Starbucks has become a force to be reckoned with over the years in the coffee industry, providing a name for itself firstly in the United States and soon branching internationally. In this age, it would come across very hard to find someone who has not even heard of the brand Starbucks in their entire life. How is it possible for a small business to grow so rapidly and to even earn the recognition of the world? The way how Starbucks market themselves plays a very important role in how they are well renowned company today. Starbucks is well known for their ability of creating and capturing customer values. This study will talk about how Starbucks manage to grab the attention of the world through every single cup of coffee they put out.
Firstly, Starbucks exhibits the capability to be able to understand the marketplace as well as customers’ needs and wants. During the formation of the company, Starbucks main goal was to provide coffee beans and equipment to the public, however they shifted in to the café industry due to fact that Howard Schultz saw the need of high quality premium coffee to be more accessible to those in the United States. Cafes in Seattle at the time also lack café with conducive environments to accommodate various human activities including socializing and studying. Hence, Starbucks was reformed to cater to the need of a comfortable hang out environment and the lack of high-grade coffee mixes in the area. In terms of market offerings, Starbucks not only offers premium coffee and a peaceful surrounding but also focuses on other entities that make their market. Some of them include other products (pastries, food and non-caffeinated beverages) as well as their excellent customer service. Starbucks is a leading example in balancing the attention they give in to their coffee and the attention they give to their customers. The company ensures the customers get the best experience after every visit, even if it is for a short stop to get a morning cup of joe.
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Secondly, Starbucks has designed a Customer-Driven Marketing Management. Starbucks’s targeted audience is middle and upper-class men and woman who can afford Starbuck’s high pricing in everyday consumption. The company practices monosegment positioning which involves of building a business directly catering to only a single market segment (Mullins, 2004), in this case middle and upper-class customers. However, the company also practices adaptive and standby positioning techniques for more flexibility in the case of the downfall in their in-coffee sales. This can be seen by how Starbucks does not only provide only in-house brewed coffee but recently also bottled coffee, aiming for the packaged drinks industry as well. Starbucks has done this to overcome the inconvenience of lining up in their stores for a cup of coffee for its busy customers as well as to meet the high demands of coffee in areas where Starbucks outlets are not available.
Starbuck’s value proposition focuses on 3 aspects; producing high quality coffee by working directly with suppliers and growers, customer intimacy and an environment of the store that makes customers stay (Alsitrawi, 2016). The company has well off achieved all three of these goals in their business.
In terms of marketing management orientations, Starbucks maintains its holistic production concept in line with its societal marketing concept. According to Starbucks’s official website, the company ‘ethically sources coffee through responsible purchasing practices, farmer loans and forest conservation programs’ in preparing their coffee. Their natural production concept as well as societal marketing concept by being mindful of the environment is what attracts customers to choose their coffee over other premium coffee brands. Customers are attracted to the idea that them buying a cup of coffee from Starbucks can help achieve their role in contributing to the wellness of the environment.
As most successful companies do, Starbucks follows the marketing mix and changes the mix from time to time in response to competition or economy instability (Greenspan, 2019). The marketing mix consists of the 3Ps’ which are product, place, price and promotion. In terms of products as mentioned earlier, Starbucks does not only offer drinks but pastries and food. Starbucks also has their own merchandise line which is always a crowd puller. Place wise, all these items are all sold in store or can be bought from retailers or through the Starbucks mobile application, Starbucks Reward. Starbucks however follows a premium pricing strategy, taking advantage of the perspective of correlation most people tend to which is ‘higher price, higher value’ (Greenspan, 2019). The aspects of promotion relate on communication approaches to promote the firm and the products sold by the firm. In the case of Starbucks, the company relies on interpersonal interactions and advertising. Starbuck’s promotional mix consist of word-of-mouth marketing, advertising, sales promotions and public relations (Greenspan, 2019). As a company that prioritizes customers satisfaction, the company highly relies on word of mouth. Advertising and sales promotions are done within the media; on televisions, newspapers and on their media pages. According to Greenspan, Starbucks relies less on public relations due to fear of backlash, a trauma from the Race Together event in 2015 (Greenspan, 2019).
Starbucks’s customers relationship management is highly regarded. Starbucks consumers undergo what is commonly known as the ‘Starbucks Experience’ in which the company promises an excellent and memorable service from the moment you enter the store’s doors. Starbucks employees are trained to greet their customers the moment they walk in with genuine smile (Lam, 2013). They intimately connect with their customers without going too far off their place. The firm places customer service as its priority especially after Howard took over the company as his dreams was to achieve an Italian café style of serving coffee (Encyclopaedia Britannica, 2016). Starbucks also has the flexibility of drink choices to provide for wide ranges of consumers with their in-store trained barista. A small but impactful action that the company also takes in to practice is the writing the names of the consumers on to each cup of coffee they make, The idea of personalization and customization of drinks helps market the coffee chain to greater heights as it becomes more widely accepted and more attractive to other groups which could need specific dietary requirements or specifications.
Starbucks uses a wide variety of Customer Relationship tools in order to keep in touch with their consumers and to maintain consumer loyalty. Social media is one of the big key players in customer relationship for the company. The firm manages all types of social media (Facebook, Instagram, Twitter, etc…) in other to keep in contact with its consumers. The platform also allows the company to advertise and put their brand out to potential consumers. Starbucks handles their social media well by updating frequently about latest promotions, new drinks and additional information such as community service reports and merchandise details The social platform has also given a chance for consumers to voice out their opinions on their experience in Starbucks and the drinks they have consumed. A good example can be seen when they make polls on Instagram stories in order to gather information on crowd favourites. The company would also ask for the consumers comments and opinions on new drinks.
In terms of maintaining customer loyalty, Starbucks has designed a program called the Starbucks Reward Program. The reward program allows members to collect rewards, receive discounts and freebies, giving members more reasons to choose the brand over other brands.
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