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.”
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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
 http://video.google.com/vide
oplay?docid=12647274385
10422007&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