Principles of Marketing
What Explains the Starbucks Success Story?
Howard Schultz had the perfect plan to create a successful coffee company. He got people to pay more for a premium coffee then to just go to a local coffee shop and pay a lot less for a cheaper coffee. He did this by creating an experience around purchasing your coffee. Starbucks focused on creating relationships with its customers while providing one of the best premium coffees out there. Also being able to customize your own drink was a big success in getting people to purchase the product. A high quality coffee was one key component to Starbucks value proposition. Another was service and getting to know your customer. Finally, the last key component was atmosphere. They wanted to create an ambience in their stores. When Starbucks started out, their key target market was female clients between the ages of 25 and 44. These female customers were well-educated, white collar patrons. They brought on patterns of purchasing specialty coffees and other drinks. Anything from cappuccino type drinks to frozen coffee drinks. Starbucks needed to provide a broad but unique type of product. During this period Starbucks didn't really have a brand image. They didn't really differentiate themselves from the smaller scale competition. In the customers eye Starbucks wasn't really any different from these other coffee shops except that it was a big brand name. The competition they faced included small scale coffee shops such as Caribou Coffee. They also faced competition on a big coffee distributors such as Maxwell Coffee. So What is the Problem?
Even though Starbucks is the biggest coffee distributor out there they still face problems of declining customer satisfaction. They face the problem of brand image in society. A lot of people think Starbucks is just another big corporate bigwig trying to make more money to pay their...