Marketing mix of Starbucks – Starbucks Marketing mix
This is a detailed analysis of the marketing mix of Starbucks. It aims to address the 7Ps of Starbuck which stand for product, price, place, promotion, process, people, and physical evidence. 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 80 countries and has over 32,000 stores (Starbucks, 2022).
Products of Starbucks
Starbucks offers its customers a very good number of food and drink options. The main categories of 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. However, some consumers complain that coffee often comes up with bitter and burnt taste as the restaurant roasts its beans at a very high temperature to produce large quantities of beans in a short time.
Prices and pricing strategy of Starbucks
Price is a key element in the marketing mix 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. It operates in 80 countries and has over 32,000 stores (Lock, 2021). It has introduced ‘Starbucks on the go’ which is a premium self-serve beverage solution providing a selection of great tasting hot drinks (Starbucks, 2022).
Starbucks 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! It is also partnered with Uber Eats and Just Eat to deliver coffee, snacks, food items, and other beverage in many U.S. cities, the UK, and beyond.
Promotional strategies of Starbucks
Promotion plays a big role in the marketing mix of Starbucks. The coffeehouse chain makes use several promotional strategies to communicate with its stakeholders. For example, it spent $305.1 million on advertising in 2021 (Guttmann, 2021). This amount represents an increase in global advertising cost compared to the previous year. Starbucks is also one of the top companies in the USA in terms of media spending.
Starbucks has a customer loyalty scheme called ‘Starbucks Rewards’. As members, customers can collect 2 stars for every $1 they spend in stores or online. Every 125 Stars they collect makes them eligible for a reward which is redeemable for a drink or food item (Starbucks, 2022).
Corporate social responsibility is another powerful mechanism often used by Starbucks. For examples, 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.
Starbucks has an effective social media presence. Its social media posts often get a lot of engagement and reach its intended audience quickly. However, it should be mentioned that the company announced in 2020 suspension of paid advertising on some social media platforms in response to hate speech.
People of Starbucks
Starbucks already has a massive workforce. After a challenging time in 2020, it has already started hiring people in many countries. 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. The Barista Basics Training programme aims to provide new barista with the skills and the knowledge needed to work efficiently at the restaurant. As long as the customers are concerned, Starbucks is a customer centric company.
Processes in Starbucks
Each Starbucks business function goes through a process. Let us 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 is the last area of analysis in the marketing mix of Starbucks. It 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, 2022).
Starbucks has been able to achieve a high level of customer satisfaction with its stores because they have created a unique, comfortable, and welcoming environment for customers. The stores are aesthetically pleasing and very good for customer use.
The store layout is designed with customer convenience in mind as well. There is enough space for people to walk and not feel claustrophobic. There are also enough seats so that they can sit without feeling uncomfortable or waiting too long for a seat.
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Last update: 23 February 2022
Guttmann, A. (2021) Starbucks Corporation’s advertising spending worldwide in the fiscal years 2011 to 2020, available at: https://www.statista.com/statistics/289363/starbucks-advertising-spending-worldwide/ (accessed 10 February 2022)
Lock, S. (2021) Number of international and United States Starbucks stores from 2005 to 2020, available at: https://www.statista.com/statistics/218366/number-of-international-and-us-starbucks-stores/ (accessed 02 June 2021)
Starbucks (2022) Our Heritage, available at: https://www.starbucks.co.uk/about-us/our-heritage (Accessed 16 February 2022)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.