Times on Starbucks

http://business.time.com/2012/12/14/do-we-really-need-1500-more-starbucks/?iid=biz-main-lead

Starbucks and Square partner

http://www.stellarbluewebdesign.com/php/blog/index.php/2012/08/starbuckssquare/

Chapter 7 - Business Marketing

Business to business commerce according to MKTG 5^th Ed. textbook is the use of the Internet to facilitate the exchange of goods, services, and information between organizations. This has become a significant revenue source for Starbucks. Besides the company profitability that the company gains, Starbucks also expands their market reach, brand recognition and improves product representation through B2B commerce.

The firm primarily communicates with other businesses in form of business strategic alliances and by selling their products directly to other business. Starbucks forms alliances with other companies and social groups throughout the world, within the same interval they are refining the company's brand awareness and reputation; additionally, they are familiarizing the brand name and products to potential new customers on a regular basis. For example, Starbucks has partnered with Barnes and Noble bookstores since 1993. They established an in house coffee shop in various Barnes and Noble stores. Starbucks also has formed an alliance with United Airlines, offering the company's coffee in brand labeled cups on board. The coffee company has formed an alliance with ice cream manufactures to use the Starbucks flavored ice cream and brand. The firm partners with the National Association for the Advancement of Colored People (NAACP). The collective purpose of this alliance is to support the advancement of both parties' goals, which is to fight for social and economic equality. These are only a few instances of the many alliances that Starbucks has been taking care of. The company fixes great deal to rapport marketing. Starbucks shows to be a reliably dedicated that guarantees top quality and satisfaction.

"Starbucks Business Alliances provides our customers with a custom Starbucks coffee programmed which is tailored to the business partner. A consultative relationship based on proven success, industry expertise and an overall commitment to quality. It’s a commitment that begins with our selection of the finest coffee beans and doesn’t end until the customer savors the world’s finest cup of coffee." Starbucks for Business

Found at http://starbucks.co.uk/business

Chapter 8 - Segmenting and Target Markets

Through the use of market segmentation, marketers can address and their customers specific needs for each group more accurately. In doing so, resources can be distributed correctly and the marketing mix can be adjusted to fit marketers expectations.

Starbucks incorporates a strategy to break down their own market from others in order to sell their products more efficient and effectively. The coffee company predominantly uses demographic and psycho-graphic segmentation.

 Starbucks focuses mainly on married, upper class and sophisticated men and women with children in the age of 40. Therefore, the coffee house created a mature and high prestige image and also provides beverages and food that appeal to children in order to appeal to their ideal segment. The actual segment turned out to be younger and less educated than expected. The main segment shows women in the age of 18 - 43, 42% of them have children, 33% of them are college graduates and 54 % of them are married. A large demographic of Starbucks consumers are college graduates with higher-end income who like to socialize with friends and community. The coffee house locates its retail stores in central spots of a neighbor hood such as train stations because these spots are more convenient for everybody in a community.

Starbucks practices a concentrated targeting strategy by directing their attention at one segment, which is the gourmet coffee drinker. This is how Starbucks’ defines its niche and label their selves as a high quality product. After establishing their niche, Starbucks constantly blankets its product line to keep its only segment excited.

New $7 Cup of Coffee at Starbucks

Chapter 11 - Developing and Managing Products

Developing new products and to be up to date plays a crucial role in today's rapidly moving business world. Innovation is the key of developing new products. Starbucks is considered as the most developing company in the specialized coffee industry. Starbucks provides its customers with new exciting beverages, food items and a unique store experience throughout the year. Coffee is nothing new to the world, and basically all the items Starbucks offers do exist already. But nevertheless, Starbucks makes it happen to update their own company to a overall new experience by creating new product lines, adding new products to existing product lines, improving or revisions of existing products, re-positioning products and innovating customer experience.

Over the thanksgiving period Starbucks brought out a “Thanksgiving Blend” roast to enter the established market of "light blend" coffee drinkers. The coffee house adds new products to its products lines throughout the year. For example, Starbucks extends its line every season by introducing specific seasonal drinks such as the caramel cream brulee or pumpkin spice latte.

The Starbucks ready brew instant coffee is one of Starbucks improvements of already existing products. "Other instant coffees taste flat and lifeless. Starbucks VIA® Ready Brew is different – it’s full-bodied and flavorful, just like the Starbucks® coffee you know and love."  Starbucks guarantees the innovative quality of its instant coffee by promising a packet of the traditional house blend in case of dissatisfaction.

Starbucks has been constantly introducing new products. However, in Starbucks CEO Howard Schultz opinion Starbucks was not always innovating new products.

European Countries Seek More Taxes From U.S. Multinational Companies

http://www.nytimes.com/2012/11/19/technology/19iht-tax19.html?pagewanted=all

Chapter 16 - Integrated Marketing Communication

No matter how good the product is, it will most probably not be successful without the use of promotion. Communication to customers is an essential key to make them aware, informed and more apt to take action. All the promotional strategies from advertising, public relation, personal selling and sales promotion must be combined effectively and efficiency. It is important to promote on each and every stage of the purchase decision making process in order to make customer buy the products. The AIDA concept outlines four basic levels of the purchase decision making process attention, interest, desire, action and indicates the most effective promotion strategies on each level.

 

Starbucks mostly attracts attention through high publicity and all kinds of direct and indirect advertisement. For example, the coffee company seems to be everywhere in NYC. The extreme appearance of the Starbucks brand on cups, stores, packages, TV, social media These outlets catch the average consumers eye immediately and unintentional. 

Simple awareness is not enough to drive a consumer to buy, interest must be created. Starbucks creates high interest by advertising their unique store experience and by public relations. For instance, Starbucks attracts interest by sponsoring communities such as the store in Harlem, NYC that shares the profit with the community.

Starbucks encourages desire by different sales promotion that persuade customers to by new products and by well trained sales people.

"In 1971, our original store in Seattle’s Pike Place Market served its first cup of coffee. Today, Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world. More than 40 million customers visit Starbucks retail stores every week where they enjoy cup after cup of freshly brewed coffee.

Chapter 10 - Product Concept

A product represents "the heart of an organization's marketing program". Without a product, there would be no price, design, target market, marketing mix; promotion strategy in short there would be no business.

Starbucks products can be defined as convenience products because there are relatively inexpensive and limited shopping effort has to be invested. Among the coffee industry though, Starbucks can be viewed as a specialty product because compared to other coffee brands, Starbucks brand name, image and quality of service are key components in their company outlook. Also, the price range of the coffee makes it come off as high quality or a luxury. The coffee company has a high product mix, beside a major variety of coffee and espresso beverage, Starbucks offers different kinds café foods from their cabinet range Starbucks has been constantly expanding its product lines by developing plenty of new products.

Starbucks has an international brand name and loyalty. The coffee house has been able to establish a quality and upscale image. Its logo is well known and immediately identified on a worldwide basis. Starbucks gives many consumers a feeling of high prestige. The company stands out above other coffee houses such as Dunkin'Donuts because of their high quality product, coffee - and it's product mix width; furthermore, because of the unique store experience. Starbucks as a whole is basically the main product concept that makes the company so successful; the actual coffee is considered secondary. No other coffee brand has been able to build a brand where it’s seen as more than just a place where people grab a cup of coffee. One of the most compelling facts is that even though Starbucks products are relatively expensive and defined as luxurious, it is still affordable. Starbucks was actually meant to target the upper working class. But its brand appearance was so pervasive that Starbucks ended up attracting almost everybody throughout the world.