Listening to Starbucks Josh Hayden Dan Bianchini

Redefining Starbucks Howard Schultz felt that they needed to further build the Starbucks brand, so they could reach their goal of becoming the world’s biggest brand. Expanding on existing CD sales, was a way to achieve this. The following are the guidelines he followed:  Think like an athlete.  Team up with like minded partners  Dream big  Stay small

Where did he want to go? Schultz realized that Starbucks was an entertainment destination, a place for a break with friends, as well as for community gatherings. The idea for a music service is very grounded for why people come to Starbucks. The experience at most record stores is off- putting with customers overwhelmed by the volume of products, but still unable to discover great, new music.

Hear Music While on an “idea hunting” trip he stumbled across a small record store called Hear Music and fell in love with it. They were the first to introduce the concept of a listening station  Headphone equiped CD stations where shoppers can “try before they buy.”  Prides itself on introducing customers to music from off-the-beaten-path artists

Hear Music The intimacy, quality, and customer focus that they incorporated reminded Schultz of his own company He decided to acquire this company, and integrate it into Starbucks locations in  Started selling Hear Music compilation CD’s in its stores in  Launched a popular series of CD’s called Artists Choice (musicians such as Rolling Stones share their favorite songs) nearly 400,000 copies have been sold.

What do they offer? Customers can fully customize their CD purchasing. Start with creating an album title, selecting songs in any order, as well as choosing cover art, and customized CD designs. $6.99 for the first 5 tracks, and $1.00 for each additional song. 5 minute wait, and the customer receives their packaged, customized CD.

Core customer Shultz believed that the core Starbucks customer is and affluent 25 – 50 year old, that is more likely to be tuned into NPR than MTV. This goes along with the core of Hear Music.

Sources Listening to Starbucks, Marketing annual edition