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Copy of Marketing Mix - The 4 P's - Starbucks

Marketing Mix - The 4 P's Using Starbucks as an example.

Christin Walther

on 29 May 2014

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Transcript of Copy of Marketing Mix - The 4 P's - Starbucks

Brief History
The 7 P's of Marketing

1950's - Neil H. Borden
published "The Concept of the Marketing Mix"
adaption of Cullition's origional theory
"Marketing Mix" included:
creates sales revenue
price determines value of sales
Costs vs. Price
Costs are the expenses of a firm
Price is the amount customers are charged for items
factors when reaching a pricing decision
1/5 costs go towards getting it to the customer
Various methods - transporting, storing, delivering
Distribution system
method differentiates
business of communicating with customers
provides information for the decision making process
Personal Selling, Advertising, Interactive, Direct, Publicity/PR, Sales Promotion
Associated costs = sizable proportion of overall costs
Successful promotion increases sales
Increased promotional activity response to a problem
competitive activity

Referred to as the marketing mix
Product, Price, Place, Promotion, ....
4-P's necessary in meeting consumers' needs
Each equally important for creation of:
brand image & unique selling point
product pricing, planning, branding, distribution channels, advertising, promotions, personal selling, packaging, display, servicing, physical handling, and fact finding and analysis
E. Jerome McCarthy
grouped each aspect into 4 categories
AKA - the 4-P's of Marketing
1940's - James Culliton
"marketing manager = mixer of ingredients"
Starbucks is known for one product: extremely good coffee
Starbucks Example
Starbucks Example
Starbucks has strategically located its retail locations (place)
Starbucks Example
Starbucks has achieved the highest price point for coffee in the restaurant industry
Starbucks is an overall success story when it comes to promoting their products and services
Brand Image
"the third place"
Unique & relaxing atmosphere
Uses technology to promote their brand
Mobile phone applications
messaging systems
Social Media Marketing
FaceBook - daily notices
Free Wifi
Loyalty Cards
Sale Promotion
It is an activity used to enhance the sales of product and services.
It include many strategies like an
. advertising campain
. a free gift
. arranging competition with attractive prices
any good or service that a company provide for the costumers
1) Who is the product aimed at?
2) What benefit will customers expect?
3) How does the firm plan to position the product within the market?
4) What differential advantage will the product offer over their competitors?

Product Life Cycle
Building Product Benefits
Advertising is a non personal form of presentation and promotion ideas, goods are Services trough mass medias like television, magazine and newspaper
Product Decisions
- Product Design: Design be the selling point for the organization

- Product Quality: A premium based pricing strategy has to reflect the quality a product offers

- Product Features: What features will you add that may increase the benefit offered to your target market? Will the organization use a discriminatory pricing policy for offering these additional benefits?

- Product branding: One of the most important decisions a marketing manager can make is about branding. The value of brands in today’s environment is phenomenal.
Personal Selling

is a verbal conversation with potential purchaser of a product with the purpose of selling product.

Its one of the oldest method of promotion. It include the usage of sale force to assist a push or pull methodology where the invention of sale force may be fixed and render after sale services.
Core product
Make sure customers are 100% satisfied
Main Purpose of Promotion
Spread awareness
Develop Interest
Stimulate demand
Reinforce the demand
Direct Marketing
is a concept of establishing a human relationship between the organization rendering a brand, company´s service and the customer.
product line
core product
Direct Sales
Mail order catalogs
The Objective of Distribution
Distribution channel
A distribution channel moves a

Retailer : is the final step in the chain

- deals directly with the customer

Advantages :
Convenience for customers
Retailer chooses the final price and handels the financial transaction
After sales support (e.g. returns)
Pricing new products
1) Penetration pricing
- setting a relatively low price to boost sales
- new product main objective: growth and market share quickly

2) Price skimming
- setting a relatively high price to boost profits
- well-known businesses products -new, high quality, premium products
To make products available in the right place at right time in the right quantities.
Threat of competitors
McDonald's - McCafe
Consistently offers a high quality beverage
Starbucks counter offer
$1.00 coffee item
aiming at a new target
- they enhance your brand.
- brand ambassadors

People is the key to the success, because they representing your product

product from production to consumption
Starbucks Example
" We treat our customers as we treat one another, with respect and dignity."
- train their staff (coffee making, serving, tasting, communication skills)
- active, getting the things fast, customer-oriented, open-minded and friendly
“happy customers” start with “happy staff”
Physical Evidence
Starbucks Example
Starbucks - Place to be
Starbucks Example

- clean, friendly environment
- cozy chairs, sofas, tables, book shelves
- bright and “tasty” show case with those alluring pastries
- coffee pictures
- smiling welcoming staff (green uniforms)
- nice music
- WiFi
That’s everything your customers or your potential customer see when engage in an interact with your company or your brand.

- physical product
- packaging
- the website
- the store
- the uniforms from the staff

- reduce the line
- 1 person who takes the orders
- next one taking the payment
- third one making the drinks
Buy in large quantities from producers
break into smaller quantities to sell to retailers


reduce the producer´s transport costs
Retailer can order in smaller amounts from Wholesalers

pay with mobile phones
- looks at the systems used to deliver the service
- all services need to be underpinned - clearly defined and efficient processes
Everybody knows what to do and how to do it.
Does not hold stock
Tend to operate in tertiary sector ( services) Travel, Insurance, Publishing
Earn Commission based on sales achieved

Distribute ( sell on) products and serve as a local sales point
Usally specialise in a particular industry ( e.g. building supplies, electrical components, industrial clothing)
offer products from producer = greater choise
Different from agents in that a distributor holds stock

Helpful mobile applications
store locations
achieve maximum daily visits from consumers
target potential customers
correct answers
What does a business adjust to create a brand image for a product?
- The marketing mix
What is the most important element of the marketing mix?
- No single element is the most important
What does the overall marketing mix of a firm determine?
- Marketing strategy
Who is protected by consumer protection laws?
- Businesses and customers
Which of the following is NOT an element in the marketing mix?
- Profit
Where are premium products most likely to be sold?
- In designer stores
When is a business most likely to adjust the marketing mix of a product?
- If customer needs change
A supermarket's own brand range of products:
- Has its own marketing mix
How is a business most likely to increase sales of a premium branded product?
- By increasing promotion
What does the overall marketing mix create?
- A unique selling point for a product

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