Starbucks Success in the US - Research Paper Example

?STARBUCKS SUCCESS IN UNITED S Starbucks is one of the leading companies in the world today. Due to such extensive growth in the local and international market, Starbucks is admired by many companies and variety of customers across the globe. From just a single coffee shop in Seattle, Starbucks achieved the success it once desired and has become the leader in the coffee industry around the globe. Today, Starbucks Corporation is one the largest coffeehouse companies in the world with 19,555 stores in 58 countries (Gertner). Grabbing a cup of coffee in the morning and in the evening has become an essential part of millions of people in United States. Starbucks’ ability to meet the desires and the needs of millions of customers for caffeine has allowed it to expand aggressively within United States (Misonzhnik). Although, there are several other coffee shops that could provide the customers with coffee but not every single coffee house in United States is equal. The industry’s king of coffee, Starbucks, has consistently managed to succeed in United States by continually thinking out of the box whereas; other coffeehouses are just following the footsteps of Starbucks. The ability of the company to think outside the box has been the company’s recipe for success for more than decades. The quality of coffee provided to the consumers in United States is unquestionably the best. This is the major reason that the consumers spend $7 for just a cup of coffee offered by Starbucks (Ostdick) Unlike other coffeehouses, Starbucks does not spend heavily on its advertisement but rather focuses on providing the customers with outstanding services due to which the customers tend to prolong their stay at Starbucks’ coffeehouses. The continuous innovation and improvements in the coffeehouse’s interior design and infrastructure has provided Starbucks with an opportunity to grab consumer’s attention in a highly cluttered and competitive industry. Thinking out of the box to design and restructure the interior of the coffeehouse has never been easy for Starbucks but making it possible is the specialty of Starbucks. In addition, the brand image of Starbucks highly revolves around the restructuring and design of the coffeehouses. The history of Starbucks in United States is quite impressive due to which the company has been considered by many organizations as a model business. In simpler words, Starbucks has become an icon for many companies. The marketing strategies undertaken by Starbucks are not one of those that are commonly observed in today’s business environment. It is quite rare to find Starbucks on billboards, posters, ad space or newspaper as most of the well established competitors such as McDonalds had already been taken into consideration. Starbucks highly believes in setting itself apart from the rest of the coffeehouses in terms of advertisement. In order to do so, Starbucks became the pioneer coffeehouse that went for unconventional marketing strategies to attract and grab consumer’s attention. To promote the products and services offered by the company, Starbucks considered word-of-mouth along with viral social media strategies through which the company was provided with an opportunity to perfectly portray what the company exactly wanted. By doing so, the company not only gain the trust of the consumers but was able to change their perception regarding the unique coffee offered by Starbucks (Sose Marketing). The marketing strategy undertaken by Starbucks has several points that indicate the success of Starbucks in United States. Some of most prominent learning points are as follows; Starbucks has always remained consistent in terms of quality. Although, the price of the coffee offered to the consumers is slightly higher priced as compared to others but the quality aspect significantly cover this dimension. The quality coffee offered to the consumers not only satisfies the consumers effectively but provides them with an experience of rich, delicious taste and aroma. The marketing strategy of Starbucks has always focused on providing the consumers with a “third place” between the work and home. To attract the customers, Starbucks has focused on providing a unique and relaxing environment which eventually is attached to the concept that the company wants to portray. Customer satisfaction is quite important for any business but the true importance has been consistently acknowledged by Starbucks. Starbucks tend to provide its consumers with unique and outstanding experience from the entrance to the last drop of their coffees. Without any doubt, Starbucks has focused on enhancing and maintaining utmost customer service around the globe (Gertner). Social media has provided the organization to create a community around Starbucks. The company frequently provides the customers to share their experience over social media websites such as Facebook, Twitter and their blogs. This has attracted variety of customers towards the brand as none other organization has been able to attract millions of people in the morning and in evening (Sose Marketing). Throughout the years, Starbucks has tended to remain ahead of the competitors through creative and innovative ideas. By doing so, Starbucks not only added value to the products but also motivated the customers to remain loyal to Starbucks. To further attract the customers, Starbucks has added different flavors to their coffee while increasing the products on the food menu. In addition, Starbucks was the pioneer in introducing Wi-Fi – internet capability within their stores. Although, Starbucks has numerous capabilities but the prominent ones that has allowed the organization to enhance its success in United States includes its market leadership, superior real estate locations and their supply chain operations. Being the market leader with the highest number of market shares, Starbucks gained the capability to set trends within the industry. Having the first mover advantage, Starbucks was provided with several benefits which included fame, prestige, respect, loyalty and increasing customer based. One of the prominent examples of such trend includes drinks such as Frappuccino. In addition, Starbucks highly focuses on its corporate social and environmental responsibility as well as the selection of relevant and convenient store locations. The retail store location of the company has given the company superiority over competitors in the industry (Hennessey). The Starbucks retail stores are exposed to high customer traffic areas due to which attracting the customers is quite easy for the company. The local demographic composition of the company has also played an essential role in the success of the company. The better local demographic composition has allowed Starbucks to motive and encourage the customers to have a cup of coffee in a relaxing and experiencing atmosphere. The company focused on setting up coffeehouses in every nook and corner of United States that was eventually aimed to reduce the long waiting lines of customers outside the coffeehouses. This eventually provided the company with an opportunity to meet the needs and demands of the customers effectively and efficiently. In addition, the strongest capabilities of Starbucks are in its supply chain operations. The transportation costs of coffee beans from one destination to another are the best in the industry due to which Starbucks has the ability to protect the integrity of coffee beans so that the customers could be provided with fresh coffee 24/7 (Hennessey). More importantly, Starbucks is listed on NASDAQ which provided the organization to establish its brand image and to gain fame in United States. Before Starbucks was listed, the company was only known in West Coast. To become the leader of the coffee industry and to be well recognized in United States, the company got listed which brought huge media attention. Moreover, the listing on NASDAQ provided the company to set its pace in the industry. The price kept increasing day by day which eventually made Starbucks the center of media attention. The success of Starbucks in United States was also dependent highly on the loyalty program initiated by the company. With this loyalty program at work, millions of people were attracted that consumed coffee daily. The Starbucks famous loyalty program ‘My Starbucks Rewards’ was introduced to reward the daily coffee consumer in United States. The free Starbucks loyalty program has eventually provided the company with loyal customers that tend to frequently visit the store for coffee. As the cash is loaded on the card, it makes the customers feel that the drinks are free when the credit on the cards is redeemed. Moreover, with every purchase of coffee the customer is rewarded with a star. This means that the more the customers purchase coffee, the higher the stars they earn. The loyalty program has been made quite interesting by Starbucks (Chen). The new loyalty program has Green and Gold level. The introduction of the level system has provided the company with an ability to attract millions of coffee consumers in United States. This eventually has resulted in the success of the loyalty program along with the success of the company. Additionally, the mobile reward application has also provided the organization with several opportunities to enhance its success in the United States. With over millions of users having access to such loyalty reward program, Starbucks has given the users with an opportunity to pay for their order through their mobile phones. This mobile loyalty program gives the customers with access to information in real-time and provides relevant information to the customers regarding the location of the stores (Chen). Some of the factors, other than the quality, that has allowed Starbucks to succeed in the United States include; a place for everyone, ambiance and consistently convenient. Despite of quality coffee, Starbucks offers its customers with variety of food items along with plenty of coffee-free beverages which eventually makes the Starbucks’ stores friendlier to children and snack seekers (Gertner). With Starbucks variety of food offering on the menu card, it has been regarded as the most preferred store in United States. In addition, the ambiance of the store makes the store looks entertaining as every little object or furniture placed in the store quite carefully. The ambiance of the stores in Los Angeles is quite different from that of Tokyo which makes the Starbucks’ stores more interesting. Everything about the interior of Starbucks screams comfort and experience due to which tens and thousands of customers prioritize Starbucks over McDonalds and other competitors. Starbucks has remained consistently reliable in winning over the customers’ taste buds and loyalty. Although, people often complains about the high prices charged by Starbucks but providing the customers with superior design, free wifi, a public environment free on tension and most importantly a decent cup of coffee. With the passage of time, Starbucks has become an American cultural icon that has continually witnessed success in United States along with the rest of the world. Some of the identified reasons for Starbucks success are; Employee’s Approach The employees at Starbucks are considered as business partners rather than commodities within United States. Starbucks has invested and created a unique relationship with the staff members along with other key employees. By doing so, the company has identified that the primary target of the company would be to satisfy the needs and desires of the employees and then the customers. Core Competence and Vision Starbucks has always tried to create a sense of belonging which eventually leads to establishment of trust and confidence in what the company stands for. The prominent reason that the customers frequently visit the coffeehouses is the quality of coffee along with the consistent experience which comes to life because of the motivated and confident employees. Promotional Patience The company has consistently aimed to think-out-of-the-box due to which Starbucks has shunned the traditional marketing strategies. The Starbucks cafe rely heavily on marketing themselves as the advertisement budget of Starbucks has remained nearly zero. This has allowed the organization to effectively position itself in the mind of consumers by creates an outstanding experience. Command of a Premium Brand Being a premium brand, Starbucks charges premium price from its customers but also provide them with social statement at the same time. Purchasing a cup of coffee from Starbucks eventually indicates that the consumer is also purchasing an experience, lifestyle and attitude that none other could provide. Financial Resources Being the market leader, Starbucks has been provided with great financial reach as compared to the competitors. With such high financial resources, Starbucks has continually been provided with an ability to take optimum advantage of the opportunities along with investment and expansion activities (Misonzhnik) Promoting Ethics The strategic and the top level of the management have considerably ensured that Starbucks focuses highly on equality and fairness in all of the business dealings. In order to do so, Starbucks has remained consistent in charity events and corporate social responsibility. Although, Starbucks had to face some serious issues during the creation if unique brand image and in the attraction of customers towards the products and services but in the end, the company prospered and achieved the success it once aimed for. Starbucks has still retained its worldwide position; the most successful globalized company that has eventually created strong brand and outstanding experience. Works Cited Chen, Zhiwu. Starbucks' road to success. Global Times. May. 2009. 18 Jul. 2013. Gertner, Jon. For Infusing A Steady Stream Of New Ideas To Revive Its Business. Fast Company. 2013. 18 Jul. 2013. Hennessey, Rachel. 3 Reasons Why Starbucks Still Shines, Despite Market Shortcomings. Forbes. Jun. 2012. 18 Jul. 2013. < http://www.forbes.com/sites/rachelhennessey/2012/08/06/3-reasons-why-starbucks-still-shines-despite-market-shortcomings/> Misonzhnik, Elaine. Starbucks Plans Massive U.S. Expansion. Can Its Growth Plan Succeed?. National Real Estate Investor. Dec. 2012. 18 Jul. 2013. Ostdick, John. Rekindling the Heart & Soul of Starbucks. Success. 2012. 18 Jul. 2013. Simmons, John. Starbucks. Brand Channel. Nov. 2005. 18 Jul. 2013. Sose Marketing. Starbucks Success Is It’s Word Of Mouth/Social Media/Viral Marketing Strategy. Mar. 2009. 18 Jul. 2013. Read More