Channel Strategy Factors

Product Service Characteristics

• Starbucks' whole business is driven by their strong brand image
• They strive to have a knowledgeable staff and unique, recognizable packaging
• Starbucks also has the image of being known for $5 cups of coffee but you're also
getting some image for your $5, too
• Starbucks also uses an intensive distribution strategy to make their logo and coffee
ubiquitous around the world
Product Life Cycle
• Most items Starbucks sells are consumables, representing their core business (77%)
Coffees, teas, Frappacino's, etc.
• They also distribute at-home coffee in-store as well as through convenience and
grocery stores
• Starbucks strives to keep its coffee drinks fresh by changing menu
• Many drinks are cash cows, while others are seasonal with limited life
Product Differentiation
► Products: Coffee, beans, pastries, equipment, mugs, containers, accessories,
music CUS
► "Everything matters" store ambience
► Retention of coffee aroma
► City specific mugs and t-shirts
► Season special coffees, rare exotic coffees, handcrafted beverages etc
► Custom drinks and customer attention
New Products and Places
► Music CDs
► The Starbucks card
► The Duet to Visa card
► Wi-Fi internet
► Starbucks coffee in supermarkets in Flavor lock packaging)
► Airports, Universities, airlines, equipment in hotel rooms, business offices
► Mail order sales
► Amazon.com and other websites
Customer Willingness to Pay
► Starbucks charged coffee at slightly higher rates
► Location
► Ambience (Everything matters), seating, comfort and convenience
► COFFEE centered theme
► Wi-Fi ... more value, more time, more business
Causes of the Problem
► High Prices - Low Quality
Starbucks has always tried to maintain it's price-point, with only a minimal
improvement in product quality.
► Negative Image
Starbucks has a large number of negatives in my mind these days. We also find
out the customer of Starbucks has dissatisfaction on the size of cup what they
are serving for their beverage.
► Poor Quality Control
Starbucks core coffee quality has also suffered in a number of obvious ways.