Consumer Behavior of Starbucks

Topics: Coffee, Starbucks, Coffeehouse Pages: 8 (2824 words) Published: April 3, 2007
Draft #1

Section I


In 1971, three friends with a passion for coffee opened a gourmet shop – Starbucks was born. The coffee shop's name comes from Herman Melville's 19th century novel about the whaling industry, Moby Dick. The seafaring name seemed appropriate for the small shop, which imports the finest coffee. The cold weather and thirsty Seattle community seemed to be a perfect match for this endeavor. Starbucks caught on and, in less than a decade, became Washington's largest coffee roaster. In 1982, Starbucks coffee changed forever. While traveling in Milan, Italy, head of marketing Howard Schultz was intrigued by the coffee shop atmosphere – patrons sitting, relaxing and chatting over café latte. Wanting to incorporate what he had experienced into Starbucks, Schultz brought the idea home. Starbucks owners balked at the change, so Schultz opened his own coffee shop, IL Giornale – nearly an overnight success. In 1987, Schultz purchased Starbucks for $3.8 million. Today, Starbucks has approximately 12,440 locations, consisting of 8,836 stores in the U.S. and 3,604 internationally located in 37 different countries. The future of the corporation looks bright for the 2007 fiscal year; Starbucks plans to add 2,400 new stores in calendar year 2007 this is based on a global basis. The company goal of 30,000 stores has been modified to 40,000 stores worldwide. The plan is to have half the stores in the U.S and the other half internationally. With record net earning of $564 million for fiscal 2006 is this an obtainable goal?

Customers When you charge top price, customer satisfaction is key to maintaining success. Starbucks customer base is very loyal, even to the point of obsession. Originally, Starbucks targeted young professionals, at some point this changed. Keeping the right marketing mix to satisfy their diversifying customer base will be vital for the company's long term success. What drives a customer that makes $7.00 an hour to spend $3.00 on a cup of coffee and not have post purchase dissonance? Is a trip to Starbucks a status symbol for patrons; is the experience that stimulating for customers - does it make them feel better about themselves? Most people I surveyed said the Starbucks experience is worth the three dollars a day – for the atmosphere and a great cup of coffee. I was told you don't have make big money to stand in line and order the best cup of coffee made. On the international level, adding to your customer base can be difficult. Many people in foreign countries do not have disposable income. Less affluent countries have smaller markets, so target marketing is a valuable tool. Usually, major cities provide customers that value, high quality product and service. One country that could prove difficult to access is, China. Consumers in China are very loyal to traditions and tea has played a part in their country's traditions for centuries. New markets sometime require new marketing concepts. Stockholders and marketing companies will be watching this closely.

The infrastructure they have built gives Starbucks their competitive market edge. Living by their mission statement, the highest standards always apply. Treating employees and customers with respect, embracing diversity and honoring these standards on a daily basis is part of the culture at Starbucks. No other coffee house comes close to the number of stores or customer base served every day by Starbucks. Making Starbucks an experience – a place to relax and enjoy leisure time, - becoming part of the community makes them stand out among the rest. It's a package deal - cup, lid and the protective wrap - a symbol of the best. With complete customer satisfaction, Starbucks sets the bar high for its competitors. All companies have competition, even the king,...
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