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Listening to Starbucks Alison Overholt July 2004 Leah Bungo Matt Smith Melissa Fredette
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Hear Music Background Howard Schultz, chairman at Starbucks, discovered Hear Music 10 Years ago in Palo Alto, California Starbucks purchased Hear Music in 1999 and launched Hear Music Coffeehouse
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Buy CDs and DVDs Burn CDs from a collection of Music (150,000 songs) Purchase Starbucks Hear Music on ITunes Listen to music Promote independent artists
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Why…. Starbucks operates in the Coffee shop business – Reaching plateau point? – Market becoming Saturated? Redefine their business Music and coffee go together – Personalized products – created individually
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Walt Disney (Cartoon Studio) – Theme Park – develops, produces, and distributes films Martha Stewart (caterer) – Multimedia company: Cookbooks, lifestyle-products, TV show Redefining Businesses
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Concept Roll out Add CD- burning capabilities to 10 Starbucks locations in Seattle With HP assistance have 1000 Hear Music locations by end of 2005 (mix of coffeehouse and retail)
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Other Exclusives Artists Choice – Exclusive to Starbucks – Sold 400,000 copies Playing for Change – Launches April 28th – Connect people of the world through music – Benefits (Red) Wire in the fight against AIDS in Africa
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2009 Update Slower than expected roll out – Closing stores (600 in US) Expanded offerings – Promotes CDs, DVDs, and Books at almost all locations – Sold 4.4 million CDs in 2007 – “Oprah’s Book Club” feel Conclusion – Increases foot traffic and time spent in stores by customers – diversifies revenue stream
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Sources International Herald Tribune Hear Music Trading Markets Playing for Change Smart Brief
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