Where Is My Stuff Made

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Where is my stuff made?
The product for this research will be Starbucks coffee. Starbucks sells packaged coffee to consumers. To make their coffee, Starbucks obtain their raw materials from different regions. The main raw material in making Starbucks coffee is the Arabica coffee. Starbucks obtains the Arabica coffee from three major regions that grow coffee (Pashman, n. pag.). These regions include the Asia-Pacific, Africa, and Latin America. However, their signature coffee blends are mainly sourced from the Asia-Pacific region (Pashman, n. pag.). Starbucks also owns a 240-hectare farm where they grow their own coffee. This is located on the slopes of Poas Volcano in Costa Rica. Another source of raw material for the Starbucks coffee in China. Yearly, Starbucks imports about 14,000 bags of coffee from China. Starbucks sources its coffee beans from various regions so that they improve on their blends.
It is crucial for organizations such as Starbucks to verify the country of origin of their raw materials. This is to ensure that the raw materials meet the specifications of the organizations and also national regulatory requirements for imported products. Regulatory requirements ensure that the raw materials are safe and legal for their intended purpose. Organizational specifications ensure that the raw materials increase the quality and functionality of the organization’s product and process (Quality Assurance & Food Safety, n.

pag.).
Organizations employ four main techniques in verifying the country of origin of raw material. First is Substantial Transformation. “The traditional substantial transformation rule states that a good originates in the last country where it emerged from a given process with a ‘distinctive name, character or use’’ (Donaldson Company, pp.1). This means that the origin of a product is the country in which the product last underwent a transformation. The second technique is the Value-Added Percentage Test. This technique refers to the “degree of transformation required to confer origin on the good in terms of a minimum percentage of value that must come from the originating country or a maximum amount of value that can come from the use of imported parts and materials” (Donaldson Company, pp.2). In cases where the percentage is below the required range then, the origin of the product is not credited to the last production process. The third technique used by organizations is the Specified Process, also known as technical tests. This technique “prescribes certain production or sourcing processes that may (positive tests) or may not (negative test) confer originating status” (Donaldson Company, pp.2). The final technique is the Change in Tariff Classification. In this technique, the Harmonized System of Tariff Nomenclature is used to verify the originality of raw materials (Donaldson Company, pp.2).
The choice of the location of raw materials for an organization definitely has an impact on their marketing strategy for their products. The prices of raw materials are highly volatile. It is especially volatile in certain regions compared to others. Depending on these global marketing regions, where organizations purchase their raw materials, the marketing efforts of organizations for the same product are varied in different countries. The organization has to ensure the volatile costs of purchasing raw materials are recovered. This is only possible by making the right decisions on marketing strategies for different countries. For example, in the United Kingdom, an organization may focus its marketing efforts on retaining its marketing share by staying loyal to its current customers. For established markets, the aim would be to retain the current customers and obtain the expected revenue. For Peru, since the market is not that established, the organization may focus their marketing efforts on gaining new customers. Though the revenue obtained will not be huge, it would be helpful in offsetting the volatile costs incurred in acquiring raw materials.
Works cited
Donaldson Company. “How To Determine Country Of Origin”. Donaldson Company, Accessed 19 Aug 2018.
Pashman, Heidi. “Why Do You Like The Coffee You Like?”. Shape Magazine, https://www.shape.com/blogs/fit-foodies/do-you-know-where-your-coffee-beans-come Accessed 19 Aug 2018.
Quality Assurance & Food Safety. “Raw Materials: Selection, Specifications, And Certificate Of Analysis – Quality Assurance & Food Safety”. Quality Assurance & Food Safety, 2013, http://www.qualityassurancemag.com/article/aib0613-raw-materials-requirements/. Accessed 19 Aug 2018.