Marketing Essay Starbucks

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When a customer wants to buy one unit of a good, where he is given a choice of two differentiated good, economic theory suggests that the absolute price matters.

Economic theory suggests that consumers at any given time will select a product based solely on price after an evaluation of utility. In reality however, when marketing and economics theories collide, consumer actions are the converse. It is acknowledged that consumer buying patterns and decision-making are strongly influence by factors such as perception of quality, brand confidence and recognition, as well as the degree of product differentiation. How come the name Starbucks is automatically related to coffee when there is no indication of coffee in neither logo nor name? Why would someone be willing to pay more to be served by a ‘barista’, a glorified coffee server rather than by the aunty at the food court, who is always ready with a smile? What caused this cult-like loyalty for Starbucks? What exactly is the value proposition that Starbucks is offering to consumers? More importantly, how did Starbucks manage to persuade acceptance and eventually created value of their highly “westernized” ideas and lifestyles for a conservative country like Singapore back in the 90s?

Our mission is to inspire and nurture the human spirit; one person, one cup and one neighbourhood at a time - Starbucks

Starbucks’ core competency is high quality coffee supplemented by food and non-food products provided at highly accessible locations. Apart from just tangible offerings, Starbucks prides itself in offering a lifestyle, community and experience for religious coffee connoisseurs.

At the heart of a successful brand is a great product or service backed by creatively designed and executed marketing. - Kotler

Starbucks’ value proposition centres around three interdependent components; coffee, intimacy and atmosphere. Starbucks prides itself in serving only the highest quality of coffee. They can guarantee...
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