The History and Marketing Strategy of Starbucks

Starbucks is an international coffee and coffeehouse chain primarily based in Seattle. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks and items such as mugs and coffee beans. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of these products are seasonal or specific to the locality of the store. Starbucks brand ice cream and coffee are also sold at grocery stores.

History

First Starbucks was opened in 1971 in Seattle and the owners were selling only high-quality coffee beans and equipment. In 1982, Howard Schultz joined Starbucks. He traveled to Italy, and visited the espresso bars of Milan and impressed with their popularity and culture. He advised to sell coffee and espresso drinks as well as coffee beans. In 1987 the owners of Starbucks sold the Starbucks chain to Schultz. In addition to well-situated stores, Starbucks sells coffee, tea, food and entertainment products through its specialty operations. After 1987, Starbucks began to expand quickly. In 1992, Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver and Chicago. The first Starbucks store outside of North America opened in Tokyo in 1996. Then Starbucks entered the U.K. market in 1998 (1). Now, with more than 15,700 stores in 43 countries, Starbucks is one of the most respected brands in the world.

Marketing Strategy

Since McDonald’s and Dunkin’ Donuts entered the coffee industry, there is an enhanced competetition between these companies and Starbucks. So, Starbucks is experiencing different marketing strategies in recent years.

Starbucks positions their products based on quality and image rather than price. Starbucks created the coffee shop revolution, and they have had the ability to be the public educator on espresso coffee. According to magazine article found on Starbucks.com, the company’s brand is a member of the coming century’s top twenty-five brands (2). It is critical that Starbucks position their brand for what the brand stands for: an innovative industry leader that produces high quality products. Brand image, as already shown, is a goal that all the future functional strategies will work to attain.

Starbucks must differentiate their products based firstly on image and secondly on the product itself. Considering that international markets such as Italy are renowned for high quality coffees, it will be difficult for Starbucks to differentiate their products on quality alone. Combined with its research and development emphasis on product development and being the first mover into a market, Starbucks should differentiate its new products based on their unique features and brand image.

Starbucks must position its brand as an experience. The Starbucks’ experience is what will entice new customers to visit their locations and create customer loyalty. First impressions will be vital in ensuring repeat customers.

Starbucks will be able to combat the threats of bargaining power of buyers, substitute products, and competitive forces by continuing to market based on their highly differentiated products and unique brand image.

Advertising strategies used by Starbucks has also been a key success factor. Starbucks has found more success advertising on a local level rather than to the nation as a whole. The Company advertises a lot through print mediums, as Starbucks’ target market tends to be educated people who do more reading than the average person (3).

External Links

1. Starbucks Official Website

2. Starbucks' New Maketing Strategy

3. ReExperiencing Starbucks: A Double Shot

4. Starbucks Online Store

References

1. Wikipedia The Free Encyclopaedia

2. Starbucks Official Website

3. Catching the Starbucks Fever, by Brent Kembell, Michelle Hawks, Sean Kembell, Leonard Perry,Luke Olsen, Missouri State University, April, 2002