Services Marketing Analysis of Starbucks - Case Study Example

The theory used behind marketing a service-based and a product-based business is entirely different from one another. Basically, a service-based marketing assumes that: (1) the buyer who will purchase the service is intangible; (2) the service offered by Starbucks is highly dependent on the reputation of an individual; (3) buyers would find it difficult to compare the quality of service offered to them by a similar company; and (4) it is impossible to return back the services that has been delivered by Starbucks’ personnel.

Since anybody can easily establish their own coffee shop, competition within the coffee industry is very tight. As explained by Porter (1998), competitive advantage is referring to the “search for a favorable competitive position within a particular industry”. (p. 1) Using the four major assumptions we have mentioned earlier, Starbucks management was able to successfully develop a competitive advantage in terms of improving the quality of services the company has been extending to its valued customers.

When marketing for a product, marketers often use the principle of marketing mix which is known as 4P’s: product, place, price, and promotion. (Kotler, 2000, p. 15) On the contrary, marketing for service uses only 3P’s known as physical evidence, people, and process (Vandermerwe & Rada, 1988). Because of the rapid changes and tight competition in the local and global markets, it is said the use of the typical marketing mix alone is no longer sufficient in terms of increasing a company’s competitive edge over its rivals within the same industry.

Marketing mix is actually used as a marketing tool that enables the marketing manager meet their desired marketing objectives such that the manager would consider the following: (1) the quality and features of the product they are selling; (2) whether or not the price of the products is competitive; (3) whether or not the company has been using effective communication channel in promoting the products.