Mukt Shabd Journal ISSN NO : 2347-3150
A CASE STUDY ON STARBUCKS MARKETING STRATEGIES
Miss. Riya Agrawal
Student MBA 2nd Year (Marketing)
SSR IMR, Silvassa – Permanently Affiliated to SPPU, Pune
CASE STUDY:
EXECUTIVE SUMMARY:
The Starbucks has revolutionized the coffee business and being the world leader in the
premium coffee market it has an amazing success story. Starbucks sells not only its coffee; it
sells the “Starbucks’ experience”. The company is successful to convey its vision to the
customers. It can convince customers paying more for high-quality products and a new life
style. Starbucks reached its goal to establish and leverage its powerhouse premium brand
through rapid expansion of retail operations, introduction of new products and store
concepts, as well as development of new distribution channels. The company could increase
the market share in existing markets and open stores in new markets rapidly. Additionally,
Starbucks always tries to expand its products portfolio. The company cooperates and takes
alliances with other companies to develop and distribute new products. As the result,
Starbucks has developed from a local coffee bean roaster and retailer in the US to a
multinational coffee and coffeehouse chain with more than 14,000 stores in 42 countries. So
they take into consideration the efforts of time, money, and resources, pushing innovation,
and doing things necessary to differentiate Starbucks from all other competitors as it play key
role for business success in the future. While starting from their products itself (coffee bean,
tea, cocoa), they’re passionate to find the finest sources, finest process of products with
improving the quality of life of the farmers. With the feeling of partners, all employees are
treated with respect and pride, also the engagement with customers and sense of human
connections by the friendly and warming stores’ ambience to earn their royalty and trust,
responsibilities and contribution to communities and social, and one of the important
missions is environmental friendly these make them “Starbuck” as a leader for changes and
new standards. The evolving skeptism of starbucks marketing strategies reflects the dilemmas
that does the brand attributes of Starbucks make it differentiated from other brands and the
growth opportunities for Starbucks in emerging markets by virtue of its international
marketing strategies prove to be successful?
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This Teaching case is essentially derived to cater the need of discussion among the Industrial
domain, professionals and students of higher education. The case is open for discussion and
has the potential to derive conclusion on true perspective of starbucks marketing strategies
and resolution to the dilemma.
STARBUCKS:
Starbucks Coffee Company was established in 1971, Seattle, Washington as it has grown to
be the leading retailer roaster brand on specialty coffees in the world with 15,000 retail
outlets across the world. The United States is the largest market for Starbucks coffee. It
generates the largest part of Starbucks’ revenue and the highest number of Starbucks retail
stores are also located in the U.S. Starbucks history is unique and can be traced back to a
tradition, which means that the coffee served in a coffee shop is a result of an intrinsic
knowledge that started in the early stages and it’s spread all over the company. Besides,
Starbucks was able to produce quality coffee and, over the years, enhanced its process and
made it scalable worldwide. Further, a mix of chance, changes in cultural behavior of coffee
consumption allowed the company to grow exponentially. Its common goal is to provide its
customers with the finest product and customer experience whilst combining this with their
business principles of which involve them incorporating social, environmental and economic
responsibilities and benefits in the communities in which they do business. They have sought
throughout their history to achieve this goal through a number of intrinsic principles which
incorporate respect, dignity, diversity, excellence, enthusiasm and desire to create an
environment, a product and an unparalled customer experience. As been world’s leading
speciality coffee retailer, producing and selling a wide variety of beverages, as well as
pastries and confections, through some 8,400 coffee shops throughout 30 countries around
the world. Starbucks also sells its beans to airlines, restaurants, businesses and hotels;
manufactures coffee-related equipment and accessories, and produces a line of premium teas
and a line of compact discs through its mainly company-operated retail stores. Further, the
development of Starbucks retail outlets have emerged to provide a comfortable and luxurious
setting with a host of features including Wi-Fi wireless connection, the promotion of
exclusive record deals and also its own corporate branding through trademarked coffee bean
sales and company logo branded merchandise. The Starbucks Quality coffee production
depends on different factors, from growing the brewing, such as the variety, the region where
it’s grown, how it’s roasted, grounded and packed, and blended and served. Starbucks covers
every single step from this value chain. Starbucks controls the quality from the coffee beans
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at the farmer level, how they dry the coffee and the logistics until it gets to the coffee shops.
It also guarantees that almost 100% percent of the coffee is ethics-sourced. Starbucks has
technological resources to ensure that the roaster machines will roast the coffee precisely as
required. It has the know-how to repeatedly produce and serve the best coffee. Besides, it
enjoys a product reputation and brand loyalty in its relationship with the consumers.
Even, Starbucks ensures that its human-capital resources are well-trained and well-paid,
rewarded and have the chance to grow within the company. As comparing the turnover rate
of baristas from Starbucks to its competitors.
STARBUCKS MARKETING STRATEGY
Starbucks is employing varied marketing strategies such as customer relationship
management, creating a good customer experience integrated marketing communication, and
social media marketing. Starbucks has laid up its brand in the world market as a proper
quality client experience brand. Starbucks gets to sell its high quality products as well as
services at premium rates. It is the high quality of the goods and the magnificent customer
experience that gives a clear cut difference from the Starbuck’s brand and any other coffee
brand in the market. Starbuck’s has come up with designs in their stores that have Italian
themes for bars and gives the customers a home like experience whenever they visit the
stores. The Starbuck’s customers are loyal to the brand and Starbuck’s pays them back by
giving them the very first priority to the customer’s satisfaction so as to come up with a loyal
customer base of the Starbuck’s brand.
Starbuck’s has aggressive strategies that aim at sustaining their position as the market number
one due to the intense competitive rivalry that is eminent in the service industry. Starbucks
relies on branding and that elaborates why they changed the logo into one that is more
focused and climaxes the sustainability of Starbuck’s company policies. Starbucks has come
up with a strategy of brand differentiation strategy via the uniqueness of their products as
well as product differentiation so as to promote their products. Starbucks uses innovation in
the products that it produces and the services so as to gain a competitive advantage over its
rivals in the market. The Starbucks brand has positioned itself as the number one coffee brand
in the market as it provides an attractive store design, elegant taste, a unique environment and
a high quality of the coffee beans. Starbucks have, over the years, launched a variety of
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products as they attempt to promote their already existing products by employing new
campaigns and ideas. Starbucks has CRM campaigns as one of the main success strategies
that they have that promotes their marketing. Starbucks had a strategy where it did a research
on the customers and found the birth dates of the clients. Starbucks then came up with a
database where the birth dates of the customers were kept and used to later give extra benefits
on the birthdays of the customers. The Starbucks marketing campaign have given its clients
the chance to brag on social media about the surprise gift coupons they receive from
Starbucks on their birthdays. The main target market for the Starbucks are the clients who are
ranging from the professionals, tourist and business people to college students and university
students. Starbucks has managed to maintain its number one position in the market by
customizing its products and services as per the cultures and the tastes that are found in the
various regions and countries where their particular stores are located. Owing to this,
Starbucks has been able to open more coffee shops in several countries and regions as it
introduces its services and products to their international market. Starbucks has a competitive
advantage concerning distribution strategies that include approaching customers when they
are at shops, dining, at work or travelling by coming up with some strong distribution
networks. Starbucks has the best in class manufacturing process of the fruit juices that it
produces as well as the beverages using the high pressure pasteurization (HHP) process so as
to preserve the nutrients of the juices that it produces. Even Starbucks has been
merchandising their products as lot of us are fascinated with cups with the Starbucks logo on
it. These products are always placed back end of Starbucks when you heading towards
counter so that your eye goes first on them. Starbucks long term goal has been to create an
ethical brand, since in last few years they’ve spent more than $400m on the advertisement
itself. Starbucks also believes in reusable cups and straws which benefits the environment and
welfare of society. The success of the Social Media Strategy by Starbucks has enabled it map
its strategies in attempts to meet their objectives, their branding strategies as well as
integration across the media channels and constant follow-up system to keep track of their
social media behaviors and success as they have 3.6 million followers on their Twitter
platform as they regularly post their CSR activities on their Twitter account, 34 million
Facebook followers and 6.6 million YouTube views. Even, Starbucks used to write your
names on your coffee cup. But it’s usually misspelled. Well, this a marketing technique used
by Starbucks. What’s common with all these mugs a misspelled name and green siren.
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CASE CONCLUSION:
Starbucks has used innovation in its products and services in order to gain competitive
advantage in the market. The Starbucks has positioned itself best coffee brand in the market
by providing attractive store design, unique environment, elegant taste and high quality
coffee beans. Starbucks has adopted a brand differentiation strategy through product
uniqueness and product differentiation in order to promote its products. Starbucks has used
aggressive strategies to sustain its position as a market leader due to intense competitive
rivalry in the service industry. Starbucks has adopted branding strategy due to which it
changed the logo that is more focused and highlights the sustainability of company policies.
Marketing mix is widely used by organizations to understand the needs of customers which
enable organizations to provide level of products and services as per expectations. In order to
achieve success in the marketing campaigns, organizations need to understand their target
market and their expected levels of products or services. Thus, Starbucks is using different
marketing strategies like customer relationship management, integrated marketing
communication, creating a good customer experience and social media marketing. Businesses
also face certain challenges regarding the marketing strategies to be followed in the
environment. Hence, the dilemma crops up which become the broad aspect to be discussed
upon - Does the brand attributes of Starbucks make it differentiated from other brands? Or
Do the growth opportunities for Starbucks in emerging markets by virtue of its international
marketing strategies prove to be successful?
TEACHING NOTES FOR THE CASE:
TEACHING OBJECTIVES:
The following Teaching Objectives may be considered with respect to the case:
1. To analyze cultural attributes of Starbucks brand and uniqueness from other brands.
2. To understand the essence of marketing strategies of Starbucks Brand.
3. To present the readers an opportunity to deliberate upon the essentials of Starbucks
Brand.
LEVEL OF ANALYSIS:
The present case is a type of teaching case with focus on illustrative case approach. The
analysis attracts understanding on the starbucks brand. This case is suitable for the practical
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& case study approach at the level of Management Students. To be specific BBA Final Year
students & MBA Students shall have a deserving benefit out of this General Management
case. Executive MBA Students & start-ups in respective Industry may also get benefitted.
Industry at large will be a party to the benefits of the learning from the case.
CASE ASSIGNMENTS:
As part of the case study delivery, participants may be assigned certain tasks pre & post
delivery of the case.
Pre-discussion Task: Gather fair understanding on the marketing strategies of
starbucks & related products through journals & books in
Library and through E-sources.
Post discussion Task: Conduct review of further literature & cases pertaining to the
theme of the case. Post discussion schedule shall also include
dicussion round on a few questions peratining to the case.
BROAD DISCUSSION QUESTIONS:
1. What main internal features/ strengths (sets of activities or resources/capabilities) is
Starbucks’ competitive advantage built on?
2. What should Starbucks do to continue growing its revenues and earnings?
3. What barriers to imitation (or replication) exist that will ensure that Starbucks’
competitive advantage will be sustained in the long run?
READING REFERENCES:
The following references may be helpful in gaining further insights on the theme of the case:
Haskova .k, (Nov. 2015), Starbucks Marketing Analysis, CRIS Bulletin of the center research
and Interdisciplinary Study.
The Secret to Starbucks’ Brand Success, (July 2017), www.martinroll.com accessed on
12/04/2020
POTENTIAL BENEFITS OF THE CASE:
Students of Management Education:
• Case Study exposure on Starbucks Marketing Strategies aspects. Students shall
gather learning on the marketing strategy adopted by starbucks in light of the
theme of the study.
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• The case will be helpful in General Management Subjects and overall shall
support in gaining better marketing aspects.
• The case shall assist in learning the fundamentals of Starbucks Marketing
Strategies.
Executive of Companies:
• The case being a general management topic, this will support the management in
augmenting the marketing strategies at the organizations in various aspects, which
eventually shall benefit the Organizations.
Startups in respective Industry:
• The new companies stepping in the business will find this case as a good example
of allied functions along with marketing the core activities of businesses.
• They will inculcate the value of developing businesses and giving back to the
society.
Bibliography:
www.marketing91.com accessed on 12/04/2020
www.ukessays.com accessed on 12/04/2020
www.osiaffiliate.com accessed on 13/04/2020
www.bohatala.com accessed on 13/04/2020
www.coschedule.com accessed on 14/04/2020
www.dgajsek.com accessed on 14/04/2020
www.notesmatic.com accessed on 14/04/2020
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