MARKETING MIX

Starbucks and How They Incorporate the Marketing Mix into Their Business



Starbucks and How They Incorporate the Marketing Mix into Their Business

Introduction

Starbucks are the world's number one specialty coffee retailer, currently with more 12,000 coffee shops in more than 35 countries. The outlets offer hot and cold coffee drinks and few food items, as well as beans, some coffee accessories, and teas. The company owns about 7,100 of its shops, which are located in about 10 countries—though mostly in the U.S.—while licenses and franchises operate more than 5,300 units worldwide. In addition, Starbucks markets it coffee through grocery stores and licenses its brand for other food and beverage products.

Target Market

Starbucks is primarily adult-focused and aims to connect with their customers, communities, and children through various advertising tactics. The huge majority of these customers come from urban areas, where individuals are willing to go the extra mile to purchase costly gourmet coffee.

Marketing Mix

In order to maximize their brand awareness and establish themselves as the most accepted and valued brand in the world and among their target market, Starbucks implemented a well-incorporated marketing curriculum that would employ a marketing mix (product, price, place, promotion, people, process and physical evidence) that would satisfy the needs and wants of its target market (McDaniel, 2008). The seven elements of the marketing mix that Starbucks utilized are as follows:

Product

“The customer base is asking us to be innovative,” says Richard Feinberg, director of the Perdue University Retail Institute, on behalf of Starbucks. “Our organization is really looking to enhance the food side of our business” (Schouten). It would be most beneficial for Starbucks to focus on their in-store items and baked goods. The test locations have already started to focus on this trend, and have given positive feedback and results. The focus product will be the in store made sandwiches. This breakfast option is scheduled to go companywide within the 2007 fiscal year. Multiple choices are available in Washington D.C. and other locations already (Zimmer). These variations include: ham, bacon, sausage, eggs Florentine, turkey with spinach and sun-dried tomatoes. Also, modifications of these made-to-order products will be available (Gray, 2005). The breakfast sandwich is largely based on the company's need to compete with McDonald's fast food restaurant that has recently added “Gourmet Coffee's” to its menu. Although Starbucks coffee sales continue to rise, McDonalds has become a strong competitor in the industry. “Egg McMuffin” is often used as the general term for breakfast sandwiches, and Starbucks is attempting, with their own products, to break that name brand association. These sandwiches are similar to the McMuffin, but with a much wider range of freedom for their customer's palettes. For example, Starbucks will offer a whole-wheat muffin, sourdough muffin, and plain white muffin for the product base. There are multitudes of options for the meat, including: turkey, chicken, ham, sausage and bacon. Also, a mix and match of toppings gives the customers an extended opportunity to personalize their choices. A variety of “house selections” will be created, ...