H.

K INSTITUTE OF MANAGEMENT STUDIES & RESEARCH

NAME: SANA AFZAL SHAIKH

STD: MMS

ROLLNO: 38

DIV: A

SUBJECT: MARKETING ASSIGNMENT REPORT ON STARBUCKS

SUBMITTED TO: PROF. NEHA SHARMA

SIGNATURE:
TABLE OF CONTENT

EXECUTIVE SUMMARY

COMPANY PROFILE

MARKET SEGMENTATION & TARGETING

SITUATION & COMPANY ANALYSIS

CUSTOMER DECISION MAKING PROFILE

POSITIONING & DIFFERENTIATION

MARKETING MIX (4Ps)

DISTRIBUTION STRATEGY

CONCLUSION
 STARBUCKS
Starbucks is the premier roaster, marketer and retailer of specialty coffee in the
world which based in Seattle, Washington, USA which now operating in 72
countries with approximate 24,000 stores worldwide. (Starbucks, 2016)

On31 March 1971, the first Starbucks opened in Seattle, by three partners; Jerry
Baldwinan English teacher, Zev Siegla history teacher, and a writer named Gordon
Bowker who all had a passion for fresh coffee. Their mission was to sell high
quality coffee beans to the public and they began selling fresh-roasted whole beans
in a specialty store (Starbuck, n.d.). In1982, Howard Schultz joins Starbucks as
director of retail operations and marketing. Starbucks begins providing coffee to
fine restaurants and espresso bars. Schultz brings up the idea of coffeehouse
culture to Seattle after he travels to Italy in 1983 (Starbuck, n.d.). By1986 the
company operated six stores in Seattle and had only just begun to sell espresso
coffee, and the next following years the original owners sold the Starbucks chain to
Howard Schultz, who rebranded his Il Giornale coffee outlets as Starbucks
Corporation and quickly began to expand its store in Chicago and Vancouver,
Canada.(Starbuck, 2016)

By 1995, Starbucks had 667 stores opened and continuing to expand its store by
choosing Tokyo, Japan as the first location outside North America in 1996
followed by Singapore and the Philippines. Starbucks operates in two types of
stores :company-operated and licensed. In the early 2000s, Starbucks expanded
into other important key markets, covering most Asian countries and also moving
into the European, Australian, and Latin-American market. Today, Starbucks is the
leading roaster and retailer of specialty coffee in North America with more than
24,000 retail stores in 72 international markets. Starbucks also ensuring the
extraordinary potential of coffee is discovered, revealed and delivered- helping to
bring great pleasure to millions of people each day.

Company Profile:

Company Name Starbucks Corporation

Company Logo

Industry Coffeehouses (Restaurants)

Headquarters Seattle, Washington, United States of America

Year founded 30 March, 1971

No. of Employees Starbucks total number of employees is 383,000

Annual Revenue 2,906 crores USD (2021)

Major products Coffee | Handcrafted Beverages | Fresh food | Non-food items |

Packaged goods | Mugs and accessories | Gifts |

Target Customers The target audience of Starbucks is middle to upper-class men

and women. It’s the percentage of the general public who can
 afford their higher priced cups of coffee on a regular or daily
basis.

Distribution Starbucks level of distribution is intensive via retail stores.

Channel Starbucks has direct retail system through operation of its own
retail outlets.

Key Competitors Mc Donalds, Café Coffee Day, Dunkin, Tim Hortons, Costa
Coffee

Link to Website www.starbucks.com

PRODUCTS: (1. Drinks)

Hot Coffee Hot Tea Hot Drinks

 Frappuccino Cold Coffee Iced Tea

Cold Drinks

(2. Food)

Hot Breakfast Bakery Lunch

Snacks & Sweets Oatmeal & Yogurt

(3. At Home Coffee)

Whole Bean Via Instant

(4. Merchandise)
 Mug Tumbler Cold Cup

(5. Gift Cards)

Happy Bday Thank You Traditional

TARGET SEGMENT:

1.Market Segmentation of Starbucks:

According to Kotler and Armstrong (2006), market segmentation means the
process of classifying a market into different groups of buyers based on their
needs, characteristics, or behaviors that might need marketing initiatives or
separate products. Also, companies offering various brands utilize
psychotropic variables like lifestyle to categorize a market into several
segments.

The early years of Starbucks focused on the well-off market, which was
mainly composed of educated customers and those with white-collar jobs.
However, they discovered opportunities for growth in the industry, setting
strategies to accommodate a broader scope of a market segment.
Starbucks classifies its market based on demographic, geographic,
behavioral, and psychographic. They then use a product differentiation
approach to satisfy varying customer groups. As with the geographic
segmentation, the company has retail outlets in several locations where each
outlet reflects the preferences and tastes of the local market. The outlets
might have similar designs but vary in product categories such as baked food
and coffee.

Demographics will include the company's target market's age, occupation,

and income level. Meanwhile, the psychotropic variables include customer
tastes and styles to provide authentic products for diverse customer needs.
The behavioral elements in Starbucks' market segmentation can tackle
consumer loyalty and consumption behavior.

2.TARGETING OF STARBUCKS
Targeting is about evaluating all the interests of market segments and
choosing one or more segments to enter and focus on (Kotler 2016). A
company usually focuses on elements with a higher probability of profit
generation and can sustain it over time. To simply put it, targeting refers to
the segments or groups a company decides to sell its products to.

Starbucks' target markets focus on middle to high-income office employees

looking for premium quality products. Since Starbucks has chains
internationally, the company makes local delights showing cultural
characteristics among customers. Besides locals trying out local treats
 offered by Starbucks, tourists traveling to countries and visiting a Starbucks
chain can try the country's local food through the products that they have.

As people continue to seek cleaner and sustainable food, Starbucks also aims
to provide tables of drink and food nutrition such as fat, calories, fiber,
sodium, and protein on its website. Customers who are conscious about
calorie intake can refer to this information.

TABLE:

Here's what Starbucks' market segmentation, targeting, and positioning look

like in a chart.

Segmentation Targeting Positioning

Age:

22-60 years old ●Excellent store

Gender:
ambiance
Male and Female

Occupation:
Demographic
Professionals, employees, and ● Social commitment
students

Life-cycle stage:
● Environment protection
Single people, young married
couples, older married couples
with children, youngest child
 under and over six

Region:

Latin America, US, Canada,

Geographic Middle East, Europe, China,
Africa, Asia, and the Pacific
Region

Density:

Urban

Social Class:

Middle and upper-class

Psychographic markets

Lifestyle:

reformer, aspirer, explorer,

achiever, mainstreamer
 Benefits sought:

A place conducive for work,

Behavioral formal and informal meetings.

Enjoying a premium quality

coffee with a relaxing
ambiance.

Degree of loyalty:

Hard core' loyalty

MARKETING ENVIRONMENT:

The Marketing Environment for Starbucks can be analysed considering different

factors such as :

Social Factors

Demographic Factors

Economic Factors

Technological Factors

Political & Legal Factors

Social Factors: The individuals of starbucks, workers feel they have the
responsibility to provide back to the community which is already giving them a lot.
They recognize that they’re within the agricultural based business and thus they
need special programs for the farming communities. they need LEED certified
stores. They recycle the fabric they use. they have the priority for water & energy
conservation. Because of this social factor , individuals can fancy about being
connected with Starbucks.

Demographic Factors:

Starbucks is one brand which is omnipresent. It is present in almost all developed

and developing nations across the globe. Due to it’s presence everywhere, it
connects with everyone so easily. It has a very good relationship with all it’s
localities also starbucks is known for having a local website for every area.

Economic Factors:

As starbucks is present everywhere. Hence, it does consider the economic factor

for every nation. It has designed its structure in such a way that it keeps in mind
the economical conditions of various nations while deciding the prices. For an
instance, It is very well aware that the capital income of an American household is
approx $41663 and therefore it knows that anyone from America can pay easily for
a quality coffee which makes a premier coffee chain.

Technological Factors:

The world today is moving towards technological advancements at a very high

pace. There are innovations taking place every hour, minute and second.
Technology plays an important role for a brand like Starbucks. Since it’s inception
It has many technological innovations such as:

Earlier it never had the system to order coffee online, but recently in many nations
they have opened online service, which has helped to increase it’s sale with a large
margin as it is very convenient for customers to order coffee online.
Order anytime and pick the coffee at your convenience: Users can order at
anytime of the hour and can also pick up at their own convenience which makes
the services very customer friendly.

Order on Smart phone using App, the customers can now use their smart phone to
place an order. This allows them to order at anytime and anywhere and they do not
have to physically be present or visit the place to order.

Political & legal Factors:

Since star bucks is present at various countries, it is important to have the elements
of the nation in each store. It tries and source the coffee, tea and other substances
locally to keep a connect with the individuals of the nation and bring a personal
touch.

SITUATION & COMPANY ANALYSIS:

Political Environment:

The key political imperative that Starbucks faces is the concerns over sourcing of
its raw materials that has attracted the attention of the politicians in the West and in
the countries from where it sources its raw materials. This is the reason why
Starbucks is keen on adhering to social and environmental norms and to follow
sourcing strategies that are appropriate and in conformance to the ―Fair Trade‖
practices that have been agreed upon by global corporations and the governments
of the developing and the developed countries.

The other political imperative that Starbucks faces is the need to adhere to the laws
and regulations in the countries from where it sources its raw materials. This has
been necessitated because of activism and increased political awareness in the
developing countries, which form the basis for Starbucks’ sourcing strategies.

The third political imperative, which Starbucks faces, is the regulatory pressures
within its home market in the United States because of greater scrutiny of the
business processes that multinationals based in the US are now subject to.

Economic Environment:

The foremost external economic driver for Starbucks is the ongoing global
economic recession, which as explained in the introduction has dented the
profitability of many companies.

However, studies have shown that consumers instead of cutting down on their
coffee consumption are shifting to lower priced alternatives which is an
opportunity for Starbucks.

Of course, the company still has to contend with rising operational and labor costs
as the inflationary macroeconomic environment coupled with the falling
profitability is squeezing the company from both ends of the spectrum.

Socio-Cultural Environment:

Though Starbucks can offer cheaper alternatives as mentioned previously, it has to

do so without sacrificing the quality and this is the key socio cultural challenge that
the company faces as it expands its consumer base to include the consumers from
the lower and the middle tiers of the income pyramid.

Apart from this, the ―green‖ and the ―ethical chic‖ consumers who fret about the
social and environmental costs of the brands they consumer means that Starbucks
has to be cognizant of this trend.
Third, the retiring baby boomer generation means that spending by the older
consumers is likely to taper off and hence, Starbucks would have to lookout for
tapping the Gen X and the Millennials as part of its strategy.

Technological Environment:

Starbucks is well poised to reap the benefits of the emerging mobile wave and as it
has tied up with Apple to introduce app based discount coupons, it can expect to
ride the mobile wave with ease.

The company has already introduced Wi-Fi capabilities in its outlets so that
consumers can surf the web and do their work while sipping coffee. This is indeed
an added value to the Starbucks brand and something, which enhances the
consumer experience.

It can also introduce mobile payments and this is something that it is already
testing out in pilot locations in the United States.

Legal Environment:

Starbucks has to ensure that it does not run afoul of the laws and regulations in the
countries from which it sources its raw materials as well as the home markets in
the United States.

Environmental factors:

There have been several concerns about the business practices of Starbucks from
the activists, international advocacy groups, and from the consumers themselves.
Therefore, Starbucks has to take into account these concerns if it has to continue
holding on to the trust it enjoys with its consumers.

SWOT ANALYSIS OF STARBUCKS:

Strengths Weakness

1. Operating efficiency and solid 1. Overdependence on revenue from the

growth leading to superior financial U.S.
performance
2. Slow growth in Europe indicates poor
2. Fast growing store network in positioning and wrong competitive
China strategy for those markets

3. The combination of a premium 3. High prices when compared to other

menu, huge range of coffee, and major coffee-serving chains
quality customer service provides the
4. Overdependence on coffee sales with
best customer experience in the
little ability to influence the volatile
industry
price of coffee beans
4. Brand awareness and excellent
reputation leading to very high
customer loyalty

5. Direct ownership of 51% of all

Starbucks stores

6. Effective use of the Starbucks

Card, store loyalty program and
mobile ordering apps to encourage
repeat purchases

Opportunities Threats

1. Expansion of ready-to-drink (RTD) 1. The price of coffee beans could

coffee products in the U.S. market significantly rise due to major weather
 2. U.S. spending on food away-from- disasters
home is increasing vs. at-home
2. Social trend towards eating healthier
spending
food
3. Developing Starbucks’ Rewards
3. Slowing China’s growth and
Program into a reward of choice in
intensifying competition could affect
the growing electronic payment world
the chain’s expansion in these country
4. Growing demand for specialty
4. Changes in executive officers’
coffee, such as cold brew and nitro
positions could weaken the company’s
coffee
management

MISSON, OBJECTIVES & GOALS:

Our mission:

“to inspire and nurture the human spirit – one person, one cup and one

neighborhood at a time.”

Objectives & Goals:

In January 2020, Starbucks announced its sustainability goals to be met by 2030.

Here are its four main sustainability goals:

Halve carbon emissions and waste. One of Starbucks’ sustainability goals is to

halve its carbon emissions and waste by 2030. This is ambitious based on the fact
that Starbucks emitted 16 million tons of greenhouse gases in 2018, which is
nearly on par with giants like Microsoft. Starbucks also created 868 kilotons of
waste in 2018. Slashing both its green gas emissions and waste by 50% within 10
years is an uphill task.

Get greener. The company unveiled its long-term strategy to get greener, which
includes putting more plant-based products on its menu and switching to reusable
packaging. The specifics and deadline for these initiatives will be provided in
2021.

Eco-friendly operations and initiatives. The company identified several key areas
that can make big impacts by 2030, including water conservation practices.
Starbucks will also increase its investment in innovative agricultural and
reforestation practices.

Build on Yesterday’s Groundwork. Starbucks has invested in several sustainable

practices over the years. Its sustainability goals from 2010 to 2020 invested in the
Starbucks FoodShare program and C.A.F.E. (Coffee and Farmer Equity) Practices.
Now, it seeks to build on these investments and scale up existing programs, green
initiatives, and partnerships to meet the challenges of the future.

CUSTOMER DECISION MAKING PROFILE:

when a customer visits a new Starbucks location, the store identifies the customer
through their phone and gives the Starbucks person making their coffee in the
preferred or most repeated order of that customer.

1. Psychological Factors

Human psychology is a major determinant of consumer behavior. These factors are

difficult to measure but are powerful enough to influence a buying decision.

Some of the important psychological factors are:

 i. Motivation

When a person is motivated enough, it influences the buying behavior of the

person. A person has many needs such as social needs, basic needs, security needs,
esteem needs, and self-actualization needs. Out of all these needs, the basic needs
and security needs take a position above all other needs. Hence basic needs and
security needs have the power to motivate a consumer to buy products and
services.

ii. Perception

Consumer perception is a major factor that influences consumer behavior.

Customer perception is a process where a customer collects information about a
product and interprets the information to make a meaningful image of a particular
product.

When a customer sees advertisements, promotions, customer reviews, social media

feedback, etc. relating to a product, they develop an impression about the
productHence consumer perception becomes a great influence on the buying
decision of consumers.

iii. Learning

When a person buys a product, he/she gets to learn something more about the
product. Learning comes over a period of time through experience. A consumer’s
learning depends on skills and knowledge. While skill can be gained through
practice, knowledge can be acquired only through experience.

Learning can be either conditional or cognitive. In conditional learning the

consumer is exposed to a situation repeatedly, thereby making a consumer to
develop a response towards it.
Whereas in cognitive learning, the consumer will apply his knowledge and skills to
find satisfaction and a solution from the product that he buys.

iv. Attitudes and Beliefs

Consumers have certain attitudes and beliefs which influence the buying decisions
of a consumer. Based on this attitude, the consumer behaves in a particular way
towards a product. This attitude plays a significant role in defining the brand image
of a product. Hence, marketers try hard to understand the attitude of a consumer to
design their marketing campaigns.

2. Social Factors

Humans are social beings and they live around many people who influence their
buying behavior. Humans try to imitate other humans and also wish to be socially
accepted in the society. Hence their buying behavior is influenced by other people
around them. These factors are considered as social factors. Some of the social
factors are:

i. Family

Family plays a significant role in shaping the buying behavior of a person. A

person develops preferences from his childhood by watching family buy products
and continues to buy the same products even when they grow up.

ii. Reference Groups

A reference group is a group of people with whom a person associates himself.

Generally, all the people in the reference group have common buying behavior and
influence each other.
iii. Roles and status

A person is influenced by the role that he holds in the society. If a person is in a

high position, his buying behavior will be influenced largely by his status. A
person who is a Chief Executive Officer in a company will buy according to his
status while a staff or an employee of the same company will have different buying
pattern.

3. Cultural factors

A group of people is associated with a set of values and ideologies that belong to a
particular community. When a person comes from a particular community, his/her
behavior is highly influenced by the culture relating to that particular community.
Some of the cultural factors are:

i. Culture

Cultural Factors have a strong influence on consumer buying behavior. Cultural

Factors include the basic values, needs, wants, preferences, perceptions, and
behaviors that are observed and learned by a consumer from their near family
members and other important people around them.

ii. Subculture

Within a cultural group, there exists many subcultures. These subcultural groups
share the same set of beliefs and values. Subcultures can consist of people from
different religion, caste, geographies and nationalities. These subcultures by itself
form a customer segment.

iii. Social Class

Each and every society across the globe has the form of social class. The social
class is not just determined by the income, but also other factors such as the
occupation, family background, education and residence location. Social class is
important to predict the consumer behavior.

4. Personal Factors

Factors that are personal to the consumers influence their buying behavior. These
personal factors differ from person to person, thereby producing different
perceptions and consumer behavior.

Some of the personal factors are:

i. Age

Age is a major factor that influences buying behavior. The buying choices of youth
differ from that of middle-aged people. Elderly people have a totally different
buying behavior. Teenagers will be more interested in buying colorful clothes and
beauty products. Middle-aged are focused on house, property and vehicle for the
family.

ii. Income

Income has the ability to influence the buying behavior of a person. Higher income
gives higher purchasing power to consumers. When a consumer has higher
disposable income, it gives more opportunity for the consumer to spend on
luxurious products. Whereas low-income or middle-income group consumers
spend most of their income on basic needs such as groceries and clothes.
iii. Occupation

Occupation of a consumer influences the buying behavior. A person tends to buy

things that are appropriate to this/her profession. For example, a doctor would buy
clothes according to this profession while a professor will have different buying
patterns.

5. Economic Factors

The consumer buying habits and decisions greatly depend on the economic
situation of a country or a market. When a nation is prosperous, the economy is
strong, which leads to the greater money supply in the market and higher
purchasing power for consumers. When consumers experience a positive economic
environment, they are more confident to spend on buying products.

Whereas, a weak economy reflects a struggling market that is impacted by

unemployment and lower purchasing power.

Economic factors bear a significant influence on the buying decision of a

consumer. Some of the important economic factors are:

i. Personal Income

When a person has a higher disposable income, the purchasing power increases
simultaneously. Disposable income refers to the money that is left after spending
towards the basic needs of a person.

When there is an increase in disposable income, it leads to higher expenditure on

various items. But when the disposable income reduces, parallelly the spending on
multiple items also reduced.
ii. Family Income

Family income is the total income from all the members of a family. When more
people are earning in the family, there is more income available for shopping basic
needs and luxuries. Higher family income influences the people in the family to
buy more. When there is a surplus income available for the family, the tendency is
to buy more luxury items which otherwise a person might not have been able to
buy.

Reaching the customer:

The one that Starbucks uses to attract customers who gush about their business? It's
simple: they send birthday cards to their rewards members. All they do is email or
text their customers on their birthdays – and they include a free drink voucher that
the customer can redeem at any Starbucks location.

Positioning & Differentiation:

Positioning is considered the last stage among the three pillars of marketing
strategy. Positioning a product in the market entails a strategic approach that
involves marketing a brand to create and nurture an image in the customers' minds
within the target market.

In Starbucks' case, the company has created a unique market positioning so that
they effectively distinguish their products from the competing brands and provide
them with an excellent strategic edge in their target markets. The company's
positioning strategy is customer-based, giving more than what the customer needs.
Besides producing great coffee, it promotes a good reputation to its target market
through excellent store ambiance, environmental protection, and social
commitment. As a result, customers will feel that they also contribute to nature and
society by using the products Starbucks offers.

Every coffee chain has free Wi-Fi services and a comfortable place where
customers can rest or study. Some have 'drive-thru' for those opting not to enter the
store. The company also goes out of its way to promote social responsibility as it
focuses on the community. Starbucks provides opportunities to hire various people,
including military commitment by hiring military and veteran spouses, hiring
refugees, and giving career and education for the youth.

In terms of environment protection, Starbucks positions its brand by adapting the

LEED (Leadership in Energy and Environmental Design) approach to structure
buildings. Starbucks utilizes recycled coffee grounds on their tables and materials
low in harmful chemicals for adhesives, paints, coating, and sealants.

Product differentiation is the core of Starbucks' strategy to gain a sustained

competitive advantage. Starbucks offers such differentiation through an excellent
customer experience and quality coffee The ―Starbucks Experience‖ is achieved
through its well-designed stores with good ambiance and well-trained staff.

Competitive Advantage:

Excellent customer service is one source of Starbucks' competitive advantage.

Starbucks' emphasis on ensuring a positive customer experience has allowed it to
become one of the leading firms in the coffee industry.

Market Niche & Positioning Strategy:

Starbucks found a niche market where it identified what makes its customers
happy, and has delivered it to them. Continuing to accomplish this will allow
Starbucks to maintain its competitive advantage for years to come.
The company's positioning strategy is customer-based, giving more than what the
customer needs. Besides producing great coffee, it promotes a good reputation to
its target market through excellent store ambiance, environmental protection, and
social commitment.

Positioning Statement:

To cultured millennials, Starbucks is a premium coffee house that adds an intimate

and valuable experience to a customers lifestyle by integrating caffeine with a
comfortable environment.

BRANDING:

Brand Description:

Starbucks Corp (Starbucks) is a specialty coffee retailer. It roasts, markets, and

retails specialty coffee. The company, through its stores, offers several blends of
coffee, handcrafted beverages, merchandise, and food items.

Brand Promise:

Starbucks positions itself as a company that brings more to the world than a great
cup of coffee. It sees itself as a lifestyle brand and the promise it makes to
consumers backs that up: ―To inspire and nurture the human spirit—one person,
one cup, and one neighborhood at a time.‖

The promise that the entire brand stands behind to ensure each and every customer
is satisfied, every time.

Brand Voice & Personality:

Starbucks' brand voice is evocative, direct, and joyful

They lead with a thoughtful and helpful tone that instills positivity in their
customers' day-to-day lives. According to their brand voice guidelines, Starbucks'
brand voice features both expressive and functional tones, depending on the
medium.

Brand Positioning & Strategy:

Positioning is considered the last stage among the three pillars of marketing
strategy. Positioning a product in the market entails a strategic approach that
involves marketing a brand to create and nurture an image in the customers' minds
within the target market.

In Starbucks' case, the company has created a unique market positioning so that
they effectively distinguish their products from the competing brands and provide
them with an excellent strategic edge in their target markets. The company's
positioning strategy is customer-based, giving more than what the customer needs.
Besides producing great coffee, it promotes a good reputation to its target market
through excellent store ambiance, environmental protection, and social
commitment. As a result, customers will feel that they also contribute to nature and
society by using the products Starbucks offers.

Every coffee chain has free Wi-Fi services and a comfortable place where
customers can rest or study. Some have 'drive-thru' for those opting not to enter the
store. The company also goes out of its way to promote social responsibility as it
focuses on the community. Starbucks provides opportunities to hire various people,
including military commitment by hiring military and veteran spouses, hiring
refugees, and giving career and education for the youth.

In terms of environment protection, Starbucks positions its brand by adapting the

LEED (Leadership in Energy and Environmental Design) approach to structure
buildings. Starbucks utilizes recycled coffee grounds on their tables and materials
low in harmful chemicals for adhesives, paints, coating, and sealants.

Starbucks focuses on creating that personal connection between their customers,

their baristas and their organization

MARKETING MIX (4 Ps)

Product

Starbucks’ product provides high-quality coffee and ambiance to justify its pricing
to their target audience. As the customers pay for premium coffees, they need to
create the ―differentiation,‖ assuring that it tastes better than any other brands like
Macdonald’s, barista, etc. Essentially, Starbucks is taking a prestige approach to
their overall product marketing strategy offering the best in the industry products.

They promise to craft high-quality premium cups with perfection every time to
ensure that the customers never turn away or move to some other competitor.

This is a time-tested marketing strategy that will strengthen brand positioning and
affinity over the long-term.

Price

In 1990 Starbucks sold their coffees at a premium price which is 25% higher than
other brands, because of this only 4% of their expected sales were achieved in the
US. But by 2000, the sales increased exponentially by around 40%, and this was
majorly due to ―The Starbucks Effect,‖ as confirmed by the Harvard Business
Review. This essentially was a study tying the location of Starbucks stores to
higher home values. Prestige pricing not only helps them uphold their promise of
quality, but also caters directly to their ideal customer’s lifestyle choices.
By offering customers exceptional drinks, snacks and other beverages, Starbucks
has changed the entire game. How? Simply because people were willing to pay for
it.

Promotion

Starbucks uses diverse platforms and channels to market/promote its brand and
launch new products, including social media, TV spots, and ads. The mix of
marketing media makes their brand recognizable, and its consistency makes it
more recognizable compared to other coffee brands, which helps them stand out in
consumer’s minds.

Promotion isn’t cheap. However, compared to the other brands like Apple and
Nike, Starbucks spends significantly less on its marketing/promotions. But they
still create an impact.

Place

Read anything about Starbucks; they always boast about creating ―the third place‖.
The idea of creating that third place is to build a comfort zone between work and
home.

They never compromise on this, replicating the same environment and ambiance in
each store.

APPROACH:

Practices is a verification program that measures farms against economic, social

and environmental criteria, all designed to promote transparent, profitable and
sustainable coffee growing practices while also protecting the well-being of coffee
farmers and workers their families and their communities.
GOAL:

The company aims to meet this goal through the development of a culture that
embraces acceptance and is supportive of personal growth. As stated in the
company’s values, personal growth occurs through challenge and grows the
company as well. This goal of acceptance extends into the company’s diversity and
accessibility policies. Company leaders are developed to lead multicultural teams
of individuals with diverse perspectives and insights that ensure company growth
and improved service delivery for customers. The company seeks to grow
relationships with a diverse network of suppliers through strategic community
relationship-building.

Starbucks also strives to be open and genuine in its interactions with suppliers,
employees and customers. This is reflected in the company mission to drive
performance without sacrificing individual and corporate humanity. The company
practices this value through its community-building policies, which spur area
development through investment. Starbucks values delivering the very best service
and accepting responsibility when expectations are not met.

MESSAGE:

It was the idea of the third place that created the new mission statement for
Starbucks which is: ―To inspire and nurture the human spirit – one person, one cup
and one neighborhood at a time.‖ Starbucks focuses on creating that personal
connection between their customers, their baristas and their organizations.

PROMOTIONAL MIX & IMC TOOLS:

The promotional mix refers to the unique blend of advertising, sales promotion,
public relations, social media, and e-commerce used to promote a product. The
promotion strategy is a part of the marketing mix that refers to inform, persuade, or
remind target audiences about a company’s products.

Starbucks promotes its products by the following mediums:

Advertising

Offline

Online

Social media

Sales promotions

Word of mouth marketing.

Starbucks promotes its products via both offline and online mediums of
advertising.

It uses big banners for the promotion of its beverages and ongoing offers.

The Starbucks marketing team regularly runs different ad campaigns on online

advertising media platforms like Google ads and Facebook ads.

Starbucks is highly active on various social media platforms like Instagram,

Facebook, Twitter, Snapchat etc. The company promotes its products on each
platform with very deliberately designed images and videos that easily connect
with its audiences. It also provides many offers at its coffeehouses. They also issue
discount coupons in collaboration with payment apps. All of these are sales
promotion incentives.

Word of mouth marketing is the strategy in which your existing customers become
the biggest promoters of your brand. Starbucks’ brand image helps immensely in
this regard. By focusing on customer relationships and customer satisfaction, they
have been able to successfully bank on consumers’ recommendations. The chain of
recommendation from one customer to another is the strategy that boosts their
sales organically

CONCLUSION:

In conclusion, Starbucks is leading the market because of its dominating global

presence and leadership. A consumer’s experience at a Starbucks location is
arguably different from any other coffee shop because of its intimate atmosphere,
welcoming environment, and unmatched service. Their inviting ―ideal coffee shop
ambience‖ should prove to be a sustainable competitive advantage. Starbucks’
implemented strategy of retail locations and on-site partnerships have received
greater response rates, giving them the leading seat within the mature industry.
Starbucks, thus, has a strong market position through its all-inclusive marketing
strategy.