Starbucks - Brand Equity

Group 6
Deepak Prabhakar 2016PGP008
Akshay Meshram 2016PGP021
Preethi Ignatius 2016PGP025
Siddhant Thakre 2016PGP037
About Starbucks
• The Starbucks Story
• Our story began in 1971. Back then we were a roaster and retailer of whole bean and ground coffee, tea and
spices with a single store in Seattle’s Pike Place Market.
• Today, we are privileged to welcome millions of customers through our doors every day, in more than 17,000
locations in over 50 countries.
• Folklore
• Starbucks is named after the first mate in Herman Melville’s Moby Dick. Our logo is also inspired by the sea –
featuring a twin‐ tailed siren from Greek mythology.
• Starbucks Mission
• Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
• Our Coffee
• We’ve always believed in serving the best coffee possible. It's our goal for all of our coffee to be grown
under the highest standards of quality, using ethical sourcing practices. Our coffee buyers personally travel
to coffee farms in LatinAmerica, Africa andAsia to select the highest quality arabica beans. Once these
quality beans arrive at our roasting plants, Starbucks experts bring out the balance and rich flavor of the beans
through the signature Starbucks Roast™.
What they do..
• “It happens millions of times each week – a customer receives a drink from a
Starbucks barista – but each interaction is unique.”
• “It’s just a moment in time – just one hand reaching over the counter to present a cup
to another outstretched hand. But it’s a connection.”
• Starbucks are passionate purveyors of coffee and everything else that goes with a
rewarding coffeehouse experience
• Starbucks also offer a selection of premium Tazo® teas, fine pastries and other
delectable treats to please the taste buds
• And the music you hear in store is chosen for its artistry and appeal
• People come to Starbucks to chat, meet up or work
• Starbucks is a neighborhood gathering place, a part of the daily routine – and
Starbucks couldn’t be happier about it
Aaker Model
Brand Loyalty
• The extent to which people are loyal to a brand is expressed in the following factors
• Reduced Marketing Costs - +ve (hanging on to loyal customers instead of charming potential customers)
• Starbucks has credited its loyalty program with driving customers to its mobile payments system.
• Starbucks has also seen great success with mobile payments, at a time when many mobile payment apps are struggling to gain
traction.
• Mobile Order and Pay is fueling both revenue and profit in the markets it’s in, “with customer adoption starting faster and
accelerating with each new phase we roll out.”
• Trade Leverage- +ve (loyal customers represent a stable source of revenue for the distributive trade)
• Starbucks’ loyalty program is delivering big results for the coffee company.
• The coffee chain announced that customers will earn reward "stars" based on the amount of money they spend at Starbucks
• Basically, the new program benefits customers who spend more at Starbucks, whether that be by purchasing elaborate lattes or
ordering food
• Attracting New Customers +ve (current customers can help boost name awareness and hence bring in new
customers)
• What makes this Starbucks strategy all the more amazing is the fact that the company spends less than 1% of its annual revenues
on advertising, versus the typical 10% of most other retailers.
• Instead, the Starbucks strategy relies on word of mouth advertising. They believe that by creating an intimate and welcoming
environment in their stores, as well as providing a great cup of coffee, patrons will not only keep coming back for more, but will tell
all their friends and family about it too.
Brand Loyalty
Time to respond to competitive threats +ve ( loyal customers that are not
quick to switch brands give a company more time to respond)
• The Starbucks strategy has always involved thinking outside the box.
• In addition to clustering its outlets, the Starbucks strategy involves engaging
in smart joint ventures with the right companies, such as their successful
alliance with Pepsi-Cola Co., and rolling out fresh, new initiatives, including a
new product line of hot sandwiches and breakfast food and new drinks such
as coffee liqueurs.
• The Starbucks strategy is now also expanding online, allowing customers to
pre-order and prepay for products via the Internet.
• Starbucks continues to keep its customers happy and rely on non-traditional
means of attracting new customers: that is the Starbucks strategy.
Brand Awareness
The extent to which the brand is known among the public, which
can be measured using the following parameters.
Anchor to which association can be attached: +ve
• User Imagery: Coffee brand for elite people
• Usage Imagery: On the go, formal aspect or a place to hangout for rich
experience
Familiarity and Liking: +ve
• Customers gets a personalized experience at Starbucks which in turn
makes a connection
Commitment to the brand: +ve
• The commitment of customers to Starbuck is very high as
Starbuck often refer itself as third home to the customers

Brand to be considered during the purchasing process: +ve

• The transition from consideration set to evoked set is quick as
the customers are not price sensitive
• The relaxed atmosphere and the coffee enjoyment are the
drives for direct-sales
Conclusion
• Starbucks customers are not price sensitive
• The customers are ready to pay premium because of the
brand image
• Less brand switching
• Market share erosion is not evident with a brand like
Starbucks
Brand Equity = Brand Loyalty + Brand Awareness + Brand
Association + Perceived Quality + Other
Proprietary Assets
Based on our evaluation, the brand equity of Starbucks is High
References
• http://www.123helpme.com/starbucks-new-market-entrance--view.a
sp?id=167390
• http://marketingmag.ca/brands/why-starbucks-is-winning-at-loyalty-1
52974/
• https://
thebusinesstrategy.blogspot.in/2013/03/how-has-starbucks-been-so-
successful.html
• http://mdh.diva-portal.org/smash/get/diva2:113806/FULLTEXT01.pdf