Starbucks Marketing Mix

Introduction

Jerry Baldwin, Zeff Siegl, and Gordon Bowker formed Starbucks in Seattle, Washington in 1971. Its origin is said to be inspired by another coffee lover and store Owner; Alfred Peet. Starbucks actually began by purchasing coffee from Peets, but eventually began buying directly from growers. Would you like to take a lesson on the marketing mix?

Current CEO Howard Schultz joined the company in 1982 and began pressing to have Starbucks provide coffee, espresso drinks as well as sell coffee beans in its stores. Schultz left to start his own store called Il Giornale. This operation experienced success with Schultz suggested offerings. Eventually Starbucks was sold to Il Giornale which then rebranded itself as Starbucks. By the time the firm went public in 1987 it had expended to more than 160 outlets.

Today Starbucks is in more than 55 countries and boasts annual revenues in excess of $7 million dollars for its U.S. operations, as well as 1.9 million from its international operations.

Product

  • Starbucks specializes in coffee and related beverages. The company sells coffee, Italian-style espresso beverages, cold blended beverages, as well as a selection of premium teas. In addition, the firm also sells coffee-related accessories and equipment.
  • Tazo Tea is the Starbucks brand. There’s many, many different flavors and you can get them as iced teas, lemonades, lattes, hot or cold.
  • Some of their most popular teas fall into the Chai tea category. It’s a spicy black tea with cardamom, cinnamon, black pepper and star anise.
  • An espresso is a strong, black coffee that is brewed by forcing hot water through coffee grounds. It’s more concentrated, has more caffeine than regular
  • A Starbucks Latte is Espresso with steamed milk and foam.
  • A Caramel Macchiatto is a vanilla latte with less vanilla, extra foam and a caramel sauce on top.
  • A Starbucks Cappuccino is similar to a latte but with more foam.
  • Starbucks Mocha is an espresso, steamed milk and chocolate with whipped cream on top.
  • A Starbucks Coffee Frappuccino is Starbucks coffee, milk and blended with ice.
  • An example of Starbucks blended creams is the pumpkin spice frappuccino which includes pumpkin and traditional fall spices, mixed with milk and blended with ice, then topped with whipped cream and pumpkin spices.

Price

  • On September 22, 2010 Starbucks announced that it would be raising prices due to the increasing price of coffee beans, dairy and other raw material.
  • Starbucks expects to maintain or lower the price of some of its most popular beverages, including certain espresso beverages; and, in most markets, its popular $1.50 tall brewed coffee; and to raise prices of labor-intensive and larger-sized beverages
  • Unlike the coffee, tea prices aren’t based on the size, instead it’s based on the number of tea bags, since water is pretty cheap in non-bottle form.

Place

  • The Coffee Holding Company, Inc. is located at 3475 Victory Blvd, Staten Island, in Staten Island, New York.
  • Starbucks Coffee Canada is located in Toronto, Ontario
  • Starbucks Capital Asset Leasing Company is located in Delaware.
  • Starbucks has branches in Argentina, Australia, Chile, Singapore, Japan and the UK.
  • Starbucks coffees and teas were available in approximately 39,000 grocery and warehouse club stores, 33,000 of which were in the US and 5,500 in international markets.
  • The CPG segment includes packaged coffee and tea as well as branded products sold worldwide through channels such as, warehouse clubs, convenience stores and grocery stores.

Promotion

  • Starbucks started a community website, My Starbucks Idea, designed to collect suggestions and feedback from customers.
  • My Starbucks reward program allows members to earn a free drink after every 15 purchases at participating Starbucks stores.
  • It’s rare (if not none) for you to find a Starbucks ad in a billboard, ad space, newspaper or poster in places where you can expect to see advertisements for most other establishments, such as McDonalds?
  • Starbucks stresses quality above price and other features it could emphasize.
  • The company has went to great lengths to create a “community atmosphere” among premium coffee lovers.
  • In 2001 Starbucks introduced the Starbucks Card, a stored-value card for customers to use and reload.

Process

  • Starbucks operates primarily through joint ventures and licensing arrangements with consumer products business partners.
  • The Starbuck Company’s International specialty operations are comprised of retail store licensing operations in more than 40 countries and foodservice accounts in Canada and the UK.
  • The company’s US specialty operations include licensed retail stores, food service accounts and other projects related to Starbucks’s main business strategy.
  • Starbucks accepts store license applications online, with the initial information centering on the type of operation being run by the applicant.
  • Starbucks started a community website, My Starbucks Idea, designed to collect suggestions and feedback from customers.

Physical Evidence

  • Starbucks provides information on its products, business partnerships, and career opportunities on its website .
  • The famous Starbucks Logo (which is green and features a partially nude siren) has stayed largely unchanged since its origin, However it has been altered to adjust to international sensibilities.
  • Starbucks stopped using pre-ground beans in its stores in order that the grinding of whole bean coffee will "bring aroma, romance and theater" to American stores.

People

  • Howard Schultz is Chairman, Chief Executive Officer for Starbucks.
  • Olden Lee Interim Vice President
  • Barbara Bass Director, Non Executive Board
  • Cliff Burrows is President of Starbucks Coffee US
  • Author Rubenfeld, Global Development
  • Troy Alstead is Chief Financial Officer
  • John Culver is President of Global Consumer Products

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