Decoding the Success of Starbucks: A Social Media and Digital Marketing Marketing Case Study
By Aditya Shastri
Introduction
Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. The company operates in over 30,000 locations in 70 countries worldwide as of early 2020.
This blog is an in-depth analysis of Starbucks’ marketing strategies, complete with touching upon their target market, social media strategy, Starbucks’ marketing mix, digital marketing presence, campaigns, and their marketing efforts through the ongoing pandemic.
About the Company
As the world’s largest coffee-house chain, Starbucks is seen to be the main representation of the United States’ second wave of coffee culture. Starbucks coffee houses serve-
- Hot and cold drinks
- Whole-bean coffee
- Microground instant coffee known as VIA
- Caffe lattes
- Full- and loose-leaf teas including Teavana tea products
- Evolution Fresh juices
- Frappuccino beverages
- La Boulange pastries
- Snacks including items such as chips and crackers
- And also some offerings which are seasonal or specific to the locality of the store.
In 2010, the company began its Starbucks Reserve program for single-origin coffees and high-end coffee shops. It planned to open 1,000 Reserve coffee shops by the end of 2017. Starbucks operates six roasteries with tasting rooms and 43 coffee bars.
Let us now get to know how Starbucks made a mark for itself in the Indian market.
Starbucks In India
In the 2010s, Starbucks was keen on entering the Indian market. The company wanted to capitalize on the rise of coffee culture by targeting the niche upper-class segment in India. In 2007, it announced its entry in India but withdrew without any explanation. It was in 2011 that Starbucks finally made a grand entry into the market.
When the world’s biggest bistro chain wanted to enter the Indian market, they entered into a 50-50 joint venture with Asia’s largest coffee grower, Tata Consumer Products Limited.
After successfully launching their brand, the next important step in ensuring they were here to stay, was to nail their target audience.
Starbucks Target Market
Starbucks is a premium coffee brand; its customers are mainly from the upper economic segment or the upper middle class and upper class. The brand targets people who want a peaceful space to drink coffee and lose stress. These are mostly the higher wage-earning professionals, business owners, or other higher-end customers in the 22-50 age group. People with a fast-moving lifestyle want good quality coffee and some space to relax after a hectic day. Starbucks offers all these privileges in a single place. The target audience of Starbucks includes both male and female customers, and a large bunch of these customers are mainly in the 25-45 age group. Mainly the urban, health-conscious, and class-conscious consumers. The truth is, the company has done so well by knowing exactly who its target audience is at any point in time and going all-out to cater to those set of people.
So summed up, their target audience is-
- High-income spenders
- Urban-ish, on the go
- Technology early adopters
- Health-conscious professionals
- Flexible to change
- Reaching Beyond the storefront
Now that we understand their foundation and business, let’s finally begin to uncover the marketing strategies that have led to Starbucks becoming the giant it is today.
Marketing Strategies of Starbucks
Initially, Starbucks’ marketing mix in India was segmenting consumer markets on a socio-economic basis. Concentrating on working professionals and their need for a soothing workspace. Starbucks also segments its market on a geographic and demographic basis by setting up the stores where they can find their target audience mentioned above. Most companies enter a new market by focusing on a single segment, and if they happen to achieve some success, branch out into more segments. Starbucks did the same and now caters to teenagers and young adults as well, by developing its product range and social media marketing presence.
Starbucks’ marketing mix has helped the brand develop a unique market position for its products, where it’s about the brand’s overall differentiated experience. They have positioned themselves as a highly reputed brand. The company’s marketing mix, to target the modern, tech-savvy generation, has also grown the use of digital technology as well as social media for promotions and customer engagement.
Digital Expansion
One of Starbucks’ key priorities is to expand its digital interactions with customers. To do so, it is implementing new ways to attract digitally registered customers beyond the rewards program. For example, the coffee chain is offering mobile order services and leveraging Wi-Fi sign-ins at its brick-and-mortar stores.
Starbucks Social Media Strategy
Most people are familiar with Starbucks on social media. The company’s many social media accounts are known for their distinctive branding, interactive posts, and visually pleasing content. The diverse range of content includes recipes, photography, articles and features. But there’s more than meets the eye. The stream of content can be broken down into a series of campaigns geared at creating a greater sense of brand awareness and community.
Starbucks Product-based Marketing Campaigns
Starbucks focuses on promoting unique and fan-favorite beverages. The brand knows how popular their flagship items are, but more importantly, they know their audience craves this kind of content. They’ve even created social accounts for customers’ favourites -Pumpkin Spiced Latte and Frappuccino- where they push relevant and relatable memes to their die-hard audience. This is also where user-generated content (UGC) comes in. Consumer images of the more Instagrammable products, such as the Unicorn Frappuccino, are often selected to be re-shared via the official channels and also used in influencer campaigns.
Starbucks Corporate Social Responsibility-based campaign
Starbucks uses social change as a marketing tool, positioning itself as open-minded and inclusive. One example is the #ExtraShotOfPride campaign that supports the LGBT+ community.
Community-based campaigns
Another facet of Starbucks’ digital strategy is its emphasis on highlighting individuals and communities. Take a look at the #RedCupArt campaign, which not only increases engagement but also provides them with a library of UGC content. They use storytelling to show acts of courage and kindness in American communities, localizing the content. Starbucks puts in conscious efforts to humanize the company by sharing stories on their account which highlights the employees who play an essential role especially when consumers are distrustful of big brands. This sense of community also makes online coffee content social, very similar to how they practically invented the modern coffeehouse culture back in the day.
Festive Marketing
Starbucks has also initiated a new seasonal whole-bean coffee, #StarbucksDiwaliBlend, for their consumers across the country and select global markets. The latest exquisite blend is hand-picked and sourced from Tata Estates in Karnataka and Tamil Nadu. Starbucks Diwali Blend is intended as a tribute to the region’s rich and cultural coffee heritage and expertise.
Starbucks Digital Marketing Presence
Starbucks knows its audience is technologically advanced, which makes it imperative for them to have a strong digital marketing strategy. It’s clear how Starbucks prefers marketing on platforms where they have two-way communication instead of platforms like print and television which is more of one-way communication.
- Instagram – 248K+ followers
- Facebook – 1.1M+ likes
- Twitter – 161K+ followers
- Starbucks posts daily on its social media handles and comes up with challenges and games to engage its customers and increase its fan base
- The posts and engagement are consistent through all platforms and believe in creating an experience as compared to just a promotion channel
The recent Flipkart Starbucks twitter battle was an example of how active and fun a brand like Starbucks is and shows exactly why the brand is sought after with its target audience, especially the millennials. Outside of campaigns, they show numerous images on their platforms of friends and family enjoying drinks of Starbucks coffee together, interspersed with high-quality content that promotes seasonal products. By doing this, Starbucks has integrated itself into consumers’ social life.
Marketing During Covid-19
We are all aware of how suddenly the Covid-19 pandemic took over the world. All businesses, globally, were hit overnight. And had to figure out how to sustain themselves in these unprecedented times. The pandemic definitely impacted the Indian market heavily but Starbucks constantly improvised to mitigate the economic impact. A case study in itself, these were the steps taken by the coffee giant during the pandemic which proves why it’s the most valued –
CEO Navin Gurnaney announced that they are launching drive-thrus to encourage people to engage with them, and home delivery to make sure they are connected with their customers during the pandemic. The first drive-thru was at Ambala Chandigarh Expressway in Zirakpur. They have also launched their app – Starbucks India App so that customers can easily navigate and purchase their offerings.
Starbucks Social Media Campaigns.
#reconnectwithstarbucks campaign.
Starbucks launched its social media campaign in 2 phases. The first phase was where they asked their customers to share their ways of reconnecting amidst the pandemic and share their favourite Starbucks memory on their personal Instagram handles with the hashtag #ReconnectWithStarbucks.
In the second phase- “Half Cup Full”- they asked their customers to comment on their favourite beverage on the post. They then sent these customers voice notes of baristas hollering the customers’ names along with their favourite beverage to remind them of the famous in-store experience.
This was a great campaign as it not only reminded the people of all the good memories with Starbucks but also made them feel important and valued.
#StarbucksAtHome and #StarbucksDance
Starbucks launched 1 litre of freshly brewed beverages that could be bought via take-away or ordering through Swiggy and Zomato. 7 flavours were launched at the price of Rs.550 per bottle.
To promote the same, Starbucks launched the #StarbucksDance challenge where it asked its customers to shoot a dance video with the drink and upload them on their personal stories. They promised a year of free Starbucks for the winner.
Strategic Alliances to enhance the experience and reach
Signature merchandise launch with flipkart.
The pandemic caused a great shift in how people shop and also encouraged people to shop for home-grown products as compared to imported or foreign-based products. Starbucks used this shift to partner with Flipkart, to launch Starbucks Signature Merchandise on the online platform. The product range included custom mugs, tumblers, cold cups, and more. Customers can also soon order coffee brewing equipment from the comfort of their own homes. Starbucks operated in 12 cities only and hence, this was a strategic move to reach out to customers pan India at their homes during the pandemic while taking advantage of the growing dependence on E-Commerce
Standup Comedy Festival
Starbucks recently announced the #StarbucksComedyFestival where few lucky customers can win a free invitation to the comedy festival. The lucky codes would be present on the customer’s invoice. With a popular line-up of hosts like Sapan Verma, Azeem Banatwalla and Rahul Subramanian, customers will now be enthusiastic to shop more at Starbucks and stand a chance to win the invitation.
In conclusion, Starbucks is leading the market because of its dominating global presence and leadership. A consumer’s experience at a Starbucks location is arguably different from any other coffee shop because of its intimate atmosphere, welcoming environment, and unmatched service. Their inviting “ideal coffee shop ambience” should prove to be a sustainable competitive advantage. Starbucks’ implemented strategy of retail locations and on-site partnerships have received greater response rates, giving them the leading seat within the mature industry. Starbucks, thus, has a strong market position through its all-inclusive marketing strategy.
If you liked our analysis of Starbucks’ marketing strategy, be sure to check out the series of case studies on various other companies’ strategies written by our students. IIDE makes its students capable to analyse and curate such campaigns and studies. If you would like to gain these skills yourself, IIDE offers various digital marketing courses for people just like you. Start your journey in upskilling yourself today!
Thank you for reading!
Aditya Shastri
Lead Trainer & Head of Learning & Development at IIDE
Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs...... [Read full bio]
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Marketing & Branding
- 17 Feb 2020
Starbucks’ Marketing Strategy: What Your Company Can Learn
Effy Pafitis
This article is part of our ‘Marketing Strategies’ series, an in-depth look at how some of the world’s most successful companies promote their brand and their products.
While a competitive marketing strategy can significantly support the growth of any new company, it can be difficult for entrepreneurs to carve a unique identity for their brand in a crowded marketplace. Fortunately, many businesses offer examples of successful marketing strategies that have helped them excel in this area.
One such organisation is the US coffee giant, Starbucks. The business has leveraged a unique marketing approach to become an iconic brand, renowned for its premium coffee products and excellent customer experience. Indeed, as of February 2020, its strategy has helped the company open nearly 30,000 stores in over 70 countries worldwide, with an impressive 39.8% share of the coffee market in 2019 in the US alone.
To explore how Starbucks has achieved this, we've taken a closer look at their promotion strategy, as well as what you can do to implement these lessons in your own marketing plan .
Starbucks' Marketing Strategy
Founded in Seattle in 1971, Starbucks – one of the first US coffee house franchises at that time – quickly became known for the superior quality of its freshly-roasted, whole bean coffee. Since its establishment, the organisation has focused on a brand-centric marketing strategy, working to build and maintain a distinct identity around its optimal customer service, comfortable in-store environment, and sustainable coffee.
Starbucks continues to achieve this key marketing objective by championing social media marketing and consistently delivering digital campaigns that engage existing and new consumers; indeed, these campaigns frequently utilise user-generated content, transforming buyers into brand ambassadors.
Unique among its main competitors, Starbucks does not invest significantly in offline marketing ; its non-digital promotional communication is predominantly limited to television and print advertisements. Instead, the brand places greater value in bolstering in-store features that lend themselves to positive customer experience and satisfaction – a strategy that is clearly succeeding, with reporting revenues of $26.5bn in 2019.
Customer Profile
In line with Starbucks' market positioning as a premium coffee brand, the company's demographic is typically defined as relatively high-income individuals, primarily between the ages of 25 and 54. They are educated, on-the-go, young professionals and white-collar workers who are willing to pay a premium for handcrafted coffee. Their preferences include personalised in-store interactions and purchasing options that increase buyer convenience.
Starbucks' digital marketing activities and investments support its continued market research, providing valuable customer demographic insights. Online campaign engagements, Starbucks mobile app use and buyer competition entries allow the organisation to consistently evaluate the age, location, income and predilections of its customers.
As mentioned, Starbucks prioritises its online marketing and advertising delivery, raising awareness around its products, promotions, campaigns, social impact principles, merchandise and more. In the fiscal year ending September 2019, the company utilised a global budget of around $246m to this end; here are some of the ways in which that money was spent:
Social Media Marketing
Starbucks uses social media marketing to drive its promotion strategy to consumers. Key platforms utilised throughout include Facebook , Twitter, Instagram and YouTube. In addition to organically posting content, the coffee company invests in paid social media campaigns, using its wealth of demographic data to target particular consumer groups and new audiences.
All creative content prominently displays the now-iconic Starbucks logo , a key driver of its brand recognition and brand equity, and a symbol of its premium status.
The brand also leverages this digital activity to conduct conversations with consumers, fostering closer brand-buyer relationships and contributing to successful consumer retention rates.
Consumer Advocacy
Starbucks cleverly capitalises on user-generated content in its social media marketing practices, influencing impactful consumer advocacy.
Indeed, consumers are encouraged to post photos and videos of their beverages, merchandise and experiences with the brand online. Starbucks then shares this content on its official social media pages, as well as incorporating selected consumer material in their wider marketing campaigns. Consumers whose content is utilised can feel more included in – and valued by – the company, making them more likely to make further purchasing decisions, as well as publish more Starbucks-related content in the future.
User-created content is 2.4 times more likely to be perceived by audiences as authentic, compared to content created directly by a brand. This then creates further trust between the company and potential consumers, encouraging higher sales.
In-Store Marketing
To make its store locations more appealing, welcoming, and functional, Starbucks invests in a variety of in-store marketing efforts.
For instance, the brand began to offer free WiFi in all its stores in 2002, influencing consumers to stay for longer periods after their purchases, and fulfilling buyer preferences for continued connectivity.
Advertising messaging placed inside stores promote new products and loyalty scheme advantages to buyers, too, aiming to drive deeper awareness and generate further demand among existing consumers and, therefore, supporting the brand's customer retention aspirations.
Starbucks also uses the data available from its store locations to fulfil market research objectives , collecting and analysing details around customer sales, preferences and behaviour.
Competitions
Another promotional tool used online and in-store is competitions and sweepstakes. These contests typically encourage consumers to photograph and share content online relating to new store features, campaign banners, seasonal releases and the like.
This is a clever way to boost the online discussion around the brand, drive knowledge of new products, and increase traffic to Starbucks' website and social media pages. By using a dedicated hashtag to track competition entries, digital engagement becomes easier to analyse, clearly depicting how successful each sweepstake was in achieving its particular objective.
Loyalty Programmes and Mobile App Marketing
According to longstanding convention – namely, the 2001 research of Fred Reichheld of management consultancy, Bain & Company – acquiring a new customer can cost anywhere as much as five to 25 times more than retaining an existing one. This is something that Starbucks recognises, investing heavily in its loyalty programme and mobile app to facilitate customer retention.
The company released the first version of its loyalty programme in 2008 – now called Starbucks Rewards – quickly followed by the launch of its dedicated mobile application in 2009. The app's objective was to optimise consumers' end-to-end experience with the brand and allow Starbucks Rewards members to track their loyalty points and gifts easily.
Customers are encouraged to participate in the brand's loyalty scheme and download the app to be eligible for exclusive offers, order discounts, birthday gifts, and complimentary beverages.
Mobile notifications issued from the app also keep loyal users informed of any new announcements, product launches or upcoming rewards.
Finally, the addition of in-app ordering and payment options has increased the in-store convenience experienced by users, addressing modern buyers' demand for efficient service.
With high levels of personalisation supporting its marketing segmentation, Starbucks' mobile app facilitates customer loyalty and differentiation among competitors. The success of the app is evidence of this, boasting 23.4m users in the US alone.
Starbucks' brand-centric marketing approach is executed across various communication channels, predominantly online. Campaigns are consistent in their content type and deployment, always working to maintain the coffee company's premium status, conveying its ethical sourcing principles, promoting its beverages, and influencing loyalty among existing customers.
This focus on maintaining its superior image – while boosting customer experience and satisfaction – has undoubtedly contributed to the steady increase of Starbucks' brand value, which was calculated at around $32.4bn globally in 2018.
Despite selling coffee-related merchandise in all store locations, the company's revenue-by-product-type indicates that its core product leads the way, with global 2019 revenues for beverages totalling around $15.9bn . This is something not lost on the company, reflected in the content focus of its primary marketing campaigns.
Key Campaign
The 2017 Starbucks Unicorn Frappuccino product campaign is an excellent example of this, also demonstrating the global coverage that Starbucks' digital campaigns garner.
For just four days in April 2017, Starbucks launched an innovative digital campaign around a new, limited-edition beverage created predominantly to drive buzz online. Named the Unicorn Frappuccino , the brightly coloured drink was designed to be both sweet and sour, changing colour from pink to purple once stirred.
Rather than following the traditional digital marketing delivery route of releasing promoted banner ads online or generating awareness through its app, the company leaked attractive images of the product to social news site Reddit before its official release; immediately, this created high levels of consumer anticipation around the product. Except for light promotion through its social media channels, the company then let the media and its buyers do the rest of the work, taking advantage of the free advertising from both of these sources.
Indeed, the new beverage led to over 150,000 consumer posts displaying the hashtag #UnicornFrappuccino on Instagram, even though the drink was only available for purchase in the US, Canada and Mexico. The worldwide exposure, focusing on the aesthetically pleasing nature of the product as well as its scarcity, led to an increase in in-store footfall with consumers scrambling to get their hands on the Frappuccino before it became unavailable.
This higher footfall and sales during the period of April 19th to the 23rd allowed the company to secure new consumers, as well as recapture lost buyers, by reinforcing the brand's market positioning.
The campaign took advantage of the consumer trend of sharing photos of food and drink online, too, something that Starbucks spokespersons confirmed publicly. Indeed, entrepreneurs can take inspiration from this campaign, in particular, and understand that there is real value in making products visually exciting, as well as leveraging digital awareness generated by buyers and spectators alike.
Although the company can often find itself at the centre of PR disputes , Starbucks follows an exemplary marketing plan, tailored specifically to the identity and objectives of the brand. Its compelling strategy indicates how businesses can rely on consistency to maintain strong brand equity and build impressive brand value.
Indeed, rather than limiting the impact of this approach, its steady execution has made the brand renowned for particular principles and levels of quality, allowing existing and new consumers to have an accurate expectation of their in-store experiences both before and after their purchases. As a business owner, you can learn from this; evaluate the digital focus of your brand, and take inspiration from the incredible value of the awareness and demand that can be driven almost exclusively online.
In the meantime, if you still want to learn more about how the world's biggest brands sell their products and engage with audiences, then why not take a look at our breakdown of Red Bull's marketing strategy , too?
What do you think of Starbucks' marketing strategy, and what else can entrepreneurs learn from it? Let us know your thoughts and opinions in the comments below.
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In the competitive food and beverage industry, Starbucks emerges as the number one coffee retailer in the world. Its revenue in 2019 averaged $26.5 billion, a rise from 19.16 in 2019. 1 By 2021, the company had also opened 33,833 stores, with more than half located in countries outside of the US. 2
One of the most important factors contributing to that enormous success is Starbucks' unique and innovative marketing strategy.
An introduction to Starbucks
The first Starbucks was opened in 1971 with its name inspired by the classic tale Moby Dick which reminds people of the sea adventure of the early coffee traders. The coffee store belonged to three US businessmen - Jerry Baldwin, Zev Siegl, and Gordon Bowker but later changed hand to Howard Schultz. Inspired by a trip to Italy, Howard turned Starbucks into an espresso-based coffee brand. The rest is history - within 50 years, Starbucks has grown into the biggest coffee chain in the world. 3
The company's mission since its establishment day had always been to " inspire and nurture the human spirit - one person, one cup, and one neighbourhood at a time". After redefining the way coffee is consumed in America, Starbucks has been on a journey to conquer the coffee landscape worldwide. 4
Starbucks marketing strategy
Starbucks marketing mix is an important tool for the company to promote the right product at the right place and at the right time. But let's first look at its overall market segmentation and targeting:
Market segmentation and targeting
Starbucks segmentation strategy consists of demographical segmentation based on age, income, gender, and ethnic background as well as psychological and geographical segmentation.
The main demographic groups are between 25 and 40 with a high income and 18-24 year-olds from wealthier families. 5
Due to its premium brand image, Starbucks targets customers of the middle and upper-class who can afford to pay more for luxurious coffee. These customers also enjoy a cosy, peaceful environment where they can gather and relax with friends and loved ones. 5
As a reminder of these concepts, take a look at our explanation on market segmentation , targeting and positioning.
Starbucks product strategy
Premium quality and adapts to the local taste"
Starbucks' main product is coffee - produced by a few handpicked master roasters with over 150 years of experience. They use 100% Arabica beans to produce the highest quality for coffee lovers.
In addition to in-store coffee, Starbucks provides various coffee roast options for those who want to enjoy the drink at home. There is also a range of other beverages such as smoothies and tea, food such as snacks and baked goods, as well as merchandise. 6
The premium quality, a wide variety of products and top-notch customer service are important competitive advantages for Starbucks in the crowded food and drink industry.
As a multinational company , Starbucks adapts its products to suit local tastes and preferences.
In Japan, Matcha Frappuccino and Pumpkin Pie are included in the menu. French Starbucks coffeehouses offer luxurious Viennese coffee - hot coffee or chocolate served with cream along with a variety of brioche sandwiches and red fruitcake. 7
Starbucks place strategy
Uniquely designed store in different locations"
Starbucks sells its product in a uniquely designed store for each location.
In Japan, the coffee house is designed to resemble the traditional Japanese tea house. The design of the store in Amsterdam has a marble floor and replaces the American feel with the feeling of a local coffee shop. In Bangkok, they design the building with a gable roof which reminds them of the traditional Thai farmhouses. 7
Starbucks has also introduced "Starbucks on the go", a premium self-service beverage solution with a collection of tasty hot drinks. It can be added to the workplace and public environment for people to make their own drinks. 8 For those who don't feel like waiting in a queue, Starbucks provides an option for customers to place the order in their app, then collect them at any time convenient.
Starbucks promotion strategy
Unique and unconventional advertising"
Starbucks promotion strategy is unique and rarely relies on any advertising model. Traditional advertising formats such as billboards, newspapers, and magazines are not used by Starbucks to attract potential customers. Instead, the company believes in the use of Word Of Mouth and creative promotional campaigns . 9
To cultivate brand loyalty , Starbucks launches Starbucks Rewards and Starbucks Cards. The Starbucks Card provides the company with free advertising every time a customer purchases a gift card and gives it to their friend, family, or business partners. With Starbucks Rewards, customers can redeem free drinks by accumulating stars. In the UK, you can get 3 stars for every £1 spent. With 150 stars, they can get a drink of choice for free. 10
Did you know that the Starbucks logo is not fixed? In Saudi Arabia, the iconic mermaid icon is considered improper and is therefore replaced with a crown on waves.
Starbucks price strategy
Value-based and adaptive pricing"
Starbucks employs a value-based pricing strategy across the globe which is based on customer perception of the product value, which allows it to enjoy a tangible profit over the years. Three key factors making this possible is "specific product differentiation, communication, and understanding value". In addition to profits, value-based pricing helps Starbucks build a strong base of loyal, high-income customers and reinforce a premium brand image. 11
The price of Starbucks coffee not only varies in size and type but also with countries and cities. The following table shows the price of the same Starbucks coffee in different parts of the world:
Price for the same cup of Starbucks coffee around the world, StudySmarters Original, based on Voucher Box 12
Take a look at our explanation on the Marketing Mix to revise the 4Ps of marketing!
An analysis of Starbucks marketing strategy
Let's take a look at the different aspects of Starbucks marketing strategy.
Cross-cultural implementation
The marketing strategy is created and adapted in different parts of the world. The first step in entering a new market is to gather as much knowledge as possible about its religion, culture, perceptions, tastes, beliefs, preferences, attitudes, and values. After this, the company is able to develop unique product offerings and store layouts to match the local taste and preferences . The advertising strategy is also localized for the interest of customers whereas stores are placed in high traffic and high visibility locations to maximize customer reach.
To ensure a standardized operation on a local scale, Starbucks sets up a robust system for recruiting and training baristas & store managers . They search for experienced local business associates who can help them enter the market quickly and effortlessly. Their goal is to spread American coffee flavours all around the world and build a diverse international business portfolio .
Quality and connection
Starbucks prides itself on the quality of its products. Not only is the coffee beans selected from the best source but also the barista must undertake extensive training. In addition to the original offering, Starbucks adopts local beverages and foods to fit in with different cultures. This is often well perceived by the customers and increases their loyalty to the brand. Another aspect of Starbucks business is to reinforce human connections, which is reflected in the cosy and friendly atmosphere in each of its coffee houses.
Pros and cons of Starbucks marketing strategy
Starbucks marketing strategy comes with various advantages:
The high-quality coffee is a unique selling point that allows Starbucks to sell at a premium price and earn a higher profit
The friendly and cosy interior atmosphere matches Starbucks' target customers who are educated, high-income office workers and students who need a place to study, gather, and interact with their friends and loved ones.
Uniquely designed stores and adaptive products enable Starbucks to attract local customers in the beginning and give them a chance to get to know Starbucks culture.
Local partnerships in foreign markets provide knowledge and experience to help Starbucks quickly enter the new market and avoid complex regulations.
Starbucks stores are situated in high traffic areas which give the brand more visibility and a chance to make sales.
However, there are still some negative aspects to Starbucks marketing strategy:
The premium pricing strategy can cause Starbucks to lose a good portion of customers, especially those in developing countries.
Partnering with local businesses means that the company has to split its revenues by receiving a lower profit.
There are also high costs associated with the internationalisation process, such as location, taxes, wages, training programs
With the typical product – coffee and snacks, Starbucks face a prominent threat from companies like Dunkin Donuts & McDonalds. Not to mention the rising number of local coffee shops and eateries.
Starbucks is a multinational company that enjoys its success from an innovative and unique marketing strategy. The strategy makes up of four pillars: Premium products, value-based pricing, uniquely designed stores, and word-of-mouth advertising. Beyond marketing mix , Starbucks' open attitude and adaptability to markets worldwide are key to its enormous success.
Starbucks Marketing Strategy - Key takeaways
- Starbucks is a multinational coffee chain that originated in the US.
- Starbucks targets high-income, educated customers who are willing to pay more for premium coffee.
- The company adopts an innovative and adaptive global marketing strategy centred around 4 marketing mix elements - price, product, promotion and place.
- Starbucks always places quality and customer value first. This has allowed it to set a high price and enjoy a premium brand image.
- There are some negative aspects to Starbucks marketing strategy such as premium pricing deterring price-conscious individuals, high internalisation costs and the over-saturated food and beverage market.
References:
1. Statista, Net revenue of Starbucks worldwide from 2003 to 2021 , 2021.
2. Statista, Number of Starbucks stores worldwide from 2003 to 2021 , 2021.
3. Time Out San Francisco , 2011.
4. Starbucks, Our company.
5. Sabrena Khanum Binti Nawab Zadah Khan, Starbucks Market Segmentation and Targeting , 2018.
6. Starbucks, Products.
7. Days Translations, How Starbucks Adapts to Other Cultures , 2019.
8. Branded Solutions, Starbucks on the go.
9. Dexter Lee, It’s time for Starbucks to Change , 2017.
10. Starbucks UK. Starbucks Cards .
11. Abhiyash Jain, Starbucks prices products on value not cost . Why , 2020.
12. Natalie Keegan, COFF UP! The different prices you’ll pay across the globe for your favourite Starbucks coffee will shock you , 2017.
Frequently Asked Questions about Starbucks Marketing Strategy
--> what are the main marketing strategies used by starbucks .
Starbucks' marketing strategies revolve around its marketing mix.
1. Product: A premium quality, a wide variety of products and top-notch customer service
2. Place: Starbucks sells its product in a uniquely designed store for each location.
3. Price: value-based pricing strategy
4. Promotion: Use of Word Of Mouth and creative promotional campaigns.
--> Why is Starbucks marketing so successful?
Starbucks is successful because Starbucks always places quality and customer value first. This has allowed it to set a high price and enjoy a premium brand image.
--> What is Starbucks' digital marketing strategy?
The digital marketing strategy of Starbucks is Starbucks launched Starbucks Rewards and Starbucks Cards. The Starbucks Card provides the company with free advertising every time a customer purchases a gift card and gives it to their friend, family, or business partners. With Starbucks Rewards, customers can redeem free drinks by accumulating stars. In the UK, you can get 3 stars for every £1 spent. With 150 stars, they can get a drink of choice for free.
--> what are the pros and cons of Starbucks' marketing strategy?
Pros and cons of Starbucks marketing strategy:
1. USP as high-quality coffee
2. Cozy interior that matches with target customers
3. Store design to attract locals
4. Local partnerships
5. Stores located in high-traffic areas
1. Premium pricing may lose customers
2. Partnering may cause a loss of revenue
3. High internationalisation cost
4. Rising competition from local as well as international players
Final Starbucks Marketing Strategy Quiz
Starbucks marketing strategy quiz - teste dein wissen.
What is Starbucks product strategy?
Show answer
Starbucks offers premium coffee produced by master roasters. In addition, there are a wide range of snacks, bakeries, and beverages to serve the need of at-store customers. As a multinational company, Starbucks also adapts its products to the local tastes and preferences.
Show question
What is Starbucks place strategy?
Starbucks sells its product in a uniquely designed store for each location. The company also has "Starbucks on the go", a self-service beverage solution with a vast collection of tasty hot drinks. In addition, customers can place orders on an app.
What is Starbucks promotion strategy?
The company reinforces Word Of Mouth and create innovative promotional campaigns. To cultivate brand loyalty, Starbucks launches Starbucks Rewards and Starbucks Cards.
What is Starbucks price strategy?
Starbucks employs a value-based pricing strategy across the globe which is based on customer perception of the product value.
What are the three keywords of Starbucks marketing strategy?
- Cross-cultural
- Human connection
What makes Starbucks marketing strategy so successful?
Extensive market research
What does value-based pricing mean?
Set the price based on customer perception of the product value rather than the production costs.
Which of the following statement describes the cross-cultural marketing strategy of Starbucks?
Adapt menu items to different markets
What are the cons of Starbucks marketing strategy?
High product prices
What factors allow Starbucks to sell its products at premium price?
High product quality
What is not a benefit of Starbucks marketing strategy?
Store designs are adapted to the local culture
What is not a reason for Starbucks' partnerships with local businesses?
To capitalize on the existing business's knowledge of the market
What is not a feature of Starbucks marketing strategy?
Premium quality and adapts to the local taste
Starbucks promotion strategy relies heavily on traditional marketing.
Starbucks products include...
only premium roasted coffee
Starbucks adopts an ... product strategy.
Starbucks' stores are designed the same in all markets.
Give an example of Starbucks' adaptation strategy.
Store design:
- In Japan, coffee houses resemble traditional Japanese tea houses.
- In Amsterdam, the coffee stores have marble floors and replace the Amercian feel with the feel of a local coffee shop.
Starbucks creates different customer segments based on ...
Starbucks target at all income-level customers in the market.
Starbucks has a robust training system for recruiting and training baristas & store managers.
Premium pricing can reduce the number of customers Starbucks can reach.
Store location is not important to Starbucks.
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Starbucks: A Brewing Case Study
- Marketing Case study
- Starbucks: A Brewing Case...
A window into the world of coffee and much more!
Coffee has become a necessity over the era! Right from morning memes to evening talks, ‘everything happens over coffee’. Gradually with time, coffee hasn’t just become a beverage it is also a subject for many enthusiasts to talk about, debate, invent and invest in! We all grew up from 10 vali tapri ki coffee to 1000 vali Starbucks coffee. And now that we are adults, a Monday morning is incomplete without a dark cup of coffee just like the sky is incomplete without its sun!
The Journey of Starbucks!
Inspired by a Dutch Immigrant Pete, the three founders of Starbucks – Jerry Baldwin, Gordon Bowker, and Zev Siegl started their own premium range of coffee chains in the historic markets of Seattle. Just like the founders of DigitalFry who bonded over food, these three bonded over coffee and tea!
That is how the first outlet of Starbucks was opened in the year 1971 near Pike Place, Seattle. From 1971 to 2022, Starbucks has had an exciting journey which we shall discover in the following blog! Shall we?
The 70s: A decade of struggle
Starbucks opened its first store at Pike Place, Seattle. By the mid-decade, when there was a huge freeze on the Brazillia coffee crop and thus, Starbucks struggled to survive. By the end of the decade, one of the founders (Zev Siegle) left the company.
The 80s: A New Direction to Starbucks
Starbucks got its new direction after Howard Schultz joined as the director of retail and operations. Then the entire decade was the ‘Schultz-cade’ He went to Italy where he found his breakthrough product – ‘latte’ After which there was a huge surge in the business sales.
The 90s: All About Expansion
In the 90s, all Starbucks knew was expansion and profits! Starbucks had introduced the first-ever drive-thru. The 90s were all about Starbucksreaching in every part of the USA. It was in this decade that one of the founders sold the shares too, and the employees had partial consideration of the other set of shares.
Getting Around Marketing
There are 4Ps of marketing, and the most important one is the ‘Product’. Starbucks was sure of the fact that it had to sell premium coffee and thus imported it from Pete. Along with that, there was an array of products running from tea, baked food, smoothies, frappuccinos, and in some stores merch too!
Starbucks imports premium Arabica beans and then these beans go ahead into your cups giving you a taste of the premium coffee you paid for! Starbucks is not only famous for coffee but for its other range of products too. The low-fat, low-gluten food products that do not put the consumers on a ‘guilt trip’ help Starbucks attract a richer section of society who want ‘healthy cheat meals’
Starbucks wanted to tap into the premium category of consumers, thus the price range was simply expensive. It wanted to portray that the coffee you drink here, is worth the money you pay. It didn’t want to be go-to coffee but a ‘get-to’ coffee! This is how the consumers made a psychological note of the brand being premium.
Every Starbucks outlet, be it national or international is located at a premium place. It sits in an aesthetic location where the ‘Richie Rich’ gang goes often. This again illuminates the fact that Starbucks is a premium brand. Other than that, the interiors of Starbucks are ‘instagrammable’ which is why it appeals more to the millennials and thus increases the footfall. Uploading a story of the ‘Green Lady’ whilst you are working at Starbucks has become a trend everyone wants to jump on! Starbucks has 32,600 coffeehouse chain stores in 83 countries worldwide and offers varieties of coffee and other food products. In addition, Starbucks has 12,711 company-operated stores, which accounts for about 51% of the total number of stores, and 12,374 licensed Starbucks stores represent approximately 49% of the total stores
In 1981, Howard Schultz wrote history with outstanding promotional techniques at Starbucks. The consumers who came to the store weren’t fully acquainted with the coffee. Hence, he along with his team created a consumer-friendly model to help the consumers get well versed with coffee. Interactive conversations, brochures, and time were of the essence. This was the initial-most strategy, after which came along too!
Be it offline or online marketing, Starbucks had it all planned. Their social media page, sales promotion techniques, and acquisition techniques are all aimed at one thing – consumers! In fact, they changed their trolls into revenue as well. Remember when Starbucks was famous for misspelling and mispronouncing names? Although it could be a genuine human mistake, this mistake helps Starbucks gain more footprints!
An error is amplified higher, thus, when a barista misspells the name of a consumer, it goes on the story. There is a hashtag and the consumer has also tagged the outlet. This helps the brand to get its traction organically without any given brainstorming or money!
Summing Up!
The above case study stated strategies and a few facts that helped us understand Starbucks. To summarize the entire blog in one sentence, it is safe to say that, ‘Starbucks used its data, innovation, and invention to become the tycoons of the coffee industry’ To get into the detail, there is more to marketing than just the 4Ps. In reality, there are 7Ps, however, in this case, study four Ps are explored!
Other than that, Starbucks is stronger at the brand personality frontier too! Did you know that the name ‘Starbucks’ is inspired by a comic book named Moby Dick? After finalizing the name, the entire team immersed itself in various submarine books and came across a nautical figure. Yes! The Starbucks lady is known as a siren, someone who allures the people in. Although a siren does not really fit the coffee brand, the team had a feeling that she fits best! That is how we have the name and the logo!
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Segments in this Video
Marketing strategy (03:30).
Starbucks is the world's largest coffee house chain, serving an average of 50 million customers per week. The average age of a Starbucks employee is twenty five. Some people view coffee as symbolic of a rich life style.
Specialty Coffee Connoisseurs (03:05)
The key to quality coffee is in the roasting. Starbucks was started in 1971, by three college friends, who outgrew the coffee counterculture. Howard Schultz bought the company in 1987, with the belief that coffee bars needed to have a relationship with people in the community.
Branding Using Local Designers (05:47)
Starbucks product, service, and ambiance experience bring back return customers. Starbucks places great emphasis on service, especially when spelling a person's name correctly on their cup. The coffee company created new cup sizing that is still in use today.
Atmosphere in a Coffee Bar (03:00)
A key part of Starbucks growth was expansion by selling more coffee to new people. In 2011, Starbucks bought a juice company called Evolution Fresh. The French company Groupe Danone partnered with Starbucks to launch a line of Greek yogurts.
Channel Development (02:54)
Starbucks shops can be found on college campuses, hotels, trains, and other places where coffee can be sold. In 2013, the United States developed the signature aisles, a kind of mini Starbucks retail outlet within the supermarket rows. Starbucks wanted to rival the packaged coffee market.
Smart Marketing (03:50)
Starbucks tries to engage with customers to give them insights into the company in order to make them feel like insiders. Howard Schultz stepped away as CEO of the company; stocks fell in 2008 and he returned.
Problems With Automated Scheduling (03:10)
In 2014, Starbucks launched several staff and community initiatives, like paying for college. The Starbucks Workers Union was formed in 2004 to address complaints of low pay and lack of benefits.
Barista Shares Her Story (01:28)
Starbucks ran an ad which suggested that all baristas were offered full benefits, but the coffee servers struggled to maintain the hours required in order to get the insurance coverage. Once workers became eligible for benefits, the high cost and high deductibles made it out reach for them.
Credit: Marketing Strategy Case Studies: The Starbucks Experience (00:06)
Credit: Marketing Strategy Case Studies: The Starbucks Experience
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Marketing Strategy Case Studies: The Starbucks Experience
Description.
Starbucks is the essential success story of the American capitalist dream. From humble beginnings in 1971 as a Seattle coffee store, it’s become a multinational with over 21,000 outlets in 63 countries. Its brand is universally known. This program looks at the role of acquisition, brand-stretching, social media, and new channel development in Starbucks' success and considers criticisms of some of the company's policies.
Length: 27 minutes
Item#: BVL128527
Copyright date: © 2015
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Starbucks Marketing Case Study
Background analysis, company analysis, marketing analysis, pricing strategies, reference list.
Starbucks Coffee Corporation was founded in 1971 in Seattle, the USA. The company is a brand premier coffee retailer and roaster. Nowadays Starbucks operates in more than 62 countries and has approximately 200 000 employees. The company’s feature is that they use only high-quality coffee and tea sorts with a variety of supplies and food items. It is an interesting fact that Starbucks offers more than 87 000 combinations of coffee and tea drinks.
In 1992, Starbucks has gained popularity with 165 stores around the world and became a public company when it launched its initial public offering (Jeric, 2021). The company continued expanding globally and opened another store in Asia namely in Singapore. Nowadays China is the second-largest country with Starbucks shops as it has more than 15 000 stores across the country. Japan is the third nation with more than 1 500 coffee shops.
Speaking of the customer statistics, it is necessary to point out that the main target of Starbucks corporation is affluent and high-income citizens. Their logic is that people with more money want to drink branded high-quality coffee. There is no surprise that Starbucks shops are opened in well-off neighborhoods, near office buildings and in prestigious parts of a city. Still, Starbucks is also popular among middle-class people because they want to feel the prestige and afford themselves a cup of branded coffee, but not so often as affluent people do.
It is also clear that some people use Starbucks not as a place to drink coffee but as a place to sit and do their chores. It is a common case when a person comes to Starbucks with a laptop, orders a cup of coffee or tea and spends hours sitting and doing their job. It has become available thanks to the WI-FI services affordable in Starbucks.
Speaking of competitors, the industry has a monopolistic competition, with Starbucks having the largest market share. Although the main opponents include Dunkin Donuts, McDonald’s McCafe, Starbucks has no clear competition that can truly rival it in size or revenue on a global scale.
Starbucks was originally founded in 1971 by Jerry Balswin, Gordon Bowker, and Zev Siegl, and the first shop was situated in Seattle Pike Place Market. From this location, Starbucks sold high-quality whole coffee beans, dark-roasted in small batches.
The name of Starbucks was chosen in honor of the coffee-loving first mate in Herman Melville’s “Moby Dick”. The current company logo, is a twin-tailed siren, from Greek mythology, encircles the Starbucks name.
Starbucks stores and cafes offer a clean, relaxing atmosphere with free wifi for customers.
The Starbucks operation system is driven by its goals and missions. They include strengthening positions in the coffee industry, investing in technologies and the customers’ comfort, and building brand awareness.
Starbucks organizational structure includes geographic division by regions, which is considered as the operating segments: The first segment belongs to ‘Americas’, which consists of the US, Canada, and Latin America. The second segment includes China, and the Asia Pacific, the third segment covers Europe, Middle East and Africa (Mazouni, 2017). The last piece is named Channel Development, which compromises roasted whole bean and ground coffees, a variety of ready-to-drink beverages, and other branded products.
The revenues of Starbucks are originated from the following business segments: company-operated stores, consumer packaged goods foodservice operations licensed stores.
Starbucks offers a wide range of products. There are more than 30 blends and single-origin premium coffee types, fresh-brewed coffee, hot and iced espresso beverages, coffee and non-coffee blended beverages, smoothies, and teas. The company also provides its clients with the ability to buy official merchandising products. They include coffee and tea brewing equipment, mugs and accessories, packaged goods, music, books, and gifts. It is necessary to point out that Starbucks mugs and thermocouples are considered to be one of the most popular gifts for everyone.
As Starbucks is oriented toward affluent customers, one of its marketing strategies is the location. As it was said above, Starbucks has approximately 20 000 stores and they are mainly situated in large cities near office buildings, wealthy avenues and shopping malls. Still, speaking of America, it is also possible to find Starbucks in small villages. This strategy works well because it is common for businesspeople to come and buy a cup of coffee in the morning before going to an office and then having a snack with another cup during the day. People who have money want to get the best service and high-quality drinks and Starbucks can offer these things.
What is more, age segmentation is also part of the strategy. As the company is oriented on wealthy people, it is possible to suppose that people from 25 to 40 are the main target of Starbucks. Moreover, the segment includes children of richer parents and their age varies from 16 to 24.
Then it is necessary to point out that good customer service can also be called a part of Starbucks marketing strategy. Clients are free to spend as much time in a coffeeshop as they wish, Starbucks always has an open space with tables, chairs or lounge zones where everyone can meet their friends or have a chat with another random client (Gleeson, 2019). Moreover, coffeeshops offer free WI-FI zones so customers can work there or consume internet content for free while drinking or eating.
It attracts people so they can order more than one cup of coffee or tea or buy a salad or a sandwich while they are working on a project. Finally, Starbucks is extremely personalized. Employees always ask for people’s names to write them down on cups or write any greeting or a piece of advice there. It creates a special atmosphere between a client and a staff member and it certainly attracts a person so they have a desire to come again and get one more beautiful and interesting signature on a cup.
Every business can use various pricing strategies for best-selling its product or service. It is important to set the process to gain maximum profit. A wide range of designs is usually used to protect an already existing market from new competitors, to increase market share or to enter a new market. Starbucks Corporation and its successful pricing policies are the object of interest for everyone who wants to promote his or her company in the sphere of food and drinks services. The company uses a great number of techniques and sources to maximize its profit and attract more and more clients around the world.
To begin with, it is necessary to say that Starbucks has always offered its clients high-quality food and drinks. It is crucial to take into account the price of premium coffee beans, the labor costs and shipping expenses. Nevertheless, it is impossible to deny that Starbucks coffee products may be overprice. Besides being expensive, the prices of Starbucks coffee vary around the globe. According to numerous data sources like the MarketWatch, a cup of Starbucks latte can cost up to $12 in Russia and $7 to $8 in most Asian countries (Morris, 2018). Still, even though Starbucks coffee is so expensive (approximately $3.5 per medium cup), a client always knows that he or she pays for a rich taste and flavor.
Then, here it comes to the place. Starbucks has always been focused on creating their stores as the medium between work and home for a person. It has always been a special third place where people could energize on their way from home to work and have a rest after a hard day in an office before going home. The atmosphere is always important for a person as it is one of the crucial concepts of how a store should work. People should feel comfortable in any of their conditions, whether they are feel sleepy or exhausted. One of the aspects of Starbucks pricing policy is exactly the environment of their coffeeshops, which customers are ready to pay fo.
Technologies have become an essential part of every person’s life. Social networks unite people all over the world and Starbucks did not lose the chance to take a moment and create a special community around the brand. The Starbucks website allows users to share their experiences and reviews of drinking coffee and visiting the stores. What is more, social nets, mobile apps and other resources connected with Starbucks give customers a chance to follow the news and discount sessions provided by the company.
Personalization is another point that shapes the Starbucks pricing strategy. Clients always feel delighted when they are treated individually and are ready to come to this or that place again and again to get personal service. Starbucks is smartly using this knowledge as their approach is represented in writing people’s names on cups with coffee. Moreover, a customer can ask to write any greeting or signature, which is also a pleasant step towards winning credibility. It is obvious that a person will come back to the store again and again if he is treated in a unique way there.
Throughout the existence period of Starbucks, the organization has been known for implementing innovative ideas. Starting from offering a great variety of coffee flavors to providing availability to order food, the Starbucks Corporation has always set the rules of how a perfect coffeeshop should operate (Kline, 2017). What is more, Starbucks is one of few coffee companies that has its own mobile application available, where discounts, news, and the possibility to order coffee online are presented.
Finally, the marketing strategy of Starbucks has always been oriented on the ‘word-of-mouth’ advertising method. The quality of drinks, service and approach of employees have always spoken for themselves. The connection with the brand’s pricing strategy comes from the idea that people should pay for the famous coffee worldwide coffee with few commercials on TV and in other mass media resources.
To crown it all, it is necessary to state that Starbucks provides a successful pricing policy implementing various strategies and using them for maximizing profit. The last point is true as the company has maintained the leadership in the market of coffee selling since its foundation till present times.
Mazouni, Mourad. (2017). How Starbucks uses pricing strategy for profit maximization. Pricing and Revenue Optimization , pp.2-4.
Gleeson, P. (2019). How to open a small taco place. Small Businesses , p. 1.
Jeric, N. (2021). 30+ Starbucks statistics and facts with pumpkin spice. Capital Counselor , pp. 1-3.
Morris, Ch. (2018). Starbucks quietly raises prices—again. Fortune 500 , pp. 1-2.
Kline B. (2017). Starbucks opens a new store in China every 15 hours. USA Today, p. 2.
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Starbucks Marketing Strategy Case Study
Starbucks founded in Seattle in the year 1971 and at that time it was one of the first US coffeehouses that quickly became known among the people because of its high quality roasted, whole bean coffee. Starbucks has the key aspect for its great awareness in the people i.e. it’s brand-centric marketing strategy since the time of its establishment. Starbucks has been focusing, working and maintaining its distinct identity among their customers and services for its high-quality sustainable coffee and in store comfortable environment.
Thus, we will discuss about the marketing strategies of Starbucks globally for achieving their marketing objectives in all of the company marketing principles.
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Marketing Mix Analysis of Starbucks
Marketing mix (4Ps of marketing) of the Starbucks supports their goals and objectives of the marketing. This leads the company position to become the leading coffee house chain in the world. The marketing mix of the company is the part of the marketing plan that comprises product, place, price and promotion. Starbucks marketing mix helps them to create brand image and popularity. It is very clear to see that how an effective marketing strategy supports marketing mix of the Starbucks brand and helps them to achieve business growth as a multinational company.
- Product: Starbucks has the premium quality coffee products aims for high standards. Their innovative services in their products allow them to provide outstanding value to the customers with higher satisfaction. It categorizes their products in 8 types of drinks and 7 food categories to stand in the competitive edge and satisfy the customer’s needs. They are constantly evolving their products in flavored coffees and tea. In order to identify the customer’s specific needs, they also launched non fat milk products. As a matter of fact, Starbucks is one of the prominent coffee retailers who offer seasonal products having Frappuccino coffee in the summer and latte in the Christmas. Company always ensure their quality control measures and richness in their brand by including high quality ingredients. Therefore, the company employees always make sure they must stick to the company’s mission and goals.
- Price: Price of the products determines the quality and value. Starbucks is on its focus to provide high value to the customers by delivering them quality bean coffee and assuring that their employees and staff must get involved in the effective and efficient training programs. Despite of its expensive coffee products, the company still creates an environment where customers can enjoy their coffee. Pricing strategies of Starbucks started to enhance their competitive edge when they offered 1$ bottomless cup of coffee which can be allowed to refill any number of times and thus made it less expensive than any other products. In order to make people buy their expensive products, Starbucks pricing strategy focuses on the correlation between high price and high value. Therefore, they are maintaining their high end specialty image and satisfactory customer experience.
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- Place: This aspect of the marketing mix helps to know which locations and areas would be better to sell the products at what prices. Starbucks provides their products at cafes and coffeehouses. As in the US, we can find Starbucks stores in any neighborhood areas with the high traffic. It clearly indicates that Starbucks strive to open their stores in the highly visible and happening locations. However, Starbucks now develop its mobile app services online to reach more and more customers. This mobile app service allows customers to place their orders online more conveniently and makes them to get foods and drinks. Therefore, it shows how company is adapting to the times and technologies and market conditions.
- Promotion: This aspect of marketing mix helps the company to spread awareness of their products to generate revenue through customer satisfaction. Starbucks sell their products in all over the world in many populated countries. The promotional strategies of the Starbucks follows some of the best practices such as
- Word-of-mouth marketing
- Advertising
- Sales promotions
- Public relations
The word of mouth marketing helps the company to provide best customer experience through encouragement of people in promoting business. Starbucks also developed their promotional methods into television, print media and online marketing.
Starbucks Digital Marketing Strategy
Starbucks gives much importance to online marketing and advertising practices. Thus, Starbucks digital marketing strategy creates the opportunity to deliver the products of the customer’s choice and raising their brand awareness through campaigns, merchandising and more.
- Social Media Marketing :
Starbucks has been promoting their brands and products through social media platforms like twitter, Facebook, YouTube and instagram. In order to drive promotional strategies online for the customers, the company keeps updating their content through posts like photos, videos and more. Through using their demographic data to target particular audience, starbucks has been focusing on paid social media campaigns. Thus, creative content can help them drive brand recognition and brand equity.
Starbucks unconventional marketing strategies have social media techniques of establishing consumer connection. Creating real customer value. Near no or less use of traditional methods for marketing (till some years ago; now it is using a mixed strategy). Good quality products and customer service – higher word of mouth marketing.
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- In store marketing : For customer retention, starbucks focuses on in store marketing strategies. The brand began as free provider of WIFI in all of their stores in 2002, which creates influence on consumers to stay longer in the stores even after the purchase which eventually helps to attract more customers and create better connections among the potential customers.
- Mobile App marketing: The organization has first released their loyalty programs in 2008 which now turned into Starbucks Rewards. Starbucks has created their mobile application 2009 just after the launch of loyalty programs. The app helps the company to optimise their customer base and enhance customer’s experience with their product delivery. Also allows the company to track the loyalty points and gifts of the Starbucks Rewards members.
Starbucks Marketing Strategy 2020
In the Starbucks 2020 marketing strategy, the company is now focusing more on the customer satisfaction through quality products to stand out from the competitors. The major objectives of Starbuck’s overall marketing strategy are listed under below:
- Premium quality of Tea and coffee to differentiate the company based on the quality.
- Advanced customer service
- Customer Orientation
- Enhanced brand experience consistently
- Using unconventional methods for marketing and branding
- Creating an image of an ethical and reliable band
- Merchandising their brand
- Focusing on the high brand equity
- High word of mouth marketing through excellent quality products and services
Thus, this Starbucks global marketing strategy shows that company focusing on developing, promoting and creating high brand value for their potential customers in all over the world.
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