Marketing Mix of Starbucks Coffee
Starbucks is the largest and most successful coffee house chain in the world. It has more than 22,500 of its stores running worldwide. The reason behind its global success is the premium quality of its products and great leadership of Howard Schultz. The brand is known for ethical sourcing, excellent customer service and its wide variety of beverages. Its products may be priced higher than its competitors but it is the quality that really counts for the real coffee lovers. Apart from premium coffee and tea, Starbucks sells coffeemakers and glasses too.
Another notable part of its business is its relaxing environment where customers can sit and enjoy coffee when away from home and workplace. These stores are between the two – a haven for those trying to lose the day’s stress. Based on its products and extraordinary service, the brand has acquired global fame. In the recent years it has also upped its investment in marketing. It was not so always and traditionally it relied more on word of mouth for marketing and other natural tactics. However, things have started changing now. Starbucks has revamped its approach to marketing. Here is a marketing mix of Starbucks that analyzes its four P’s.
This is the most important area where most of Starbucks’ focus has remained since always. Great products do not require a lot of marketing. This is the belief that Starbucks has held traditionally. However, the world knows that Starbucks serves the best coffee sourced from all around the globe. These cocoa beans are acquired from farmers in diverse areas and then processed with great care before being served. Starbucks roasts its beans longer than others to bring out the exclusive flavor. Apart from Coffee, Starbucks also serves tea. Some of its notable products are here:
- White chocolate Mocha Frapuccino- Calorie value: 520 calories; a blend of coffee, milk and ice with whipped cream on the top.
- Iced Flat white: Calorie value: 150 calories; A blend of coffee whole milk and ice to create the right flavor that is neither too strong and nor too creamy.
- Pepper mint mocha: Made with espresso, steamed milk, sweet mocha sauce and peppermint-flavored syrup. Topped with dark chocolate curls and whipped cream.
- Gingerbread Late: A perfect holiday drink; gingerbread flavors mixed with classic espresso and steamed milk. Topped with ground nutmeg and whipped cream.
- Tazo Zen: A type of green tea with lemon grass and spearmint. Made for the health conscious people. Good for physical and mental health.
- Starbucks sells so many varieties of tea and coffees. Apart from it, the coffee brand also sells coffee mugs and glasses, Coffee makers, coffee presses, grinders and other equipment.
Starbucks has used the premium pricing strategy. It has helped the brand create a premium image. However, it has backed its pricing strategy with premium quality products. In case of premium pricing, the brands set the product of their prices higher than their competitors. It targets the customers from the premium segment mainly. Since these customers are willing to pay a little higher if they get satisfactory quality, it works to boost the profits of the brand. Starbucks provides great product quality as well as superb customer service and so its customers do not mind paying a bit higher prices.
The Starbucks experience is entirely exclusive in itself and complements its pricing strategy. The idea is to provide the best quality products at moderately higher cost. However, Starbucks does not just sell coffee but an entire experience built around the idea of offering a luxury experience. There is everything from music and comfort to store design and luxury to help the customers lose stress. Moreover, Starbucks customers are apparently impervious to the price difference between its products and the competing ones. These factors have helped it sustain both a premium pricing strategy and a premium image. Its premium pricing strategy complements its ethical, global and premium brand image.
Starbucks stores hold an important place in the marketing mix of Starbucks. These stores are designed to deepen the love between the brand and its customers. There is a warm and welcoming environment inside these stores where smiling Baristas are always willing to share their knowledge and passion with their customers. The customers are a part of the family for the famous coffee brand. Starbucks has created this environment so that the customer takes back only pleasant memories. However, you will not find Starbucks products only inside its stores. There are hundreds of other channels too that it has used successfully to reach its customers. Its consumer packaged goods products are available across 40 countries at grocery stores, airports, hotels and convenience stores.
Starbucks itself claims that there are more than a million places where you can find its products. They include the 120,000 grocery and convenience stores. However, the connection does not end here. It has expanded online too. Starbucks’ own websites as well as other retail sites too sell its products. You can shop for coffee, tea, coffeemakers, glasses and other products and gifts online from Starbucks. In this way, the world famous coffee brand has managed an extensive distribution channel to become an omni-present brand. However, there is still more scope in the emerging markets where it is still not as famous and common as in developed nations.
In the recent years, Starbucks’ focus on promotion has intensified. It has raised its marketing budget and started using the channels it did not use traditionally. It is trying to expand into the emerging markets and the competition has also grown intense. In 2015, it spent more than $350 million in marketing and advertising. So, it seems Starbucks is getting aggressive about marketing and advertising. Both traditional and modern channels are being utilized for this purpose.
The brand is using the traditional media as well as the digital media to advertise its products and brand. Apart from that social media also plays an important role in Starbucks’ marketing strategy. Apart from that its own website and stores also an important part of its promotional strategy. The premium quality of products and service as well as brand merchandise are still effective to gain loyalty. Its reward programs another method of gaining customer loyalty and popularity. Overall, Starbucks is using several channels for better customer engagement and effective promotion of its brand.
This analysis shows that Starbucks has not become a brand synonymous with coffee without a reason. From sourcing to roasting and packaging, the brand is exemplary in all areas. It has crafted an exclusive and extraordinary experience for its loved customers. Its premium pricing strategy is complemented by a premium taste and a matchless experience which is warm and welcoming. The flavor of its coffee and tea has left all the rest behind. The brand has also grown its presence extensively by the use of diverse channels for distribution and promotion. At last, it is now more aggressive and willing to utilize the power of marketing to grow its presence. However, the emerging markets can provide profitable opportunities given that it can craft a strategy suitable for the developing economies.
Source: Starbucks Stores (Online)