Case Study - Starbucks

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Abstract

“Starbucks is the leading specialty coffee retailer in the nation, with over 5,000 locations in 22 international markets. Starbucks positions their products on a relatively simple plane. They focus on quality and experience, rather than price. A comparison of specialty drinks with its competitors reveals very minor differences. Starbucks’ image is one of the key elements to their success. The company has realized that people don’t only come for the coffee; they come for the atmosphere. People socialize, read, study, or just enjoy the music while drinking their coffee.” (Kembell, Hawks, Kembell, Perry, & Olsen, 2002)

The Product

The product strategy for Starbucks appears to be to position their coffee as the one people want by providing high end coffee, warm inviting locations and excellent customer service. “But the essence of Starbucks is not about the coffee, although it’s great coffee. It’s about the coffee-drinking and the coffeehouse experience,” says Hayes Roth, vice president of marketing at Landor Associates, a consultancy that has advised Starbucks on branding strategy.” (Karolefski, 2002) Starbucks caters to the busy person who desire premium quality and are willing to pay the additional price that comes with that premium. Customers who frequent Starbucks do so with the view “Great coffee equals great value equals higher price, all part of the consumer experience.” (Janal, 2006) Strategies

Starbuck’s product strategy affects their new product development because they must focus their efforts on finding/developing products that will meet the extremely high standards set by previous experiences. Additionally, they must keep the sensory experiences in mind. “Starbucks has been under pressure to increase store revenue and profits, and, once again, they are turning to sensory branding for the solution. The most startling change is that the firm will go back to grinding coffee in its stores for the sole purpose of improving the coffee...
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