Starbucks's Marketing Mix for Identifying the Core Components of the Company's Marketing Plan - Case Study Example

Stаrbuсks соffее strаtеgiс mаnаgеmеnt саsе study Institution: Name: Stаrbuсks соffее strаtеgiс mаnаgеmеnt саsе study Introduction Starbucks Coffee Company is the largest and the most successful coffee company globally. The company was established in 1971, and some of its founders are Jerry Baldwin and Gordon Bowker. Initially, it majored in coffee products only but it has expanded and currently caters for other refreshment products. The company has approximately 16,858 cafeterias that operate in 50 nations including 12,700 cafes in Canada, UK and United States (Bussing-Burks, 2009). Marketing concept relies on the premises that companies should consider the consumer wants and needs prior to designing products or services. The marketing mix of Starbucks Coffee Company makes it to have a competitive advantage in the industry. The marketing mix clearly defines the major components of the company's marketing plan. Starbucks Coffee Company utilizes the marketing mix as a way of not only developing its image and brand but also popularity. The company further changes it marketing mix regularly to maintain its competitiveness in the local and global market. Starbucks Coffee Company has closely followed the 4Ps, and grown into the largest coffee restaurant in the world. It strives not only to meet but also to exceed the customers' expectations (Lockyer, 2007). Product In the marketing mix, a product is defined as anything that can satisfy the customers' needs. Nonetheless, examining what consumers are purchasing, it remains a services whether the means is intangible or tangible. The company focuses on innovating its products so to expand its market. Product as a market mix focuses on what firms offer to its customers. Presently, Starbucks Coffee Company offers the following products Coffee, pastries, tea, smoothies, frappuccino beverages and merchandise such as instant coffee and mugs. However, the firm is widely known for one product, quality coffee, which is its main product. Starbucks has redefined its business model so as to provide its customers with the best. In case there is unsatisfied customer, the firm provides another cup of coffee at no cost. The unique trend that the company has adapted is to create a web site that allows customers to request or order for custom drinks, prepare a recipe, and hand it to the Starbuck's barista. Furthermore, the firm has a mobile phone application that its customers can use to order for customized products (Yun-sheng, 2001). In order to built a core product in the coffee industry, Starbucks aims at adapting high standards, providing good services and introducing new products. The company has expanded its product mix to compete favorably. It has focused on introducing new products both in the local and international markets such as VIA flavored coffees. It has also tried to attract tea lovers by introducing unique Tazo tea. The firm has also focused on identifying the specific needs of the its customers by introducing nonfat milk to its consumers. It also have seasonal offerings like cream Frappuccino, and strawberry for summer and gingerbread latte mainly for Christmas season (Yun-sheng, 2001). Lastly, the company offers Starbucks cappuccino and coffee makers for customers who want to own them. To ensure the richness of the brand apart from using the best ingredients, the company involves all of its employees in realizing the mission and objectives of the Starbucks. Recently, the company considered opting out of breakfast sandwich business and focusing on its major product: coffee. However, after weighing options, the management realized that if the firm eliminates breakfast sandwiches, the cost will be reduced. This is because the sandwiches do not have a long shelf life compared to coffee, and they will be discarded after sometime (Lockyer, 2007). Price Prices is defined as the amount customers are required to pay in order to obtain a product or service. The price set for either a product or services has significant impact on the behavior of consumers. If the price is lower than that of the company's competitors, the sale volumes are likely to increase. However, in cases that the price of the product or service is set higher than expected, the sales volume are likely to reduce. In some cases, the consumer are ready to pay for the high prices if the value of the product is high, for example in the case of Starbucks Coffee Company (Bussing-Burks, 2009). Starbucks has attained the best price point for its coffee in all of its established restaurants across the globe. It ensures that the customers enjoys high quality coffee. Some of the company's competitors include McDonald and Dunkin Donuts, and offer their products at lower rates. However. Starbucks has countered the issue of price by introducing cheaper coffee without compromising the quality at $1 for customers who could not afford $3.75 for basic coffee (Bussing-Burks, 2009). Finally, Starbuck Coffee Company applies a premium pricing strategy to obtain a competitive advantage both in the local and global market. The mentioned pricing strategy focuses on the behavioral tendency of the consumers to buy expensive products or services. The mentioned is on the basis that there is a correlation between high value and high price (Lockyer, 2007). Place Place as a component of marketing mix relates to customers in terms of convenience. The consumer is likely to buy a product is a store that is conveniently located so to save on time. Starbucks Company provides most of its products via its cafes. Place as a component of marketing mix is responsible for determining the venues that customers can easily access products or services. Some of the places that the company uses to distribute its products to customers include cafes, Starbucks App, online store and retailers. Initially, the firm sold its products via cafes. However, with the advancement of the internet, it has opened online stores. The marketing mix is a clear indication that the Starbucks adapts not only to the changing times and technologies but also market conditions (Bowie & Buttle, 2004). Furthermore, the company has its restaurants strategically placed. This has enabled it to attain maximum visits on a daily basis. Starbucks has attained this by opening various college campuses in the country via licensing agreements with Noble and Barnes, hence has established about 700 new locations. Moreover, the firm has a well developed mobile application that informs customers of the nearest Starbucks without having to drive or walk through store and location for hours (Lockyer, 2007). Promotion Promotion is defined as an integrated marketing that aim at communicating various marketing strategies to the consumers, for example package coupons, special sales, refunds, and rebates among others. All the mentioned can influence the behavior of consumers. Bowie & Buttle, (2004), points out that it is important to ensure that consumer are aware of product existence. The Starbucks promotes its products and services using various strategies that make it to enjoy a competitive advantage in the market. The firm strives to make its stores the third place that consumer visits. The first and second place being home and work respectively. The stores are unique and relaxing, thus attracting high percentage of customers (Lockyer, 2007). The company mostly uses advertising to promote its products. Promotion as a marketing mix refers to employed communication strategies for disseminating information not only about the firm but also its products. The promotional mix of the company include sales promotion, advertising and public relations (Bowie & Buttle, 2004). Starbucks advertises its products through print media, the internet and television. It also uses public relations as a promotional strategy but less frequently. For instance, the Race Together campaign was criticized widely. Additionally, the firm applies sales promotion strategies like Starbucks cards. The customers can use the cards to obtain freebies in its restaurants. This particular marketing mix of the company is a core significance of not only advertising but also the roles of sales promotion and public relations for Starbucks Coffee Company (Yun-sheng, 2001). Moreover, Starbucks have used technology to promote its brand and build its image. It has build a powerful mobile application that enables its customers to utilize the messaging systems to meet at Starbucks for both social and business interactions. Starbucks idea of using mobile application as a marketing strategy is a brilliant idea. This is because a high percentage of customers have mobile phones. Furthermore, it is cheaper for the company to use the mobile application as a promotion strategy compared to commercials. Moreover, commercials are either so broad or short making consumers not to comprehend the information being relied because of time (Lockyer, 2007). The firm also uses viral marketing such as social networking sites for example facebook and twitter. Through the social media sites, the company updates information and send notices on a daily basis with an aim of stimulating the desire of the consumers to visit the stores. the strategy has been of great success for the company in expanding its customer base (Bowie & Buttle, 2004). Conclusion The marketing mix is responsible for identifying the core components of the company's marketing plan. Starbucks Coffee Company uses the marketing mix not only to develop its brand image but also increase its popularity. Enjoying the strongest brand in the industry, the firm proves how effective marketing mix provides a competitive advantage in domestic and global market. References Bowie, D., & Buttle, F. (2004). Hospitality Marketing: An introduction. Burlington, MA: Bussing-Burks, M. (2009). Starbucks. Santa Barbara, Calif: Greenwood Press. Elsevier Butterworth-Heinemann. Kotler Philip, A. G. (2010). Principles of Marketing. New Jersey: Pearson Education. Lockyer, T. L. (2007). The International Hotel Industry: Sustainable Management. : Haworth Hospitality & Tourism Press. Yun-sheng, W. (2001). Perfection and innovation of 4P Marketing Mix – How to evaluate 4P Marketing Mix. Commercial Research, 5, 6. Read More