This article is about Starbucks marketing mix in brief. It aims to address the 7Ps of Starbucks. The 7Ps stand for product, price, place, promotion, process, people, and physical evidence.
Introduction to Starbucks
Starbucks is the biggest coffee house chain in the worldwide in terms of number of stores. It is an American coffeehouse chain which was founded in Seattle in 1971. It operates in 70 countries and has over 24,000 stores (Starbucks Corporation, 2017).
Starbucks Marketing mix – Marketing mix of Starbucks
As mentioned above this article explores the 7Ps in Starbucks marketing mix and explains the company’s business & marketing strategies.
Starbucks offers its customers a very good number of food and drink options. The main categories of Starbucks products are breakfast, lunch, cakes & cookies, muffins, pastries & doughnuts, fresh fruit, bottled soft drinks, tea, espresso beverages, filter Coffee, frappuccino blended beverages, refresha, and cold brew. Starbucks is famous for its expertly roasted and richly brewed coffee. It is also popular for a selection of premium teas.
Prices and pricing strategy of Starbucks
There are a number of pricing strategies available to organisations. Premium, cost-plus, loss leader, and going-rate are some of the popular pricing strategies. Starbucks uses a premium pricing strategy. As mentioned above, the company is famous for its richly brewed coffee and a selection of premium teas. Many customers often draw a conclusion that quality products come with a high price. Starbucks has made use of this perception and set premium pricing as the company’s pricing strategy.
Place/distribution channels of Starbucks
Starbucks offers most of its products through Starbucks cafés. As of December 2017, the company operates in 70 countries and has over 24,000 stores. Starbucks has introduced ‘Starbucks on the go’ which is a premium self-serve beverage solution providing a selection of great tasting hot drinks (Starbucks Corporation, 2017). It also has developed a number of apps (Starbucks App for iPhone, Starbucks App for Android, and Starbucks App for Windows) for busy customers who would like to walk in select stores and go straight to their coffee!
Promotional strategies of Starbucks
Starbucks makes use of a number of promotional strategies to communicate with its stakeholders. For example, it spent $248.6 million on advertising in 2016, and $227.9 million in 2015 (Garnick, 2016).
Starbucks has a customer loyalty scheme called ‘Starbucks Rewards’. As a member, you can collect 2 stars for every $1 you spend in stores or online. Every 125 Stars you collect makes you eligible for a reward which is redeemable for a drink or food item.
Corporate social responsibility is another powerful mechanism often used by Starbucks. In 2015, the company announced that it raised more than $5 million for youth organizations in the U.S. and Canada through its partnership with Oprah Winfrey. Oprah Winfrey is globally recognised as a media leader and philanthropist.
People of Starbucks
Starbucks already has a massive workforce. In addition, it plans to recruit around 240,000 more people worldwide including its home country (the USA) by 2021. It is an equal opportunity employer and is committed to building a diverse workforce. Starbucks is also well-known for its investment in employee training and development.It is a customer centric company where customers are the focal point.
Processes in Starbucks
Each Starbucks business function goes through a process. Let’s take customer service process as an example. Starbucks is often a very busy place, and employees need to serve customers as efficiently as possible. The interaction with the customers begins with a greeting by a Starbucks employee. Customers will then place their food/drink order and make the payment. This is then followed by the order being served and a farewell being given.
Physical environment of Starbucks
Physical environment of Starbucks includes but not limited to its store designs, logo, coffee cups, and napkins. Starbucks offers customers an inviting atmosphere. It has adopted a new approach to store designs. The new approach requires Starbucks designers to look at each store individually to ensure that it looks distinctively local (Starbucks Corporation, 2017).
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The article publication date: 09 February 2018
Garnick, C. (2016) Starbucks boosts marketing spend and three other 2016 takeaways, available at: https://www.bizjournals.com/seattle/news/2016/11/21/starbucks-boosts-marketing-spend-2016-takeaways.html (Accessed 25 February 2018)
Starbucks Corporation (2018) Our Heritage, available at: https://www.starbucks.co.uk/about-us/our-heritage (Accessed 20 December 2017)
Photo credit: www.pixabay.com
Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of both Leeds Metropolitan University and London South Bank University.