Supporting Information on Starbucks Coffee Company

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Introduction

Starbucks was started in 1971 in Pike Place Market in Seattle by English Teacher Jerry Baldwin, writer Gorden Bowker and history teacher Zev Siegel with a focus on coffee, tea and spices. These three founders had a passion of evaluating fine coffee and exotic tea. Starbucks initially became a trader of coffee beans (Shah, Thompson & Hawk, 2006). But its present Chairman Howard Schultz took over this company from Jerrry Baldwin, Zev Siegel and Gordon Bowker and visualized Starbucks not as a trader but as the retail chain which serves ready hot coffee to the consumers serving them in best possible ways which was a result of his experiences while travelling to Italy where he found friendly employees at coffee bars serving variety of coffees in the form of espresso, cappuccino and latte with a background music running in the café (Shah, Thompson & Hawk, 2006). The inspiration of Schultz made him an entrepreneur from an employee of Starbucks with start of his own retail chain which acquired Starbucks later on (Shah, Thompson & Hawk, 2006). Starbucks Coffee is the largest coffee retail chain in U.S with revenue of $3.8 billion recorded in the first quarter of the fiscal 2013 ending December 2012 (Starbucks, 2013: Jan. 24) and leading market share of 32.6% in U.S (Statista, 2013: n.d). The mission of Starbucks is "to inspire and nurture the human spirit of one person, one cup and one neighborhood at a time" (Starbucks, 2013: n.d). Therefore Starbucks...

This paper attempts to explore the marketing strategies of Starbucks which has led the company to be a successful coffee retail giant. The focus of this paper is to identify and analyze the product development strategy of Starbucks, its pricing, promotion, media strategy, distribution strategy and the client or customer satisfaction.

Marketing Strategy of Starbucks

The marketing strategy of Starbucks is centered around creating a strong customer experience around its brand providing quality of taste and variety to the consumers across the world due to which it focuses on strong product development initiatives, generating good experiences through proper customer feedback and use of social media to spread word of mouth which has made it to the top 5 list of brands as per the marketing consultancy Millward Brown's list of Top brands in terms of brand value (Satran, 2012: Sept. 7; Millward Brown, 2012: n.d).

Target Markets of Starbucks Coffee

Starbucks Coffee targets the demographic market segment of 18-49 years old men and women (Satran, 2012: Sept. 7). The geographic market segments of Starbucks coffee include the following markets:
- Americas
- Europe
- Middle East
- China and Asia Pacific

The company focuses on selling coffee, tea, juices and food beverages and coffee vending machines, equipments and other merchandise (Starbucks, 2013: n.d).

Customer/Client Satisfaction at Starbucks

Customer Satisfaction of Starbucks has reduced as the American Consumer Satisfaction Index (ACSI) for 2012 shows that the customer satisfaction towards Starbucks has declined and has been ranked at 5th position and the rating has declined by 4 points at 76 and this is due to the relatively high prices at Starbucks as consumers feel happy with low prices in the poor economic condition in U.S (Tice, 2012: June 20). Despite this lowering of rank in customer satisfaction, Starbucks has been continuing its focus on providing great customer experience through focus on creating a good and friendly atmosphere for the customers. The baristas who serve the coffee are directed to have a smile while greeting the customers and the company invests in providing training to the employees so that they have an extensive knowledge of the product offering about the different varieties of products served at the outlets so that employees are knowledgeable about offerings and are able to serve the customers in a superior way (National Business Research Institute, 2012: June 15).

Product Development

Starbucks purchases and roasts coffee which the company sells along with handcrafted coffee, tea, other beverages and fresh food items through its retail stores (Reuter, 2013: n.d). The company continuously focuses on developing new products. Starbucks has been focusing on diversifying its product portfolio through development of not only new types of coffees but extending into other product categories such as offering fresh juices. The company has been continuously focusing on ...