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Case Study Starbucks


Starbucks, a coffee brand that was launched by Jerry Baldin, Gordon Bowker and Zew Siegel in 1971 in Seattle in United States of America, emerged such as a famous brand comparatively in short time frame, made an extremely extraordinary affluence from a straightforward idea of making caffeine since its center process. In first stages of its beginning, Starbucks products had not been so wide; it was relatively a coffee bean retailer and operate some other items like coffee jars and gizmos necessary to grind and make espresso at home. Steadily Starbucks included music, films and literature into its products.

But Starbucks really penetrated in the market when Howard Schultz signed up with it. He introduced and implemented innovative and modern business ideas and marketing skills which result in extraordinary enlargement of Starbucks that Starbucks was more or less in every area in america of America in a very short period of time.

When the earth market was quite steady, Starbucks took extensive advantage of it by getting dual digit growth in pretty much each financial year. But in current amount of recession which even caused the closure of a lot of retail businesses have an effect on the progress of Starbucks as well. In results company dismissed its CEO Jim Donald by the end of 2007 and called upon its visionary leader Howard Schultz to the position, excited that he is competent to consider the company back in the most notable.

In this analysis record, we will discuss the main element methods and components of Starbucks functions like how it targeted the market, advertised it as a brand and related strategies about its product combination which guided to its placement available on the market and facilitated Starbucks to grow from a small coffee dealer to a business leader.

Target marketing

A marketplace includes group or groups of buyers who have similar needs or characteristics that the company decides to serve (Kotler and Armstrong 2004). Concentrate on marking is a procedure of selecting market segments and then create a product or give a service particularly created for those segments. It is a relationship between segmentation and product positioning. Once companies select their market segment to launch their product the next stage enter into place is aim for marketing.

When Starbucks commenced its business in Seattle, it was operated locally and possessed very limited product line. But Starbucks moved into the marketplace with unambiguous ideas and clear-cut objectives. The master plan was to build an Italian caffeine bar culture, a cafe which feels like a third place in between house and work location to people. A place where people can sit down in, relax and socialize. Although it was not an progressive idea which is making coffee and there were many competitors on the market as well. Starbucks made an effort to position itself as a luxury brand and steadily these were on the make with their target market even though Coffee use in United States was drifting down since 1960's( with regards to research study). The CEO of Starbucks took right decision at right time about presenting new ideas in the market. He used the next market ways of promote their business.

  1. Well planned store agreements which help customers to relax and socialize.
  2. Customers were allowed to listen the music they like.
  3. High degree of customer service, well trained staff which were given good training and other job benefits which maintained them loyal and enthusiastic with their work.

Product positioning

Product positioning methods to introduce something in the market where it is skilled to transport on and prevail over your competition on the market. However the notion of the consumer about the product is very significant and it must choose product attributes. The product positioning in the market determines its capability to endure and compete the marketplace effectively.

Starbucks management acquired clear-cut strategies about their product placement. "The entire strategy is to create Starbucks into a destination". Kenneth Lombard, chief executive Starbucks entertainment. "Starbucks isn't an entertainment company. But you want to produce an entertainment strategy that helps the foundation of the espresso experience that our customers have come to expect and revel in". Howard Schultz, CEO Starbucks.

Howard Schultz, CEO Starbucks took ground-breaking steps for product positioning and the market response was amazing that talk about price elevated from $17 to $21 which permitted for the company to put into action its expansion insurance policies. The following considerations were taken by Starbucks while initiating its business in new region.

  1. Presume the neighborhood demographic profile which can only help out to elevate functional leverage.
  2. A 'Hub' installation in main regions of the town, where certified and trained people will be employed to assist and support new stores.
  3. In every region, Starbucks will plan at least one big communal event to rejoice its entrance.
  4. Local staff will be enlisted from customers and home based business partners whose titles are part of Starbucks database of customer's catalogue.

All these were the major steps by the Starbucks in broadening process which in result awarded excellent respond to company and usage of inaccessible places like international airports. Starbucks adopted Licensing and Partnership strategies to increase their business in several regions of the globe but it was very vigilant in sustaining its goodwill and brand image at the same time. Furthermore Starbucks exposed the stores next door and some stores as clusters which increased greater results in active mornings and offered rise to sales amount.

Another important feature of Starbucks success was the appropriate importance directed at customer's opinions as it was very very important to the business because that they had introduced many progressive things in the market that actually needed hold of the market industry. At first Starbucks product line was not a lot of but by the passage of time and by realizing the demand, Starbucks heading ahead with expanding their product line. Orin smith, member of senior management team said"it isn't going to be always a lot of 1 thing. It will be food which makes sense and suits the customers and their choice of beverages".

Starbucks initially an area coffee store, even started out product developing with an increase of advanced and proven companies which facilitated Starbucks to make the most of their wide syndication networks and way in to new superstores, shopping malls and restaurants.

Marketing Mix

Marketing combination is a set of controllable, tactical marketing tools that the company blends to create the response it desires in the mark market. The marketing blend consists of everything the company can do to affect the demand for its products, (Kotler and Armstrong, 2001). Product, price, place, campaign, physical proof, process and people are the extensive marketing means that a company utilizes to accomplish its goals. Many of these marketing combination components play a essential role in the success of every business. A number of roles participated by these factors in Starbucks circumstance are discussed below.


Starbucks started business with traditional espresso brewing techniques and some other products like espresso jars and gizmos necessary to grind and make espresso at home. Apparently they expanded their product line and majority of these products captured the market. Like Starbucks created non-fat milk, it increased the demand and produced improve results. Other things in Starbucks product line were movies, music and reader's part. Starbucks also experienced Frapuccino, which made excellent results as well.


Customer care and attention is a key quality control way of a service marketer. (Lancaster 2001). Good service quality was another most important landmark of Starbucks. All the personnel was well trained and Starbucks gave them good training and other job settlements which stored them faithful and enthusiastic to their work. In words of Howard Schultz, "Treat people like family and they will be loyal and present their all. " The complete inside methods were well identified and correspondent which also improved upon customer satisfaction.



Starbucks experienced lacking funds for its promotional activities while getting into a fresh market. Instead of owning a popular promotion in a very noticeable location, Starbucks intended to enjoy at least one big public or community event on its entrance in every region and it also recruited local associates within promotional activities, which made extensive publicity and goodwill for Starbucks and also better sales turn over.


Location or place is an important tool in the marketing mixture. Starbucks completed lots of sophisticated researches to sort out the complexes that may occur as part of its physical presence as the positioning of your business plays a key role in its success. They used to study the demographic information to produce an operational framework with high leverage. In addition they created stores with drive through service, which also became a landmark. Starbucks also tried store clusters and beginning stores next door. Each one of these decisions produced reasonable results than expected.

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