Marketing Management (LB5202) – TASK 1 – SP22 - 2019

An essay examining the implications of the Marketing Mix

element of Promotion in relation to Starbucks Coffee

Student Name: Tan My Ha CO

Number: 13846208
Submitted to: Dr David Gration
Date Submitted: 15-08-19
Word Count:1809

Introduction

This report aims to review the marketing mix theory topic of Promotion and how it relates

to Starbucks Coffee Company. For the purpose of this essay Promotion is defined as the

marketing communication package used to make the offer known to potential customers,

and persuade them to investigate it further. This is such a large part of marketing that it is

often mistaken (by non-marketers) for the whole of marketing. Promotion itself is broken

down into a promotional mix, originally comprising four elements (advertising, public

relations, sales promotion and personal selling) but in recent years these four elements

have become several dozen at least (Blythe, 2009). This essay relies on the use of secondary

information from a variety of academic and non-academic sources.

Literature review on promotion

Marketing mix is the most fundamental concept of marketing and well knows as one of the

crucial elements in the success of an organisation. According to Goi (2009) that McCarthy

(1964) refined Borden's idea of marketing mix and Rafiq & Ahmed (1995) argued

referring some studies that while McCarthy's 4Ps framework is popular, there is by no

means a consensus of opinion as to what elements constitute the marketing mix.

Meanwhile, the 4Ps framework has been subjected to much criticism because the 4Ps

framework is too simplistic and misleading so the 4Ps framework is found wanting for

instance, the addition of packaging as the fifth P in the marketing mix, the inclusion of

public relations as the fifth P, the addition of Power as well as public relations in the

context of "mega-marketing", the addition of people as a method of differentiation in

industrial marketing and the addition of people, processes, and customer service for

relationship marketing. (Khan, 2014)

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More than just selling and advertising, which people usually think of, marketing of today

must be understood in the new sense of satisfying customer needs (Kotler and Armstrong,

2014). The last tool of 4Ps marketing mix is promotion, similar with other tools of

marketing mix, the information and activities in the companies’ promotion also affect the

buying decision of customers. And the successful promotion plan will give popular

attention to customers and lead people spending more, even increase loyalty of existing

customers. According to McCarthy promotion is concerned with any method that

communicates to the target market about the right product to be sold in the right place at

the right price. Promotion encompasses sales promotion, advertising, and personal selling.

Hence, promotion is persuasive communication to inform potential customers about

existence of products, to persuade and convince them that those products have emerged

with want satisfying capabilities.

Figure 1. The Four Ps of the Marketing Mix (Kotler and Arsmtrong, 2014, p.76)

From the definition above, it can be seen that the main objectives of the promotion mix are

making customers aware the existence of the products and purchase them to buy those

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 products rather than ones from competitors. In another word, promotion is considered the

communication apart of the marketing mix. Therefore promotion is an important ingredient

of marketing mix as it refers to a process of informing, persuading and influencing a

consumer to make choice of the product to be bought. Promotion is done through methods

of personal selling, advertising, public relations and sales promotion. It is done mainly

with a view to provide information to prospective consumers about the availability,

characteristics and uses of a product. It arouses potential consumer’s interest in the

product, compare it with competitors’ product and make their choice. The proliferation of

print and electronic media has immensely helped the process of promotion.

Case Study Discussion on how promotion impacts on Starbucks Coffee Company.

Marketing Mix strategy can be considered the oldest and most classic marketing strategy

of all time. However, using this strategic success is a completely different story. Starbucks'

marketing mix strategy has shown that, what this brand has used so skillfully and

successfully has brought Starbuck into a love-mark in many parts of the world. Let's see

how 4Ps have been used effectively by Starbucks, especially focused on promotion

element.

Starbucks first opened in Seattle in 1971 (Starbucks, 2014) and has developed from one

store to 24,000 retail stores today. This company has become world popular and brings

high quality coffee and beverages to its clients over the world daily. Their famous slogan

and mission statement is: to inspire and nurture the human spirit – one person, one cup and

one neighborhood at a time.

Starbucks is a great example of a company that has built their promotion around their

customers and ethical behaviour instead of investing big budget on advertising that does

not bring any social benefit. The advantage of this organisation is the market they are

working in; there is always a demand for coffee, and people regularly visit coffee shop

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before go to work or to spend time with their close ones. The challenge is to retain these

customers and give them happy feeling when they want come back.

This has been reported that segment of the marketing mix refers to the communication

strategies used to disseminate information about the firm and its products, and to

encourage customers spend money and time to buy these products. Hence, Starbucks’

promotional element is as follows: Word-of mouth marketing, Advertising, Sales

promotions, Public relations. (Roberta, 2019)

Furthermore, word-of-mouth in marketing mix is usually focuses on providing the best

customer experience in order to encourage people to spread positive feed back and good

recommend about the business. The company likewise advertises its products through

television, print media, and the Internet. Sales promotions are used in Starbucks Rewards

card, which is a program involving freebies that customers can avail after purchasing a

certain amount of the company’s products. The corporation usually uses public relations,

which has not always been successful or effective for the business. For instance, the Race

Together public relations campaign was widely criticized. In any case, the Starbucks

Foundation continues its efforts to solve different challenges in society. The Foundation

helps communities, while promoting the company’s brands.

Specifically, Starbucks started a community website, designed to collect suggestions and

feedback from customers, and the reward program allows members to earn a free drink

after every 12 purchases at participating Starbucks stores. Starbucks has implemented

numerous promotions to reach its targeted market. One of the clever thinking of

promotions that Starbucks has used is the Starbucks Reward Card and Starbucks Gift Card.

Starbucks Reward Card is a technique that gives customers the opportunity to promote

Starbucks’s products through a referral system. When a customer purchases a gift card, it

not only shows brand loyalty, but it also provides the company with free advertising, and

brings in new customers.

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 To sum up, Starbucks is a classic example of the power of mix marketing, especially

successful with promotion element of 4Ps. the promotion of the marketing mix is a tool

that helps disseminate information, encourage the purchase and has an impact on the

decision to buy. Supporter complex includes 5 elements, namely: advertising, sales

promotion, personal selling, public relations and direct marketing.

Conclusion

Given the above research findings on promotion it can be seen that promotion is concerned

with any method that communicates to the target market about the right product to be sold

in the right place at the right price. Promotion encompasses sales promotion, advertising,

and personal selling (McCarthy, 1997).

When comparing the findings from the literature review on marketing mix are the

controllable variables that an organization can co-ordinate to satisfy its target market.

(McCarthy, Perreault, 1979) with the real-world case study of Starbucks Coffee Company

it can be seen that the marketing mix or 4P functions as a marketing tool for establishing a

unified and systematic approach to bring Starbucks Corporation’s products to food and

beverage markets around the world. Starbucks utilizes its marketing mix as a tool of

developing and building its brand image and popularity. With the strongest brand in the

industry, the company shows how an effective marketing mix supports brand development

and multinational business growth. Starbucks has applied and actualized numerous

promotions to reach its targeted market.

The marketing mix is a long-term plan of certain actions and decisions aimed at the

company's goals and meeting the customer needs. Nowadays, the company operates in a

constantly changing environment. In order to successfully set up and remain profitable it is

necessary to provide services that can meet the needs and demands in the target market.

Thus, the marketing experts who are constantly monitoring the environment and its

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changes can properly respond and adapt to them. The competitive advantage is sustainable

when competitors cannot imitate their source of competitiveness or when no other firm

conceives a better offering (Baron, 2010). As was argued above, there is a lot of evidence

that the empirical issues of marketing are far from being so simple and straightforward as

assumed in the model world. Moreover, promotion concerns the best way to communicate

or publicize the product. Several variants on the 4Ps have been proposed, notably the 7Ps

of services (i.e. to the standard 4Ps are added ‘people’ (staff, personnel, employees),

‘physical evidence’, and ‘processes’ (Graham, 2003). Obviously, It is suggested that

Promotion be redefined to include all of the information that is conveyed between the

parties to the transaction in keeping with the current thought on Integrated Marketing

Communications (Yudelson, 1999), because a successful product or service means nothing

unless the benefit of such a service can be communicated clearly to the target market.

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 References

Goi, C. L. (2009). A review of marketing mix: 4Ps or more?. International journal of

marketing studies, 1(1), 2.

Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson

Australia.

McCarthy, E. J., Shapiro, S. J., & Perreault, W. D. (1979). Basic marketing (pp. 29-33).

Irwin-Dorsey.

Khan, M. T. (2014). The concept of 'marketing mix' and its elements (A conceptual review

paper). International Journal of Information, Business and Management, 6(2), 95.

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Perspective, 3(2), 33-38.

Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015). Marketing. Pearson

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Starbucks. (2019). Startbucks company profile. Retrieved from

https://www.starbucks.com/about-us/company-information/starbucks-company-profile

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Roberta, G. (2019). Starbucks corporation’s Marketing Mix (4PS) Analysis. Retrieved
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Rea, P. J., & Kerzner, H. (1997). Strategic planning: a practical guide. John Wiley & Sons.

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