company opened its first store in Russia, ten years after first registering a
trademark there.
In March 2008 they purchased the manufacturer of the Clover Brewing System. They
began testing the "fresh-pressed" coffee system at several Starbucks locations in Seattle,
California, New York and Boston.
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In early 2008, Starbucks started a community website, My Starbucks Idea, designed to

collect suggestions and feedback from customers. Other users comment and vote on
suggestions. Journalist Jack Schofield noted that "My Starbucks seems to be all
sweetness and light at the moment, which I don't think is possible without quite a lot of
censorship". The website is powered by the Salesforce software.
In May 2008, a loyalty program was introduced for registered users of the Starbucks Card
(previously simply a gift card) offering perks such as free Wi-Fi Internet access, no
charge for soy milk & flavored syrups, and free refills on brewed drip coffee or tea. In
2009, Starbucks began beta testing its mobile app for the Starbucks card, a stored value
system in which consumers access pre-paid funds to purchase products at Starbucks.
Starbucks released its complete mobile platform on January 11, 2011.
On November 14, 2012, Starbucks announced the purchase of Teavana for US$620
million in cash and the deal was formally closed on December 31, 2012.
On February 1, 2013, Starbucks opened its first store in Ho Chi Minh City, Vietnam, and
this was followed by an announcement in late August 2013 that the retailer will be
opening its inaugural store in Colombia. The Colombian announcement was delivered at
a press conference in Bogota, where the company's CEO explained, "Starbucks has
always admired and respected Colombia's distinguished coffee tradition."
In August 2014, Starbucks opened their first store in Williamsburg, Brooklyn. This
location will be one of 30 Starbucks stores that will serve beer and wine.
In September 2014, it was revealed that Starbucks would acquire the remaining 60.5
percent stake in Starbuck Coffee Japan that it does not already own, at a price of $913.5
million.

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CHAPTER 5:
Advertising of Star Bucks
Advertising is the maximum medium used by Pizza Hut for its promotion
Advertising is non personal communication transmitted through mass media as radio,
television, print, internet and outdoor media.
The main objective behind every campaign is either to increase sales by encouraging
potential purchasers or inducing repeat purchases or prompting immediate purchase by
offering special schemes or to create awareness about a new product offering by

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highlighting a new flavor or announcing price changes or demonstrating the product in

use by depicting an experience.
in the Starbucks Experience post, there are not a whole lot of commercials for Starbucks,
and those that are available arent geared towards drinks that are available to customers
when they go to an actual Starbucks location versus a grocery store. Starbucks is a word
of mouth advertiser as well as the walking billboards they have, also known as their
coffee cups.
Starbucks appeals to several different demographics and in turn use several different
persuasive strategies. They can use the plain folks pitch if for instance a college student
has rolled out of bed after a long drinking weekend, and are just getting their morning
coffee in their sweatshirt, sweatpants, and Ugg boots. On the other side of the spectrum,
Starbucks uses the business demographic to put out the snob appeal.
Many times when there are commercials, they are shown on the companys website. If
the customers go and look at the website on a regular basis then I think those
advertisements can be very effective, but if they arent being seen, how can they be
effective?
Because Starbucks doesn't do a whole lot of billboard advertising or commercials, a lot of
their products are purchased because of the word of mouth. The company does not do a
whole lot of public advertising. When you walk into the Starbucks, you notice they are
promoting specialty drinks or products within the store, but the way most people hear
about these products is from friends, family, or just from seeing the product while being
out and about. The signs or samples that are promoting new drinks or specials help a lot.
So many times, there are people who are stuck on their morning muffin and house coffee
that they dont realize there is a new promotion happening. When there are signs, usually
with a picture, customers are more likely to try it.
Another way Starbucks advertises is through Twitter and Facebook, but this is mostly a
way for social networking, and a way for the company to receive feedback from their
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customers including positive and critical feedback. Starbucks also has a website where all
their products are available for sale, and for customers to discover what drinks fit best
with their taste buds.
Many other coffee places do advertising similarly to Starbucks. Dutch Bros, for example,
has not done many commercials beyond promoting a grand opening for a new location.
One thing that Dutch Bros does different is the fact they have several decals for cars,
allowing people to get the Dutch Bros' logo in their head.

Chapter 6
Conclusion
Thus it can be concluded that advertisement though have some social, legal, ethical issues
plays a very important role in today world. Business without using the medium can
barely survive in the competitive business market. Star Bucks has many targets that it has
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to achieve in a given period of time .As advertising is the main medium used for
promotion different advertising strategies are adopted in order to attract customers and
earn profits. But these strategies are flexible and can be change as per the market
conditions whenever needed.

BIBLIOGRAPHY
Books on advertisement
Websites as on September 2014
http://starbuckssuccess.blogspot.in/2010/11/advertising-techniques.html
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http://en.wikipedia.org/wiki/Starbucks#Advertising
http://starbuckssuccess.blogspot.in/2010/11/advertising-techniques.html

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