Download Introduction Starbucks Coffee Company is headquartered in Seattle

Introduction
Starbucks Coffee Company is headquartered in Seattle, Washington. At the
beginning, it is just a small shop at Seattle. Now Starbucks has become the
leading brand worldwide. Now it has around 17,000 stores and over 172,000
employees worldwide. It goes without saying that Starbucks is becoming one
of the most famous brands in the world. This paper will mainly focus on the
brand value of Starbucks and analyze why it can achieve huge success
worldwide from different aspects, such as marketing, branding promotion and
so on.
5 P's for Starbucks Coffee Company
Starbucks is not just offer its customers a good cup of fresh coffee, but a
pleasant quality product, great customer service and better understanding of
coffee culture. Starbucks has so far achieved unpredictable achievements in
coffee chain industry. The following session will present some ideas on why
Starbucks can be successful via 5P analysis. Now we will go through the
strategies of 5 P's, price, product, place, promotion and people.
Price:
The Starbucks constantly adjust its coffee price in accordance with its
competitor’s prices. In the meantime, The Starbucks maintain high quality
products with good service and reasonable and competitive price. Thus, it can
retain and keep attracting large number of consumers in the long run.
Product:
It is well known that Starbucks not only sell nice coffee but also sell some
coffee-related products, such as cups, accessories, etc. In addition, its high
quality coffee should be attributed to its great success today. The whole
process of making coffee is high-standard, by saying this I mean Starbucks pay
close attention to the coffee beans selection as well as expertise in roast. It also
purchases and makes coffees which meet the growing needs of specific market
and the customers.
Place:
Place plays an important role in tangibilizing service offerings .Choosing the
appropriate location is also quite important for business success. Starbucks
usually open its stores on busy streets, thus it can reaching large number of
potential consumers and provide better service to its existing customers. It is
important to note that apart from high quality goods as well as reasonable
price, convenient place and pleasant environment also play a significant role
in attracting consumers.
Promotion:
Starbucks make full use of a wide range advertisement channels to promote its
products, service as well as its brand value. It employs TV, radio and internet
to popularize its brand and compete with its rivals in the cut-throat market. As
a matter of fact, we can see Starbucks advertisements everywhere in our daily
life. At the same time, it reaches more and more people by cooperating with
community charities. This will inspire people inside and outside the company
and reinforce the company's value and image. For instance, after September 11,
stores in New York, Washington D.C and Starbucks provides free coffee to
those relief workers.
People
People are a common factor in every service. Good people (means good
performance) make good or successful services. Bad performers deliver bad
services. People who work in Starbucks are required to perform in accordance
with the internal rules and regulations. Meanwhile, Starbucks provide good
treatment in order to motivate their employees and keep them in high spirits
when serving consumers.
Competitor Analysis
The globalization makes the whole market worldwide a highly competitive
place. The global coffee market is a very competitive sector. Competition is
steadily growing against Starbucks each year as the industry grows. Starbucks
is facing the increase of competitions from other. The latest Starbucks’
competitor is Canadian chain Blenz Coffee. Starbucks has managed to achieve
market share and dominance over the years through store growth, retail chain
growth, new products growth and International market growth. However, in
September 2007, the Company experienced a decline in their brand from the
failure of their sit down restaurants and other ventures. (John, 2008).
Competitors look to gain an advantage by cutting price, launching a rival
product, expanding promotional advertisements to increase market share.
According to Kotler et al., (2008), to be successful, a company must provide
greater customer value and satisfaction than its competitors do. However,
right now, there are no coffee companies can compete with Starbucks simply
because it is impossible for them to produce the same quality coffee at a
competitive price.
Starbucks' marketing strategy
For the past few decades, Starbucks has been the most powerful leader in the
market for specialty coffee. Starbucks growth strategy has been one of
aggressive expansion, creating a cluster of stores first in America, before
opening up new stores globally. The American Marketing Association offers
the following definition: Marketing is the process of planning and executing
the conception, pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individual and organizational goals.
Mercer (1996) defines segmentation as a process used by companies to target
a specific group of customers with different needs, wants and characteristics.
For a segment to be viable, it must meet several requirements such as size,
identity, relevance and accessibility. In order to have an effective market
segment, companies must have a target market, tailored marketing mix and
differential marketing strategies. (Jobber, 2001). One of Starbucks' marketing
strategies is distributing its Starbucks outlets to places where potential
consumers can spend some time reading rather than their home or workplace.
In the meantime, Starbucks' pay great attention to its service environment by
using relaxing music and comfortable furniture in their stores. As a result,
Starbucks can better serve its customers.
This was done by making each of its stores as comfortable and relaxing as possible
by using comfortable furniture and relaxing music in their stores. (John, 2008)
Starbucks chose to focus on the geographic, demographics and psychographics of
their customers. It is with the information gathered regarding these segments that
Demographics are concerned with the structure of the population in terms of ages,
lifestyles and economic factors (Blythe, 2008). Starbucks targets connoisseurs, highly
educated relatively affluent, well travelled and technologically savvy with an interest in
arts and other cultural events. In addition, by introducing other non-coffee products,
they aimed to have wider target market i.e. non-coffee drinkers.
Psychographic segmentation involves dividing a market into different groups based
on social class, lifestyle or personality characteristics. (Blythe, 2008) Starbucks
focuses heavily on charity and the arts, and is making significant efforts to be a
socially and environmentally responsible company. To help ensure sustainability and
future supply of high-quality green coffees in Central America and to reinforce the
Company's leadership role in the coffee industry, Starbucks operates the Starbucks
Coffee Agronomy Company, S.R.L, a wholly owned subsidiary located in Costa Rica.
Staffed with agronomists and sustainability experts, this first-of-its-kind Farmer
Support Centre is designed to proactively respond to changes in coffee producing
countries that impact farmers and the supply of green coffee. During fiscal 2008, the
Company expanded this sustainability program to Africa by establishing a Farmer
Support Centre in Rwanda (Starbucks annual report, 2008). Starbucks also actively
participates in AIDS benefits, and for every city that has a store, Starbucks sets up at
least one shelter for the underprivileged children and donates money as well
(Starbucks.com). By participating in various different positive causes and events,
Starbucks gains a lot of favourable exposure and publicity for its brand.
Geographically, Starbucks targets areas located in high-traffic, high-visibility locations,
to serve as a' hub' for the area. It then opens many other outlets stores in the same
area. While the Company selectively locates stores in shopping malls, it focuses on
locations that provide convenient access for both pedestrians and drivers.
It is well known that Starbucks has successfully won the market by using its
brand value as well. According to Blythe (2005), branding is defined as a
process of adding value to the product by use of its packaging, brand name,
promotion and position in the minds of consumers. When a company obtains
its brand and instills its value to the consumers, then it is more likely for
people to purchase their products and services. The Starbucks brand has been
represented as a brand that provides high quality goods as well as pleasant
service to its consumers. In addition, by introducing other non-coffee
products, they aimed to have wider target market i.e. non-coffee drinkers and
improve their brand at the same time,such as a wide variety of other beverages,
both hot and cold, together with snacks and sandwiches. Besides, Starbucks
implemented a well integrated market mix to maximize their brand awareness
and establish themselves as the best coffee brand to the world and target
markets. Nowadays, Starbucks has over 17,000 stores in 49 countries, which
deliver a strong and well known brand image and help it gain competitive
advantage over its competitors worldwide.
In conclusion, Starbucks has achieved a dominant position in the world. By
implementing its unique brand value and provides excellent service worldwide, it
differentiates from other competitors. Starbucks has managed to convince its
customers its products are associated with quality, and as a result, the company has
been able to differentiate itself from competitors. Furthermore, Starbucks can once
maintain its market share and become the well recognised brand for its marketing
stratgies. Only then will the company be able to reposition themselves is a market that
has become saturated and increasingly competitive.
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