Marketing and Starbucks Essay

1.0 IntroductionThe Starbucks Corporation was founded by three entrepreneurs at the lieu called Seattle in 1971. ab initio they were change of whole bean hot chocolate tree in one Seattle origin and by the year 1982 the clientele had grown enormously and has opened five stores selling the coffee beans, a roasting facility, and a wholesale argumentation for local restaurants. When the Starbucks started its business it was only a little(a) retail coffee shop as like the other coffee shops. The main vision of the Starbucks owners was to educate customers ab by the fine coffees and feel the aroma of the Dark roasted coffee, selling just the coffee was not their push back as the coffee was sold in the USA since 1960s (Starbucks cutting study).Howard Schultz was recruited as the manager of retail and marketing and it was Howard who brought new ideas to the owners, but he was turned down. Schultz in turn opened his own coffee close off was named Il Giornale in 1986 based on It alian coffee cafes, selling brewed Starbucks coffee. By 1987, Schultz had expanded to three coffee bars and bought Starbucks from the original owners for $4 million and changed the name of his coffee bars from Il Giornale to Starbucks.His intention for the lodge was to grow slowly with a very solid foundation. For the first dickens years, Starbucks losses doubled as oerhead and operating expenses increased with Starbucks expansion. Schultz stood his anchor and did not sacrifice long term integrity and treasures for short profit. By 1991, Starbucks sales increased by 84% and the company were out of debt. Starbucks grew to 20 stores by 1988. By 1996 it grew to 870 stores with plans to open 2000 stores by the year 2000.2.0 trade stategyof Starbuks merchandise strategy is carrying out segmentation, objective lensing and positioning. Doing the detailed understanding of the marketplace into strategic decisions and the objective lensing of appropriate customer groups. This targeti ng should emphasise on any differential advantages and meet a suitable positioning within the target segments (Dibb and Simkin, 1996). Starbucks has adopted a Differentiation strategy it is a strategy which seeks to provide merchandise or usefulness that offer benefits and should be different from competitors that are widely determine by customers.The aim this strategy is to achieve advantage by fling better products or services at uniform or higher(prenominal) price. When Starbucks was launched there were many coffee bars in the united States at that epoch but Starbucks valued to stand whimsical from the others.Marketing has virile potential to contribute to the highly important aspects of the organisational private-enterprise(a)ness, namely innovation (Kerin, 1992) and competitive analysis (Varadarajan, 1992) and Schulz wanted to innovate and recreate the experience of the Italian coffee bar culture. Starbucks mainly focused on the strategy of new products, a stronger c onnection with the customers as the Third place and expanding store locations in the United States and abroad. Starbucks has followed the simple STP transition ( breakdown, Targeting and lieu).2.1 SegmentationMarket Segmentation is a process of dividing a market into distinct groups of profaneers with different needs, characteristics, or behaviour that might require separate products or marketing programs is called Market Segmentation (Kotler and Armstrong, 2006). Initially Starbucks was based as a Socio-Economic segmentation base in consumer Markets as it has c formerlyntrated on social class particularly the business class people those who are working at the office and wanted to have a cup of coffee with a considerably gloriole and facilities. Starbucks also had segmented his market by geographic and demographically by selecting the store location where they can find the educated and coffee lovers (Dibb and Simkin, 1996).2.2TargetingAfter a company has defined market segmen ts, it can enter one or many segments of a endown market and should make decision nearly how many and which customer groups to target (Dibb and Simkin, 1996). Target Marketing is a process of evaluating each market segments attractiveness and selecting one or more segments to enter (Kotler and Armstrong, 2006). The concept of target marketing is a analytic implication of the basic philosophy of marketing (Lancaster and Massingham, 1993).A company should target segments in which it can profitably generate the greatest customer value and sustain it overtime. Starbucks wanted to develop a reputable relationship with the customers, around of companies enter in a new market y helping a single segment, and if this proves successful than they add more segments, initially Starbucks did the alike thing targeted the parents with the young children and it was hit concept and it has added more segments by including Teenagers and true its product range also (Kotler and Armstrong, 2006).2. 3 PositioningOnce the company has distinguishable which market segments to enter it should decide what positions it wants to occupy in those segments. Market Positioning is arranging for a product to occupy clear, distinctive, and desirable place comparative to competing products in the minds of target customers. A products position is the place that the product occupies congenator to competitors in consumers minds.Here in this case the Starbucks has developed a unique market position for their products because if a product is to be exactly same like the others on the market than consumers would have no reason to buy it. Starbucks has positioned themselves in the market as a highly reputed brand (Kotler and Armstrong, 2006). In this case Starbucks has planned his positioning in such a instruction that it distinguish their products from competing brands and give them the greatest strategic advantage in their target markets. Starbucks has a descriptively simple statement to inspir e and nurture the serviceman spirit-one person, one cup, and one neighbourhood at a time.Starbucks positioning strategy was customer base so that it can give the outperform service more than what the customers expect. Starbucks has gained a competitive advantage over customer satisfaction and employee satisfaction as Starbucks had developed its positioning strategy based on the customer and provided the utmost facility in foothold of layout, furniture to the music, and in terms of employee satisfaction Starbucks make employee as a partners and gave them a personal security with a freedom to participate in the every decision of the business and make it successful (Porter & Miller, 1985, Porter, 1998).3.0 Developing Marketing MixOne of the major concepts in the modern marketing is once the company has decided its overall marketing strategy than it should plan the elaborate of the marketing mix. Marketing mix is the set of controllable, tactical marketing dickheads (product, price , place, and promotion) that the libertine blends to produce the response it wants in the target market (Kotler and Armstrong, 2006). Starbucks has a make good decisions on marketing mix cats-paws3.1 ProductProduct delegacy the goods and services combination the company offers to the target market. Starbucks has used soft touch name, Quality, Variety and Services as their Product tool which can be concluded by this statement, Starbucks with a good Brand name provides scoop out Quality and with the Variety of Products, it has adopted Quality improvement strategy (Kotler and Keller, 2009). Initially Starbucks started with the coffee than it has included non-fat milk, cold blended beverages. Later on verbalize seasonal offerings such as strawberry and cream Frappuccino, gingerbread latte with whatsoever food items like cookies and pastries. Before launching the products Starbucks was getting the approval of the customers.3.2 expensePrice is the amount of money customers have to give birth to obtain the product. Though the Price of the Starbucks was higher than the other coffee shops, the customers were ready to pay the amount because Starbucks has developed a luxurious image with all the facilities wrong the store. Starbucks as a good Brand have offered more benefits and facilities and the best quality of products to justify their higher prices (Kotler et al, 2006).3.3 Distribution and ServiceStarbucks has a good distribution channels initially it was selling coffee beans and doing wholesale business for local restaurants. In terms of service and location Starbucks opened the stores in a such a way that it can reach to targeted customers and it has also gave more stress on giving the best customer service by spending a lot of money by genteelness its employees (Starbucks case study).3.4 PromotionStarbucks initially did not use the advertising tool for promotion but it was the Public relations and the Personal selling tool that helped the Starbucks to a chieve its target