Starbucks opened in 1971 in Seattle, Washington. It now has over 30,000 stores worldwide. Starbucks focuses on premium coffee and creating a unique experience for customers through high-quality products, ambient store design, and well-trained employees. While Starbucks spends less than 1% on advertising, it has cultivated a loyal customer base through innovative promotion strategies like mobile payments and viral social media interactions. Starbucks differentiates itself from competitors by offering an upscale coffee experience defined by consistency and customer service.

1. A BRAND STUDY
On Starbucks

2. A BRIEF HISTORY

3. • The first Starbucks opened in Seattle, Washington,
on March 30, 1971.
• 3 partners at the University of San Francisco:
English teacher Jerry Baldwin, history teacher Zev
Siegl, and writer Gordon Bowker.
• They were taught a unique style of roasting beans
by fellow coffee lover/store owner, Alfred Peet .
• Current CEO, Howard Schultz joined in 1982 who
pressed for espresso drinks and coffee.

4. • Initially slated to be called Pequod after a whaling
ship that appears in Moby Dick.
• It was scrapped in favor of the ship’s chief mate
Starbuck.
• As per Bowker, they were very close to naming it
Cargo House.
• However Heckler suggested that names beginning
with “st” were powerful.

5. • This led them to base the name off of an old
mining town named Starbo.
• The Starbucks logo is an image of a twin-tailed
mermaid, or as per Greek mythology, a siren.
• The logo is based on a 16th century Norse
woodcut.
• It’s gone through various significant changes, such
as changing the color from brown to green, which
was a nod to the 3 founders’ alma mater.

6. THE 7 P’s:
Product

7. • Starbucks has 30 varieties of whole bean coffee.
• They sell coffee, Italian-style espresso beverages,
cold blended beverages, as well as a selection of
premium teas.
• Novelty items, music CDs etc. are also sold.
• In addition, they also sell coffee-related
accessories and equipment.
• Tazo Tea is the Starbucks brand. There’s many,
many different flavors: iced teas, lemonades,
lattes, hot or cold.
• Some of the most popular teas fall in the Chai
tea category: a spicy black tea with cardamom,
cinnamon, black pepper and star anise.

8. • Espresso: Strong, black coffee brewed by forcing
hot water through coffee grounds. More
concentrated, has more caffeine than regular.
• Starbucks Latte: Espresso with steamed milk and
foam.
• Caramel Macchiato: Vanilla latte with less vanilla,
extra foam and a caramel sauce on top.
• Starbucks Cappuccino: Similar to latte but with
more foam.
• Starbucks Mocha: Espresso, steamed milk and
chocolate with whipped cream on top.

9. • Starbucks Coffee Frappuccino: Starbucks coffee,
milk and blended with ice.
• Starbucks blended creams: Pumpkin spice
frappuccino which includes pumpkin and
traditional fall spices, mixed with milk and
blended with ice, then topped with whipped
cream and pumpkin spices.
• Starbucks conducts various surveys to determine
what its customers prefer.
• In addition, ingredient research is outsourced to
dedicated teams who determine what spice/flavor
goes best with what, in accordance with
Starbucks’ Guide To The Perfect Beverage.

10. THE 7 P’s:
Price

11. • Starbucks has a simple price strategy: High price,
high quality i.e. the perceived upscale image.
• If customers feel they are getting a good deal,
they are willing to pay more.
• A single coffee in India costs anywhere from Rs.
200 – 300, and $2.50 – 5.00
• Unlike the coffee however, tea prices aren’t based
on the size, instead it’s based on the number of
tea bags, since water is pretty cheap in non-bottle
form.
• The price, according to Starbucks, is said to
include the entire Starbucks experience: free WiFi,
the unique ambience, and the food.

12. Source: Wall Street Journal
Prices vary drastically, with India being the cheapest.

13. THE 7 P’s:
Place

14. • Starbucks has branches in Argentina, Australia,
Chile, Singapore, Japan and the UK.
• Has in-store tie-ups with Barnes & Nobles and
Target.
• Approximately 20 Starbucks cafes in Mumbai.
Other cities are Pune, Delhi, Kolkata, Chennai etc.
• It had 165 stores when it went public in 1992. It
surpassed its 10,000 outlets goal and plans for
another 10,000, worldwide.
• They believe that by creating an intimate and
welcoming environment, and providing great
coffee, patrons will not only keep coming back for
more, but will spread the word.

15. • Starbucks has a controversial strategy: saturating
the market.
• Typically, stores place their retail outlets in
locations based on demographics, traffic patterns,
location of competitors as well as the location of
its own stores.
• The Starbucks strategy went against the grain.
Instead of following the trend, Howard Schultz
chose to go against conventional wisdom.
• The strategy was to blanket an area completely.
Instead of worrying about stores eating up each
other’s business, it focused on heavily increasing
the foot traffic in one specific part of town.

16. • Schultz knew that his strategy was a risk, but it
was one he was willing to take. In the end it paid
off.
• Clustering its stores in one area helped Starbucks
quickly achieve market dominance.
• With over 20 million regular customers per week,
no other American retailer can claim a higher
frequency of visiting customers.
Santa Fey Springs, CA hasthehighestdensityof
Starbucksintheworld.
About560Starbucksoutlets…
… in 25 miles of land.

17. • What’s amazing is the fact that the company
spends less than 1% of its annual revenues on
advertising, versus the typical 10% of most other
retailers. Instead, the Starbucks strategy relies on
word of mouth advertising.
• Store design, planning and construction are also
part of the strategy. Locations are designed for
customers to meet, relax or simply enjoy a
peaceful interlude in their day.
• It is also notorious for buying out competitors’
leases and conducting operations at a deliberate
financial loss. This intentional loss is designed to
drive out local competitors.

18. THE 7 P’s:
Promotion

19. • Starbucks started a community website, My
Starbucks Idea, designed to collect suggestions
and feedback from customers.
• My Starbucks reward program allows members to
earn a free drink after every 15 purchases at
participating Starbucks stores.
• It’s rare to find a Starbucks ad on billboards, ad
spaces, newspapers, posters.
• Starbucks stresses quality above price and other
features it could emphasize.
• In 2001 Starbucks introduced the Starbucks Card,
a stored-value card for customers to use and
reload.

20. • The company has gone to great lengths to create
a “community atmosphere” among premium
coffee lovers.
• It’s a running joke on the Internet, wherein the
“premium coffee lovers”, or hipsters as they are
called, are usually depicted as having iPhones,
MacBooks or any other Apple products.
• It is oft remarked that Starbucks should be
renamed iCoffee for these privileged people who
use only Apple products and wear vintage
clothing to distinguish themselves.

21. A bus-stand troll in Los Angeles
Don’t be an iDiot (clever Apple reference)

22. • Starbucks has its unique home concept of writing
its customers’ names on the cups.
• However there’s more here than meets the eye.
This is one more viral Internet sensation, where
Starbucks baristas are perpetually getting your
names wrong, eg. Abhishake.
• The often hilarious spelling mistakes in the
customers’ names may be intentional or
unintentional – take your pick. This is the part of
the whole Starbucks experience.
• A sense of intrigue and mystery is invoked, and in
some cases extreme annoyance. But it’s all
planned as part of a shrewd promotion strategy.

23. Diana Naomi
Jessica

24. • INDIRECT PROMOTION: Thebestandshrewdest
formofpromotion.
• Whether itisoutofannoyance orwanting to
shareyourname being misspelled humorously
withtheworld, itultimately leads youtotweeting
orsharing about itin anywayonsocial media.
• Virality isnecessary tosurvive andretain yourself
today, andStarbucks cashesupon that brilliantly.

25. THE 7 P’s:
Process

26. • Starbucks operates primarily through joint
ventures and licensing arrangements with
consumer products business partners.
• International specialty operations comprise retail
store licensing operations in more than 40
countries and foodservice accounts in Canada and
the UK.
• US specialty operations include licensed retail
stores, food service accounts and other projects
related to Starbucks’ main business strategy.
• They have a contact less payment service that is
available on iOS as well as Barclay card. An
Android app is in the works.

27. • Starbucks accepts store license applications
online, with the initial information centering on
the type of operation being run by the applicant.
• Starbucks started a community website, My
Starbucks Idea, designed to collect suggestions
and feedback from customers.
• A dedicated team works specially on these
recommendations. The feasibility of the
suggestions is gauged and efforts are done to
maximize it.
• Thus Starbucks’ process is overall, pretty
customer-centric.

28. THE 7 P’s:
Physical Evidence

29. • Starbucks provides information on its products,
business partnerships, and career opportunities
on its website .
• The famous Starbucks Logo (which is green and
features a siren) has stayed largely unchanged
since its origin, however it has been altered to
adjust to international sensibilities.
• The latest change was made when Starbucks
opened in Saudi Arabia.
• Starbucks stopped using pre-ground beans in its
stores in so that the grinding of whole bean
coffee will "bring aroma, romance and theater"
to American stores.

30. • Starbucks offers a combination of product and
service and does a good job in giving customers
the best experience, so they want to try it again
and again.
• Customers pay not just for cup of coffee or tea,
but for overall enjoying their time. When you
enter the café you see a clean, friendly
environment, with cozy chairs, sofas, tables, book
shelves, bright show cases with alluring pastries,
menus with tempting coffee pictures.
• The smiling welcoming staff in the green
uniforms, with soft music in the background
complements the atmosphere.

31. THE 7 P’s:
People

32. • Howard Schultz: Chairman, Chief Executive
Officer for Starbucks.
• Olden Lee: Interim Vice President
• Barbara Bass: Director, Non Executive Board
• Cliff Burrows: President, Starbucks Coffee US
• Author Rubenfeld: Global Development
• Troy Alstead: Chief Financial Officer
• John Culver: President, Global Consumer
Products

33. • “Happy customers start with a happy staff” – This
is at the root of Starbucks’ people ideology.
• People are the core standing point of Starbucks
and they lay extra emphasis on “We are not
employees, we are partners”.
“We are not in the coffee business, serving people.
We are in the people business, serving coffee.”
– Howard Schultz, 2004

34. • Starbucks spends a lot of time and effort to train
and teach its staff.
• Every employee goes through coffee making,
serving, and even tasting as they are expected
to advise customers who are confused with the
wide choice.
• It also encourages diversity, whether
racial/ethnic or country related as it
incorporates a large number of people from the
local stream where it is setting up cafes.
• It believes in fostering a truly world
neighborhood environment and is, in every
sense, a truly international company.

35. PRODUCT
DIFFERENTIATION

36. • Starbucks also spends a lot of time and energy
differentiating itself from the competition.
• This is evident in the design of its coffee shops,
the music played there and the types of products
it sells, such as coffee-brewing equipment and jazz
CDs.
• Starbucks makes sure to keep current on the latest
technology, often being the first to introduce the
newest advancements to its customers.
• Starbucks was one of the first companies to adopt
location-based promotions and mobile payments.

37. • It employs a broad differentiation strategy. This
strategy is concentrated on a broader segment
of the total market. It serves a market that is
defined by coffee drinkers.
• This has made the organization well-known for
tailoring to broad customers’ needs by
preparing orders to meet customers’ wishes, no
matter how detailed they are.
• Starbucks is also well known for quality
products, with stringent guidelines outlining
how their coffees are to be prepared eg.
espressos must be served within twenty-three
seconds of brewing.

38. USP: Unique Selling
Proposition

39. • The USP of Starbucks is a relatively simple one:
premium coffee.
• It has never claimed to offer the cheapest
coffee in town, but by offering their own style
of an enriched upscale coffee experience, they
have managed to carve out a large niche of
coffee loving people.
• The premium coffee experience that Starbucks
claims to offer is what makes it stands out from
its peers and this includes not just the high
quality coffee, but also employee-customer
interactions, environment and ambience
offered, complete with various conveniences.

40. REFERENCES:
• Forbes magazine:
www.forbes.com/sites/rachelhennessey/2012/08/06/3-
reasons-why-starbucks-still-shines-despite-market-
shortcomings/
• UK Essays:
www.ukessays.com/essays/marketing/marketing-mix-
analysis-for-starbucks-coffee-marketing-essay.php
• BaristaExchange:
www.baristaexchange.com/forum/topics/what-makes-
the-starbucks
• Business Strategy:
www.thebusinesstrategy.blogspot.in/2013/03/how-
has-starbucks-been-so-successful.html

41. THANK YOU