Starbucks Corporation Marketing Strategy - Case Study Example

Starbucks Corporation Marketing Strategy Starbucks Corporation Marketing Strategy Starbucks Corporation is a coffee house company with its basis in Washington. The company has coffee stores all over the world. The company has gradually experienced growth from the first coffee shop that was started in the year 1971. The company is well known for the quality of coffee that they serve and is the most popular coffee company in the world. The corporation has coffee shop in more than 50 countries worldwide. Starbucks Corporation is recognized by Forbes as one of the most successful global business organizations in the world. This paper aims at discussing the marketing strategy that Starbucks use to ensure that it maintains its dominance in the global coffee house market. In order to understand the marketing strategy used by Starbucks Corporation it is important to understand the market target of the corporation. Looking at their activities someone will easily notice that they do not have a gender based target. This is because most of the products that they produce can be consumed by individuals of either gender. It can also be noted that the corporation targets a number city dwellers and area citizens as their main target. This is seen in the fact that a majority of their coffee houses are located in cities in major urban areas in the world. This is basically advantageous for them because of factors such as population of cities and urban areas and the kind of lifestyle that citizens living in such areas lead. In cities and urban areas someone is likely to find a very big number of people willing to pay for the products and services that are offered by the company as opposed to rural areas. Looking at the majority of people visiting Starbucks coffee houses, someone will notice that a great number of their customers seem to be people with affluence, and proper education. Thus, it will be right to conclude that a majority of customers who visit Starbucks stores are white-collar professionals who work in the cities and urban areas (Larson, 2009). In relation to age, it can be said that Starbucks targets people in between the age of 25 and 40 years. It would have been inappropriate for them to target teenagers because a majority of them would not have the financial capability to buy these products. They have the understanding that people in the age groups that they target have diversity in taste which explains why the company has diversified in the products that they produce. They have the understanding that this group of citizens has both the financial capability to afford their product and they want for the elegance that is associated with their products. Another thing is that a majority of the consumers who consume products produced in this market belong to thing age group (Gaudio, 2003). The company also targets high income individuals in the society. This can be seen in the manner in which their coffee stores are situated. The majority of the coffee stores under this company are situated in the areas that are occupied by either high or middle earning citizens. This is buffered by the fact that they have always emphasized on the quality of their products, making it hard for them to put emphasis on the affordability of their products. They are much aware that it is the individual with high incomes that would be able to pay for their products. Despite being the leading coffee house business in the world, Starbuck faces allot of competition from other businesses. Their top competitors include McDonalds Corporation, Yum Brands Inc, and Compass Group PLC. In the United States of America, McDonalds Corporation is their most notable competitors. There is limited barrier to the entry of new entrants into the industry, making it very important for the business organization to be aware of the fact. McDonalds launched a campaign that will see to it that they start serving high quality coffee as a part of their menu. This is a way threatened the dominance of the Starbucks corporation in the coffee industry (Thompson & Arsel, 2004). As for another competitor by the name Panera, they have offered a high quality menu that is aimed at luring residents during the breakfast and lunch period. However, there are a number of ways in which the Starbucks Corporation has responded to the competition. One thing that they did, especially in the United States of America is increasing the number of coffee stores within specific geographical locations thus making their products more accessible. However, this action has been criticized by many as a way Starbucks is using to frustrating new entrants into the industry (MacDonald, 2007). Another thing that they have done is acquiring smaller business organizations in the same industry. This in a way, enables them in eliminating competition while at the same time having a chance to introduce diversity into their business activities. This in a way has enabled them to counter the mounting competition from McDonalds Corporation. The quality of their product is also another thing that they have that has always made sure that they are ahead of their competitors (Koehn, 2002). Starbucks Company is very well known for selling coffee, it also sells other types of beverages, snacks, pastries and sandwiches. Starbucks offers low calorie and sugar free drinks and the drinks natural sweetened by choice. Later in 2009 the company revealed that it will be changing its menu and by selling baked goods and salads without high fructose corn. The "Ready Brew", was introduced by the Starbucks Company in early March 2009, and it was first unveiled in New York City, London and Chicago. In 2010, the Starbucks Company began selling wine and beer. In the year 2011 Starbucks Company had its largest cup that was the Trenta that holds up to 30 ounces. In early 2012, Starbuck Company began the selling of iced refresher beverage in its stores. The beverages, fruits are flavored and contain caffeine and have great taste. In 1991 Starbucks entered into a tea business that acquired US8 million for Tazo. Howell on his opinion stated that the dark roast that was used by Starbucks that it does not deepen the flavor of coffee, but instead it destroys nuances. Starbucks introduced Verismo in 2012, a type of pre-apportioned single-use container of ground coffee and flavorings and utilizing. Verismo has esperesso and buttons for coffee that has no strength verification for any type, there are only eight varieties, plus a milk pod (Thompson & Arsel, 2004). In 2010 May one of the hotels in South Africa signed with Starbucks that would enable them to brew coffee. Both parties reached an agreement that was partially. In the year 2010 the company at the sea where with partnership with Royal Caribbean International; opened aboard the shop (Thompson & Arsel, 2004). In the year 2012 over 800 stores were to be opened in the United States for the next coming years and in the same year the company was opened at the university of Ferguson Center. Starbucks blended cream that includes the pumpkin and traditional fall that was mixed with topped pumpkin spices. Starbucks announced in late September 2010 that it was going to raise the price of its products due to the increasing of raw material, dairy and coffee prices. It was expected that Starbucks was to maintain or lower its prices of most of its beverages (Thompson & Arsel, 2004).Starbucks tea are not based on the size but only based on the number of tea bags that it contained, since water is cheap in non-bottle form. In most market $1.50 tall brewed; so that to raise the price of labor. Starbucks has several places where the company is located some of them being Toronto, Argentina, Chile, Australia, Japan and the UK. Starbucks tea and coffee were available in about 40,000 households and grocery, and 35,000 which were located in the US and 6,000 in international markets. Starbucks members are allowed to earn free drinks after every 15 purchases in participating Starbucks stores. Starbucks Capital Assets Leasing Company is located in Delaware. They have also been able to able to extensively use the internet in reaching out for consumers all over the world (Thompson & Arsel, 2004). It is clearly evident that Starbucks has had a marketing strategy that has highly contributed to their performance globally. This is evident in the way that the business has been performing in the global markets. Through this paper, it can be seen how they have targeted certain groups in the society in order to make sure that they maximize their income. The company has also been able to curb the fierce competition that they face in the industry. As a result of proper marketing strategy the company has been able to remain as the biggest in the industry despite there being such high competition. The company also has a marketing mix that perfectly matches its business goals and strategy. All these factors can be used to explain their dominance in the global coffee industry. References Gaudio, R. P. (2003). Coffeetalk: Starbucks™ and the commercialization of casual conversation. Language in Society, 32(05), 659-691. Koehn, N. F. (2002). Howard Schultz and Starbucks coffee company. Harvard Business School Pub.. Larson, R. (2009). Marketing Strategy and Alliances Analysis of Starbucks Corporation. MacDonald, K. (2007). Globalising justice within coffee supply chains? Fair Trade, Starbucks and the transformation of supply chain governance. Third World Quarterly, 28(4), 793-812. Thompson, C. J., & Arsel, Z. (2004). The Starbucks brandscape and consumers’(anticorporate) experiences of glocalization. Journal of Consumer Research, 31(3), 631-642. Read More