STARBUCKS

Company Information and Background  Starbucks is known as the world’s #1 specialty coffee shop and has around 10,000 stores in more than 30 countries.  Starbucks is known as one of “The Best 100 Companies to Work For,” and was ranked fourth as one of the “Worlds Most Influential Brands”  The Starbucks company website explains that “Starbucks is named after the first mate in Herman Melville’s Moby Dick”

Mission, Goals, and Objectives  Starbucks states that its mission is “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow.”  Starbucks’ goals are to remain profitable and to produce social, environmental, and economic benefits worldwide.  The company’s objective is “to establish Starbucks as the most recognized and respected brand in the world.”

Business Structure  Starbucks is a corporation.  Howard Shultz is the company chairman and Jim Donald is the president and CEO of Starbucks.  Starbucks owns around 6,000 stores and offers licensees and franchises to run additional stores worldwide.

Competition  Starbucks’ top competitors are Caribou Coffee, Diedrich Coffee, and Dunkin Donuts.  Starbucks also competes with popular coffee manufacturers including Kraft General Foods, Procter & Gamble, and Nestle. Kraft owns Maxwell House, and Procter & Gamble owns Folger’s.

Market Segmentation

External Influences Target Market  Starbuck’s is a business that is applicable to a diverse group of people.  Starbucks considers itself the “third place – a place between work and home.” 1 Suburban young adult Professional on the go Age:18-35 Single I

Internal Influences Need Set  For the busy professional, Starbucks products are delicious, affordable and easily transportable goods that may be used for the need of hunger, craving, or caffeine.  For the young contemporary individual may see Starbucks as a trendy location to converse and gather with friends. Emotional Influences  Energy Boost  Stress Reliever  Celebration

Situational Influences Physical Surroundings  Decor  Wireless internet  Lighting Temporal Perspectives  Drive Through  Hours

Decision Making Influences Brand Loyalty  Starbucks is the leading brand and coffee shop out of all chains and independent coffee vendors, making brand loyalty of customers, a major advantage  Starbucks has a reputation for being a delicious product, making the coffee drinking experience more of an indulgence than a routine

Product and Product Position

Starbucks Product Line

Starbucks offers a wide product line  Hot and cold coffee beverages  Tazo tea  Non-caffeine drinks: Hot chocolate, apple cider  Ice cream, Frappachino’s  Food- breakfast foods, sandwiches, desserts  Books, Cd’s, board games, equipment  Gift Cards, mugs

Product Positioning  Strong value proposition  High-quality products  Great service  Consumers perceive Starbucks as being the “best” coffee around  Consumers are willing to pay premium prices because of this perception

Great quality and customer service leads to:  Starbucks exceeding customer expectations  High satisfaction levels  Loyal and repeat customers

Pricing and Distribution Strategy

Pricing External  Starbucks focuses on conspicuous consumption  Designer coffee brand due to them pricing above the market rate for a cup of coffee  Consumers want to consume a luxury brand

Pricing Internal  Status indicator → “I am drinking Starbucks; I have money to enjoy a luxury beverage”.  Target market purchases the brand name Situational  Consumers like spoiling themselves with the Starbucks brand (they feel that $3 for a cup of coffee/coffee beverage is money well spent)

Pricing Decision Process Factors  Each different Starbucks location is priced differently (because people are willing to spend more for example in New York City, than Towson, MD)  Towson University Starbucks on York Road Pricing Guide

Distribution Strategy  Luxury coffee with an environmentally safe mindset  Convenience (with many Starbucks locations) is what the population segment wants  Starbucks used for business meetings (wireless Internet available at all U.S. locations), a social venue and place to just sit and relax

Distribution Strategy  Consumers are able to enjoy Starbucks wherever they are (multiple locations)  Retail gravitation model (consumer will pick store based on store size and distance from customer)  Brand first, then the outlet second

Promotion Strategy

Promotion Mechanisms  No direct promotions  Commercials  Movie promotions  “Akeelah and the Bee”  Walking Advertisements  Customers carrying cups

“In Store” Promotions  Black Apron  “Drink of the week”  Equipment

Television Promotions  Unnecessary  Several locations  Double Shot Espresso  “Bring on the Day”  Last aired Spring 2005  Caters to target market  oplay?docid= &q=starbucks+co mmercial&pl=true oplay?docid= &q=starbucks+co mmercial&pl=true

Customer Service and Feedback  Highly trained employees  Environmentally-friendly and conscious to consumers  Great relaxed atmosphere/ambiance  Friendly communications between customer and employees

Regulations  Coffee temperature-timing of delivery  Warning labels- Notifications of hot beverage, “Contents: Hot Beverage Inside”  Protective sleeve provided  Additional mission statement for environmentally sound products

Recommendations  Increase the number of drive-thrus  Corporate catering  Keep stores open later at key locations  i.e. high area/city stores  Enhance the retail aspect of the business  Add more food options in stores