From the very beginning, the present Starbucks that we see today was not there. The organization has got a very humble beginning when three fanatics that comprise Gordon Bowker, Gerald Baldwin, and Ziev Siegl established a small coffee shop at the heart of Seattle’s pike place market in Washington. The corporation is an American global coffee company and coffeehouse chain that has got its base in Seattle (Cheng, 2018). The organization is regarded as the biggest coffeehouse corporation globally with over 20, 366 stores in 61 countries. The organization’s location serves the customers with snacks, hot and cold beverages, micro-ground instant coffee, pastries, full-leaf teas, and whole-bean coffee (Bergstrom and Bergstrom, 2018). Additionally, most of its stores also sell packed food items, hot and cold sandwiches, as well as items that comprise of mugs and tumblers. Serving coffee may be deemed to be a common part of several other restaurants. However, a marketing mix that is effective makes products appear unique and uncommon to the customer. A company’s marketing strategy and marketing communication mix require full commitment from the organization with every employee and the departments working together towards the attainment of a common goal. The marketing strategy aims at identifying the market being targeted and developing an effective marketing mix for the target market (Bizjournals.com, 2018). The aim of this report is to analyze Starbucks’ marketing strategy and the marketing communication mix by determining if the identified consumer behavior factors in the previous assessments align with Starbucks’ current marketing focus. The last part will offer strategic recommendations to the board of directors.
In 1971 when Starbuck was opened, the primary product that was offered in all Starbucks stores was the dark roast coffee. Howard Schultz later joined the company as Starbucks’ Director of Retail Operations and Marketing. Schultz came across the “coffee culture” while he was on a trip to Italy. Schutz thought this could be replicated in the US, offering the company’s brand of dark roasted coffee and including expresso drinks to its menu. However, this coffee culture was rejected by the Starbuck’s founders, and Schultz eventually bought Starbucks’ (Barker, 2013, pp.111). Starbucks’ coffee’s product line later expanded to incorporate espresso drinks which comprise of lattes and cappuccinos. These varying choice of drinks have grown to meet the customer’s needs. The corporation is observed to have its store locations everywhere globally; including to the point of having the shops across the street from each other. This begins in the neighborhoods and the remote areas and has expanded to big cities such as the New York City. In the United States, it is possible to spot a Starbucks Coffee Shop anywhere.
With the “place” of the marketing mix, an individual may consider the store types to be as essential as the location. According to most of the Americans, primarily, there are two main “places” where they spend most part of their time; this may be either at home or at their work places. Starbucks coffee shops’ vision is to inspire the clients to accept the corporation as their “third place” (Borland and Lindgreen, 2013, pp.179). Every coffee shop’s store décor is similar if not identical and is designed to be both comfortable and cozy. For instance, the coffee shops have got big easy chairs, including tables and sofas where customers can gather around. Additionally, they also have got high top counters that have got several electrical outlets which attract customers who are ready to take advantage of free internet availability, along with the music that also adds to the ambiance. Nonetheless, during the winter months, some of the corporation’s locations have got a burning fireplace that warms the atmosphere.
It is very rare and most difficult for an individual to spot a promotional advertisement that relates to Starbucks Coffee either in the television commercial, newspaper, magazine, billboard, or on other types of advertising campaigns. The corporation uses the “word-of-mouth” marketing strategy to advertise its products. Starbucks allows the high quality of its products as well as the legendary service to promote the corporation’s brand (Cohen, Prayag and Moital, 2014, pp.891). The word-of-mouth marketing strategy has played a huge role in ensuring that Starbucks Coffee Corporation is successful. Starbuck’s front line Baristas have not only been trained to prepare the specialty coffee drinks but they also make sure that they incorporate the art of availing “legendary services” to the company’s customers (do Paço, et al., 2013, pp.417). Generally, the strategy entails promotion of the personalized service through learning the names of the clients, their specific drink preferences, the customers’ occupation, including the personal information that relates to the client’s life events and family.
When Starbucks was opened, its mission was to establish the company as a global coffee premier purveyor while at the same time improving on the company’s uncompromising principles as it expanded its market share (Valos, et al., 2016, pp.31). However, currently, Starbucks has added to its mission statement that it seeks to nature and inspire the human spirit-One person, One cup, and One Neighborhood at a time. The company’s brand is promoted on a daily basis with all the staff working with the organization’s mission in mind.
In no way, form, or shape has the corporation has offered any competitive pricing for the products which are sold at its stores. An individual may consider that the Starbucks’ brand “experience” is included in the products’ price. However, as depicted above, having all of the Starbucks’ front line Baristas working by keeping in mind the firm’s mission statement as their guideline, the customer purchases a cup of coffee based on the personalized legendary service experience (Diallo, et al., 2013, pp.431). While Starbucks marketing mix does not describe the target marketing objectives, the corporation’s target market consists of any person that is willing to pay a premium price for the “Company’s Experience.” This marketing mix decision was made with an extensive strategic planning and the understanding that using such a unique marketing program could be risky to the success of the corporation.
Also, in its marketing communication mix, Starbucks uses promotional strategies. The corporation has implemented several promotions aimed at reaching the company’s target market. Starbucks Card is among the promotions that the corporation has used as form of its marketing communication mix. This is a technique that allows the clients to promote the Starbucks’ products using a referral system. For instance, when a consumer buys a gift card, it show the brand loyalty and also avails Starbucks with free advertising, thus attracting new clients. The corporation also gives a card in the instance of corporate sales (Gao and Bai, 2014, pp.662). These are used for extrinsic rewards to express appreciation to the staffs for the job well done or gifts to customers. Also, the other promotional implementation that is applied by Starbucks is that they deliver coffees to workplaces or even the offices without restrictions on the coffee size. Nonetheless, the corporation appeals to a broader customer base by availing international coffees and teas to accommodate the clients that are inclined to their home taste. The organization also uses the aid of performing a “good deed” as a way of promotion. Thus, the organization contributes to contribute to many non-profit organizations as a means of improving the company’s brand image and creating awareness in the local communities.
Initially, the corporation only targeted the social classes, college students, and neighborhoods which were ready to purchase a $6 coffee and spend their time with their friends at the stores. However, with the rapid expansion and growth, the company’s target market has also expanded to incorporate every person from every age. In international markets, Starbuck began by targeting ethnic neighborhoods, small towns, highway rest stops, rural communities among other places. The company’s marketing strategy involves positioning Starbucks’ outlets where the customers can spend their time at than at the workplace or at home. Each of the company’s store has been designed such that it is as relaxing and comfortable as possible. Additionally, the company’s stores have been made as readily available and accessible where most of the individuals go to relax (Kumar, Rahman and Kazmi, 2013, pp.613). The corporation has also included offerings that consist of handicapped access, common collaboration areas, wireless internet, and complimentary books. The company’s stores are positioned at strategic places where clients can spend their time in a comfortable setting. Also, Starbucks’ product lines are as well positioned at the higher end in terms of quality and prices. Starbuck’s marketing success can be attributed to the quote by the company’s CEO, Howard Schutz that suggests that the corporation establishes the value of purchasing a product at the company through its uncompromising quality.
The corporation’s competence in the style of its stores including its creative coffee drinks has propelled Starbucks to the front among the other coffee retailers. The corporation does not only stand for a cup of fresh coffee (Dudovskiy, 2018). The corporation is all about the passion for a quality product, an understanding of coffee’s culture, excellent customer service, along with the passion for the soul of the customers. Below are the necessary marketing strategic recommendations for the corporation.
Regarding the company’s product strategy, it has got the commitment to source the best quality coffee globally. Starbucks only buys coffee from suppliers who grow and process the coffee by meeting strict social, quality, economic, and environmental standards. The company’s broad product differentiation is dependent on innovation and competence to establish a profitable and long-lasting competitive advantage. Regarding its brand image, the corporation combines its marketing programs with the merchandising strategy to develop and maintain a distinctive brand image for its coffees (Pérez, Salmones and del Bosque, 2013, pp.226). It is beyond doubts that the corporation has got a competitive advantage in terms of quality. However, regarding convenience, regardless of the efforts to have the Coffee Shops at every corner, there are many supermarkets compared to the Starbucks bars. The company’s board of directors should actively pursue substitutes that would effectively compete in this coffee market’s convenience sector. To ensure that it meets the local preferences and tastes, the company should act locally. The board of directors can introduce high margins of wine and cocktail and beer thus matching local tastes hence boosting its revenue.
The corporation’s stores are usually located in high visibility and high traffic areas. Customers are attracted to Starbucks by the high quality of coffee and the due to the creation of inviting and comfortable places that can be located conveniently. The corporation increases its market share by penetrating new markets whenever there is an opportunity. From past experience, it is difficult to stretch or transfer customer loyalty to a new product or channel within a short period (Pour, Nazari and Emami, 2013, pp.3775). As a result, it is likely that in the future, Starbucks will experience a gradual change in the purchasing power of its clients. Thus, Starbucks should change its current e-commerce strategy. First, the board of directors should consider adding value to the company’s value chain by expanding its website function. Also, the company should consolidate the public relation function. The board of directors may consider setting up online chat rooms to enhance stakeholders’ communication. Nonetheless, Starbucks should come up with free email accounts which help it further spread its fame and consolidate its clients’ loyalty (Shih, Chen and Chen, 2013, pp.537). Additionally, the board may add indirect products that are related to coffee such as coffee machine into the company’s online sales collection. Also, the board of directors may provide online coffee tour packages to avail of affordable hotel accommodation and travel tours.
The reason that Starbucks does not have a lot of conventional advertising is because the firm has noticed that there is increased competition for the attention of the customers in print media, TV, or even radio. To inspire individuals inside and outside the organization and reinforce Starbucks’ image and value, the company picks on one or more community events or charities (Schmidt, Spann and Zeithammer, 2014, pp.1223). For Starbucks to appear as a global organization, it should start participating and supporting local events and developing education in the developing nations or community activities for it to improve on its public relations with the international markets.
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