Published by MBA Skool Team, Last Updated: July 25, 2021
Marketing Strategy of Starbucks analyses the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like product innovation, pricing approach, promotion planning etc. These business strategies, based on Starbucks marketing mix, help the brand succeed in the market.
Starbucks marketing strategy helps the brand/company to position itself competitively in the market and achieve its business goals & objectives.
Let us start the Starbucks Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:
The product strategy and mix in Starbucks marketing strategy can be explained as follows:
Starbucks is the leading coffee chain brand globally. Starbucks provides an unbeatable and unmatchable experience for the various products it offers. Although Starbucks’ speciality is coffee, it has entered various other product categories in its marketing mix to attract all kinds of customers. Starbucks outlets serve whole-bean coffee, hot and cold drinks, microground instant coffee known as VIA, whole-bean coffee, caffe latte, La Boulange pastries, espresso, full- and loose-leaf teas which includes Teavana tea products, Frappuccino beverages, Evolution Fresh juices and snacks such as chips and crackers; seasonal or specific to store locality products like Pumpkin Spice Latte. Many Starbucks stores sell hot and cold sandwiches, pre-packaged food items and drinkware like tumblers and mugs; some "Starbucks Evenings" outlets offer wine, beer, appetizers. Starbucks-brand ice cream, coffee and seal bottled cold coffee drinks are sold at selected grocery stores as well. The coffees are categorized on the basis of:
Format – Whole bean and VIA
Roast – Blonde, medium, dark
Caffeine – Regular, decaf
Flavoured and unflavoured
Starbucks Price/Pricing Strategy:
Below is the pricing strategy in Starbucks marketing strategy:
Starbucks is clearly a premium priced coffee seller.
The price is justified due to its high end technology and the varieties it offer along with the best customer experience. To maintain competition, Starbucks started with a low cost range at few outlets and to cater the customers who couldn’t be attracted by its high prices. The packaged products are also available at grocery stores which are comparatively cheaper than the normal outlet products and easily available to everyone. This proves that Starbucks not only follows competitive pricing in its marketing mix but also relative pricing strategies. The drinks at Starbucks are also available in various sizes as per the need and requirement of every customer with minute variations like demi, short, mini, tall, grande, venti and trenta. The quality is always the highest, which helps in maintaining a loyal customer base and brand name. The price is generally high because the focus is not only to provide high quality coffee, but its the ambience & experience which is of high value.
Following is the distribution strategy in the Starbucks marketing mix:
Starbucks is present more than 70 countries in Africa, North America, Oceania, South America, Asia and Europe. Starbucks had approx. 5000 licensed locations. Maximum outlets are available in USA. Starbucks have a well-designed website which contains information on each and every aspect of coffee making, coffee varieties available, sourcing options – quality and farmer support, find your own perfect coffee, flavour details, about espresso – ingredients, best equipment and makers, brew coffee – how to, coffee press, pour over, iced pour over and coffee brewer. The complete Starbucks menu, store options, locations, speciality stores, customer perks and benefits, etc are all available on the website itself.
With the growth on ecommerce & online deliveries, the brand has managed to increase its reach & sales.
Starbucks Promotion & Advertising Strategy:
The promotional and advertising strategy in the Starbucks marketing strategy is as follows:
Starbucks is a top of the mind brand through various activities and initiatives. Starbucks focuses on brand promotion in its marketing mix through channels like online, TV, print ads etc. Even though Starbucks has a wide range of customer network, it never falls back from its responsibility towards its customers, benefits offered for the price they pay and giving back to the society. Through its community programs for local communities, Swastha – healthy program and Chai project, ethical sourcing options providing benefits to farmers, coffee, tea and cocoa sourcing areas, environment friendly techniques – using recyclable cups, green building, etc. it clearly displays the responsibilities and actions taken by the company. Apart from this Starbucks has made use the best use of technology for promotions like the “tweet-a-coffee” campaign in 2013, feedback system through “My Starbucks Idea”, loyalty program and gift cards with free wifi, zero charges for selected coffee and milk options, etc., farmer euity practices to inform them the right whole seller prices, Starbucks prepaid cards, mobile apps, content series “Upstanders” for podcasts, story-telling, etc., table top power mats for charging, bar codes for cashless payments, etc. Increases customer’s interest and attracts them more.
Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of Starbucks.
Starbucks is a customer centric company and provides the best services and ambience to create the most beautiful memories for any individual. The sophisticated ambience and setup maintained throughout its stores anywhere in the world helps the coffee shop to stand above other competitors. Starbucks also writes the names of every individual differently on the coffee cups, which are intentionally spelled wrong in few outlets. Starbucks also has a lot of focus towards its employees, which are more than 200,000 across the world.
Starbucks provides loyalty cards to its employees which are upgraded from time to time and it helps in attracting the customers more and more. The supply chain from procurement of coffee beans, to the delivery of coffee and other products in any store of Starbucks is well managed and uses the highest technology to maintain the premium standards.
Starbucks stores, ambience, coffee mugs/glasses with the logo printed, paper napkins etc all come under the physical evidence of the brand. There were reports of many unbranded stores which were inspired by Starbucks but later on either changed their names or took over Starbucks itself. Post the pandemic, the outlets are focusing on being completely compliant to guidelines and ensuring safety of their customers. Starbucks also offers automated kiosks and machines in few locations where 280 combinations of coffees are available. Hence, this concludes the Starbucks marketing mix.
Starbucks is a prime coffee shop chain located in different parts of the world. Starbucks has approx. 24500 with major outlets in USA, China, Canada, Japan, and South Korea. Starbucks is mainly famous for its dark roasted coffee accompanied by taste, customer experience and quality, and they are popularized as “second wave coffee” representatives. It was established in 1971 in Elliot Bay, Seattle, Washington, US by Jerry Baldwin, Zav Siegl and Gordon Bowker. Starbucks is specially known for its coffee beverages, smoothies, tea, baked goods and sandwiches. In 2015, it generated a revenue of US$19.16 billion, operating income of US$3.6 billion, net income of US$2.76 billion, total assets worth US$ 12.45 billion and total equity worth US$ 5.82 billion.
Starbucks employs over 2,30,000 employees. The subsidiaries of Starbucks are Torrefazione Italia, Teavana, Tazo, Seattle’s Best Coffee, La Boulange Bakery, Hear Music, Evolution Fresh, Ethos Water and Starbucks Coffee Company.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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