Starbucks Marketing Strategies 2 History Starbucks was founded

Starbucks Marketing Strategies 2

History Ø Starbucks was founded in Seattle, Washington in 1971 by Jerry Baldwin , Gordon Bowker and Zev Siegl. Ø The three partners only sold roasted whole coffee beans and coffee equipments Ø Starbucks as we know today really began to take shape after they sold the company to employee Howard Schultz in 1987 3

History The first Starbucks store was located at 2000 Western Avenue from 1971– 1976 in Seattle. 4

1. Howard D. Schultz (born July 19, 1953) is an American businessman. 2. He is best known as the chairman and CEO of starbucks. 3. He is a former owner of the Seattle Supersonic. 4. In 1998 , Schultz co-founded Maveron, an investment group, with Dan Levitan. 5. In 2012, Forbes magazine ranked Schultz as the 354 th richest person in the United States, with a net worth of $1. 5 billion. Ø Schultz , still the Chairman and CEO of Starbucks in 2014, began the rapid expansion of the coffee chain 5

History Ø The logo is an image of a "twin-tailed mermaid, or siren as she's know n in Greek mythology 1987 -92 1992 -2011 -now Ø The name comes from captain Ahabs first mate in the classic novel Moby dick , who was named starbuck. 6

Starbucks Activity Ø through company-operated stores ü purchase and roast high-quality coffees ü Sell handcrafted coffee , tea and other beverages ü Sell a variety of fresh food items, including snack offerings ü Sell CDs, and provides music downloading at its “Hear Music” Starbucks stores. 7

Starbucks Activity Ø through other channels such as licensed stores, grocery and foodservice accounts ü sell a variety of coffee and tea product ü license their trademarks 8

Marketing Mix Starbucks Coffee’s marketing mix (4 Ps) indicates the importance of this marketing tool as a way of ensuring that the firm promotes the right products at the right prices and places. 9

Marketing Mix Products This component of the marketing mix focuses on what the business offers to customers. the following are the main categories of Starbucks products: ü Coffee ü Tea ü Pastries ü Frappuccino beverages ü Smoothies ü Merchandise (mugs, instant coffee, etc. ) 10

Marketing Mix Products This product mix is a result of years of business innovation. For instance, Starbucks added the Frappuccino(is a trademark for a line of frozen coffee beverages sold by Starbucks) line after it acquired The Coffee Connection in 1994. The company also has an ongoing product innovation process that aims to offer new products to attract and keep more customers. Thus, this part of Starbucks’ marketing mix involves beverages, food, and merchandise 11

Marketing Mix Place ü The company offers most of its products through Starbucks cafés. 12

Marketing Mix Place The company now offers some of its products through the online Starbucks Store. 13

Marketing Mix Place ü The firm now sells some merchandise through retailers. ü The company uses the Starbucks App to allow customers to place their orders. ü Starbucks acquired its rival the Diedrich Coffee chain of cafés in 2006 to enhance its geographical Presence. 14

Marketing Mix place Starbucks App ü Mobile Order & Pay is quickly emerging as the fastest and easiest way for Starbucks customers to conduct their transactions. 15

Marketing Mix place Starbucks App ü 22% of Starbucks’ transactions occur via mobile app. ü More than 7 million transactions a week in North America via app. ü The application has over 12 million active users in North America. ü In 2014, more than $2 billion worth of transaction volume was paid through the 16 Starbucks app.

Total Transaction On Mobile app 17

Marketing Mix Promotions Starbucks promotes its products mainly through advertising. Starbucks’ promotional mix is as follows ü Advertising(television, print media and the Internet) ü Public relations ü Sales promotions (The firm uses sales promotions, such as the Starbucks Card that customers can use to get freebies) ü Social media like Facebook, Twitter, blogs and company's own website is used for creating virtual communities and forums which helps in the management of the customer relationship. 18

Marketing Mix Pricing ü Starbucks uses a premium pricing strategy. ü This pricing strategy takes advantage of the behavioral tendency of people to purchase more expensive products on the basis of the perceived correlation between high price and high value. ü Through this pricing strategy, the company maintains its high-end specialty image. ü Starbucks believes in the brand differentiation strategy with quality and natural taste at premium prices and does not involve itself in price war strategies 19

Market Strategy ü Buying out competitors' leases, intentionally operating at a loss. ü Clustering several locations in a small geographical area saturating the market 20

Countries where starbucks are located there 21

Conclusion ü Industry wide broadness and uniqueness of the products are the elements of differentiation strategy which is used by Starbucks as part of its market strategy. ü Innovation of new product ideas is the heart of company's competitive strategy that puts a company in the position to charge premium prices as compared to its competitors. 22

Conclusion ü Company has implemented strong HR practices to satisfy employees so they act as brand promoters of company and manage effective customer relations. It means that company satisfy its employees so they satisfy company customers that is essence of organizational marketing strategy 23

Revenue of selected leading coffeehouse chains worldwide in 2015 24

Revenue of Starbucks worldwide from 2003 to 2015 (in billion U. S dollars) 25

Brand value in million U. S dollar 26

Coffeehouse chains ranked by number of stores worldwide in 2014 27

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