Starbucks has a business strategy which has worked very well. In fact most businesses can take Starbucks as a role model when it comes to choosing the right marketing strategy (Pham-Gia, 2009). Adequate implementation and execution of a strategic marketing plan is a very great contributor towards the success of a business. This is an issue which Starbucks did long time ago. Even when a company has the best product but it lacks positioning, identification of target market and an ideal marketing strategy plan, it may not adequately succeed. Starbuck has successfully implemented and executed it marketing strategy a situation which has contributed to its high performance (Stevens & Loudon, 2006). The purpose of Starbuck is to provide a business place which gives people opportunity to gather and socialize between work and home. The main marketing strategy for Starbucks is the three place concept. This strategy has made Starbuck successful since people of all races, age and socioeconomic status (Boyd, A et al, 2006).
In the beginning when Starbuck was started, its target markets included affluent, well educated, white color patron and individuals between the ages of 25 and 44 (Tewell, K et al, 2006). With time, it was able to broaden its target market to include younger, less educated and individuals with low income status. Despite broadening their target market, their first target market expanded in terms of demographics where they were able to locate their stores. Their target market and positioning has contributed to their success. Their business locations are used as areas for socialization between office, work and home (Tewell, K et al, 2006). Due to this reason many customers were attracted to Starbucks stores as a place to meet and socialize especially when individuals are not at work (Boyd, A et al, 2006). In addition to this, their coffee was of high quality which led to satisfaction of various customer needs.
Starbucks’ strategy was to position itself as one of the upscale brand and differentiate what it offers it customers to not just a coffee product but a rich experience (Tewell, K et al, 2006). The rich experience which customers get at Starbuck is their selling point. As stated, initially Starbucks’ target college students, social classes and neighborhoods that seemed that they could spare sometime and socialize at their stores (Tewell, K et al, 2006). Due to rapid growth and expansion, Starbuck had to expand its target market. Its target market for its new marketing strategy included every individual regardless of their age, social class or neighborhood. It targets small towns, rural communities, ethnic neighborhoods, highway rest stops and other markets which are already full of the same businesses.
Starbucks’ Marketing Strategy
Starbucks’ Marketing Strategy is executed in way that Starbuck locations are places consumers can meet, spend time and socialize when they are not in their homes and not at work. To achieve this, Starbuck made sure that each store they open is comfortable and relaxing (Boscheratto, P et al 2006). To attain these two aspects, comfortable furniture and relaxing music was included in their stores. In order to complement its marketing strategy, Starbuck ensured that services like wireless internet, handicapped access and good books to read are available (Boscheratto, P et al, 2006). In addition to relaxing and being comfortable at Starbucks’ stores, their products were of high quality and affordable prices.
Starbuck faces a lot of competition from similar stores like McDonald and Dunlin Donuts. To gain a competitive advantage over its competitors, Starbuck came up with a well integrated marketing strategy that basically uses a marketing mix (Boscheratto, P et al, 2006). This marketing strategy was implemented in order to create awareness of their products and make their products to be the most recognized and respected in all the target markets. The main aim of all these was to ensure that Starbuck meets the needs of its customers.
Starbucks’ Marketing Mix
Starbucks’ marketing strategy uses a marketing mix which includes product, price, place and promotion. Product- in order to satisfy the needs of its customers, Starbuck expanded its products to more than thirty brands of whole bean coffees. In addition to these it included eco-friendly cappuccino, coffee makers, oatmeal, smoothies, pastries and wraps (Boscheratto, P et al, 2006). This expansion of products was aimed at beating competitors and satisfying customer needs. Starbuck changes with the changes in the market and constantly introduces new products. It has introduced full leaf tazo tea lattes which are meant to introduce tea products at Starbuck. It has also introduced Instant via Ready which is a way of identity (Boscheratto, P et al, 2006). It displays the coffee which has been brewed at Starbuck. Incase a consumer what to use different home coffee makers, Starbuck provided cappuccino makers.
Price- due to the high quality associated with Starbucks’ products, they have a high price. There was the 41 bottomless 8 oz cup of coffee which Starbuck offered at 50 cents less than all products it offers. This is to show that Starbucks offers products which are affordable to all people regardless of their income (The Seattle Times, 2008). Due to the price which seems to be a bit high, Starbuck is coming up with value strategies which are aimed at ensuring that coffee products inexpensive and affordable especially to customers with low incomes (Boscheratto, P et al, 2006). Some of these strategies include a breakfast pairing consisting of coffee and an escort which could cost the customer only $3.95. In addition to this, it complemented expensive drinks with $2 brewed coffees (Boscheratto, P et al, 2006).
Place- Starbucks stores are situated in locations which are safe, conducive and easily accessible. It is found in all neighborhoods regardless of their status. Even where there is overcrowding of similar stores provided they are capturing their target market. In addition to these, Starbuck stores are very conducive to every body (Boscheratto, P et al, 2006). For those who like reading, listening to music or a quite place. In relation to place, Starbuck has introduced stores which do not have its logo or product but they are named in relation to a particular street. This helps customers to identify its stores by using the street name as the brand name (Pride & Ferrell, 2010).
Promotion- Starbuck has realized that promotion is very crucial when it comes to marketing. It is through promotion that customers get to know about the products being offered. The first promotion method which Starbuck uses is the Starbuck card. Starbucks card enables customers to market products via a referral system (Boscheratto, P et al, 2006). Once a customer buys a gift card, it helps in bringing other customers as they show it to their friends. They also use cards for corporate sales for purpose of rewarding employees, and customers. Second is delivery of coffee services to people in offices without coffee size restrictions. This makes customers loyal because they know that they do not have to leave their offices in order to get coffee services. Third is that Starbuck offers international teas and coffee so that the taste of every customer is catered for. This is due to the fact that their customers are from diverse backgrounds (Boscheratto, P et al, 2006). Fourth is the use of philanthropy for promotion. It promotes itself by sponsoring other organizations an activity which builds its image and enhances awareness in different communities (Boscheratto, P et al, 2006).
In addition to the marketing mix, there are other aspects included in the marketing strategy. The first aspect is use of a perfect cup of coffee where though expensive, their coffee of high quality and many customers have confused to have been satisfied (Kembell, 2002). The coffee is rich, has a delicious taste and an aroma. Second is the third place concept in which they provide another place apart from home and working place (Bussing-Burks, 2009).. This is one concept which has led to attraction of many customers. Third is customer satisfaction which has been achieved through customer service, quality products and an excellent coffee experience (Kembell, 2002). Fourth is creation of a Starbuck’s community through a website which is easily accessed by customers. Customers get a chance to express their opinions through the website and Starbuck gets involved in the discussion (Kembell, 2002).
Fifth are the smart partnerships which are used as a strategy for expending the business. It forms strategic partnerships which has helped Starbuck Corporation to increase its sales (Kembell, 2002). Sixth is innovation in which the company comes up with ideas used to improve their products and services (Bussing-Burks, 2009). Through innovation Starbuck has been able to add flavor to their coffee, increase number of products offered and offer internet services in its stores (Pham-Gia, 2009). Seventh is brand marketing where high quality of the products helps in marketing themselves (Kembell, 2002). This has been one unique aspect in the marketing of Starbucks products.
Starbuck has been able to differentiate itself from its competitors by using high quality products and third place concept. It tries to meet the needs of all its customers which are reflected its prices and varieties in products offered. Starbuck target every body regardless of their social class, age or residence (Lamb, 2008). It aims at not only providing coffee but providing a good experience. It provided a place where people meet and socialize hen they are neither at home or in work place. Their products are highly priced and that is why it is implementing value strategies to make inexpensive coffee especially for individual with low income. Despite the fact that there are many coffee stores, Starbuck has been able to differentiate itself which has contributed to its competitive advantage.
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