Starbucks

• Starbucks bought its first farm – a 600-acre property in Costa Rica on March 20th 2013 to produce its own coffee beans which may lead to development of new flavor.

• Starbucks works on attaining expertise and good relationships with the coffee growers themselves through the program called “Farmer Support Centers” in San Jose, Costa Rica, Kigali, Rwanda, Mbeya, Tanzania, Manizales, Colombia, Yunnan, China, Costa Rica – Global Agronomy Research & Development Center.

The company attaining its supplies from the actual coffee growers, and thus, effectively passing much of the middle market and saving a sufficient amount of funds.

While other companies seem to use “Competition-Based” pricing strategy and setting the price below the competitions compare to Starbucks, customers still to be still favor starbucks more for its quality coffee and service.

Starbucks sometime also uses “noncumulative discount" - buy one get one half off” or offer

“e-coupon” online through groupon or its own social media sites to stimulate more sale.

And sometime Starbucks use different strategies to encourage customers buying in larger amount such as “quantity discount” by charging half price in happy hours for limited time or in certain period of time of the year, they uses “coupon” discount by charging only $2.00 for any cold beverage if you bring a receipts for your purchase in the morning back to participating Starbucks stores.

Pricing strategies

Philosophy and Attitude Towards Employees

• "Employee First" business model
• Employee experience directly relates to customer experience
• Many financial benefits for employees
• Health and wellness benefits

Starbucks products pricing is premium, which is due to the company’s commitment to quality products and a high level of customer service. Price plays an important role on how consumers perceive a product and whether or not they make the purchase. Starbucks is considered a to be a little expensive for some consumers but their products are priced higher due to perceived upscale image attached to its brand. If we provide consumers with quality products and quality service as a premium brand, consumers will be willing to pay the price accordingly. The Starbucks brand carries a high-end perception and consumers like the feeling of exclusivity. Pricing the products lower will make the product or brand seem cheap. Due to the brand perception and product quality, Starbucks maintain the higher prices. Starbuck’s major Competitors are Dunkin’ Donut, McDonald’s and Caribou Coffee. Starbuck’s price is the highest coffee price with their competitors. The Coffee price is around 2 dollars in those fast service coffee shop. with the same cup size of the same product, starbuck would be the highest one in those three competitors. On the other hand, the Starbuck coffee at the middle price range compare to other high brand coffee shops. so, Starbucks is do well in the coffee industries.

Evaluation of Strategies

• Social media effectively used
• Utilization of promotions
• Unique customer service experience
• Price point = Exclusivity
• Long-term success is good, especially with retention of customers

Nature of Competitors

• McDonalds and Dunkin' Donuts two largest competitors
• Starbucks costs more but also offers an experience
• "Third Place" next to home and work
• Not franchised, consistent experience

Indirect distribution

Retailers ==> Consumer: Vons has packages of different flavor of Starbucks K-cup coffee or Starbucks VIA ready brew coffee bags)

Online Retails ==> Consumer: customers go to Costco or Bed Bath and Beyond websites to purchase Starbucks K-cup coffee or Starbucks VIA ready brew coffee bags)

Direct distribution continue

Our Target Customers’ Needs and Wants

Target Market

Target Market Segmentation Strategy

Benefits:

Starbucks, like every retailer, supports its strategy with its retail mix

Multiple Segment Stragery

• Top of the line customer service.
• A comfortable environment and inviting atmosphere.
• An assortment of beverages and different types of coffee to choose from.
• Obtaining the highest quality of coffee and having a place to eat as well.
• Accessibility in variety of locations

• Starbucks stores ==> Consumer: Cal Poly Pomona Starbucks Store ==> CPP students.
• store.starbucks.com ==> Consumer: customers go to Starbucks website to buy Christmas gift package instead of go to the store)

• The employees are always friendly, smiling, and helpful.
• Starbucks always scopes out those soft armchairs when we go in.
• With the free wifi and suitable environment
• Starbucks offer over 20 different types of coffees alone. For example, lattes, frapuccinos, teas, and much more to choose from.
• Starbucks operates over 18,000 retail stores making it easier for the consumer to find a Starbucks usually within a few miles.

Demographics:

• Income: middle to upper class
• Age: 25- 40 years old
• Gender: Men and Women

Geographic

• Region:All over the World. East and West coast of the United States.

Psychographics

• Personality
• Values
• Lifestyle

Products:

Distribution strategies and type

Direct distribution

Positioning Strategy

“Perfect Cup of Coffee” – Starbucks history has shown that they place a huge emphasis on product quality. Their coffee, even if priced slightly more expensive than expected, is notorious for satisfying customers with its rich, and delicious taste.

Starbucks works with over 18,000 stores in 62+ worldwide countries which they deliver more than 85,000 outbound per week to Starbucks retail stores, distribution channels and outlets.

Starbucks

Starbucks tried to position themselves as a premium product in

the coffee industry by creating a high standard, introducing

innovative products and providing excellent service.

Promotional Strategy continue....

Multiple distribution channels

• In Store purchasing - very detail information about the drinks. seasonal special drinks would prefer to customers.
• price promotional- some times offer half price drinks and food.

Promotion Strategy

Introduction:

• Personal Selling
• Sales promotion
• Promotion on Social Media

By: Joe Wu

Doris Song

Tammy Le

Preston Haerr

Consumer channel: Starbucks distribute its products to the customers through its own Starbucks stores.

Business to Business Channel: Small cafe shops buy Starbucks ready brew package

to make coffee to sell at their shop or

make their own coffee cake products.

Promotion on Social Media

• Facebook- almost 26 million fans
• Twitter - 1 million followers
• Starbucks apps-Promotions on mobile phone applications

• Starbucks is global coffee brand.
• Starbucks founded in Seattle, Washington in 1971.
• Starbucks is primarily known for selling coffee, but also sells other hot and cold beverages, pastries, sandwiches and other snacks.
• Starbucks CEO called Howard Schultz.

For Starbucks, intensive distribution is being used. Starbucks products can be found in every grocery stores such as Vons, Stater Brothers, or retail stores such as Bed Bath and Beyond, Target, Walmart, or even Macy. They can also be purchased at every Starbucks locations all over the world.

Starbucks products are a shopping good, which is associated with using intensive distribution. By using intensive distribution, Starbucks is able to vast array of Starbucks products flowing and supply its best ingredients to all Starbucks stores and quality products with low price to the consumer with everyday.

Customer Service

Customer Satisfaction Measurement

• According to the 2014 American Customer Satisfaction Index, Starbucks fell 5 percent from last year to a ranking of 76 in the survey's quick-service category.

• Detail information asking during the order process
• Sometimes wait long time to order
• remake the drinks if they make a mistake on the drinks

Consumer goods classification

Customer satisfaction is a very important issue with Starbucks. From entrance to the store to the very last drop of their coffees, it is a must that customers feel the uniqueness of enjoying their Starbucks coffee experience.

Product Mix Strategies

Packaging

We’ve offered a cup with consumer recycled paper fiber. And we keep working to decrease the materials used in our packaging, finding new ways to encourage reusable and implement recycling solutions for our cups.

Product Life Cycle

The product life cycle is very important to Starbucks when bringing out new products.

Problem Resolution

"Latte" on customer

Degree of Distribution

• Listen
• Acknowledge the problem
• Take problem-solving action
• Thank them
• Explain what you've done

Products:

Starbucks sells coffees, food items, teas, pastries and other coffee-related items.

Prices:

The price of a beverages range from $1.00-$5.00 dollars.

Places:

All over the world and the United States.

Promotion:

Starbucks has been able to use a standardized advertisement theme around the world in order to incorporate different cultures.

There are three main degrees of distribution, which are intensive, selective, and exclusive. Intensive distribution occurs when a product is sold at every location that is reasonable for that market. Selective distribution occurs when a product is sold through multiple but not all reasonable outlets in a market. Exclusive distribution occurs when a product is sold through a single retailer in a market.