Académique Documents
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by
Shengxin Sun
Journalism 7200
University of Missouri - Columbia
STARBUCKS AND ITS MARKETING STRATEGIES 2
Abstract
Starbucks got its beginnings in 1971 with a single caf in Seattles Pike Place
Markets and offered only roasted whole coffee beans. In 1982, it changed directions and
recruited Howard Schultz to lead the marketing and retail efforts. Today, it is one of the
most respected and well-known brands in the world. It makes its presence known with
over 22,000 stores in 67 countries and territories. Its success can be largely contributed to
aims to identify and discuss some of the corporations key marketing tools.
Introduction
The story of Starbucks began in the spring of 1971, when three college friends
decided to open up a caf that offered premium quality roasted whole coffee beans to the
the coffeehouse chain. He had a vision to highlight ones coffee experience by modeling
his coffeehouses after coffee bars in Italy (Starbucks official website). He saw Starbucks
as a company that not only promoted the celebration of coffee and the traditions attached,
Starbucks has asserted itself into American culture as well as majority of other
cultures in the world faster than any retail company in history. It is one of the most
respected brands on earth. According to its website (2015), Starbucks currently has more
than 22,000 stores in 67 countries and territories. It plans to expand its business even
further within the next five years. The companys success is largely attributed to its
appropriate and effective marketing strategies. This paper intends to identify and examine
marketing.
Word-of-Mouth Marketing
Starbucks hardly uses traditional media outlets when it comes to marketing its products
and services. Other quick-service coffee and food chains make substantial annual
launches new stores. The brands positioning is based on affordable luxury with an aim
of providing an atmosphere of a third place (Cobb, 2008). Third place is neither work
nor home, but a place where one can go to study, relax, or visit with friends over a cup of
coffee or tea for a period of time. Every Starbucks retailer is staffed with well-trained
baristas who are not only friendly but also enthusiastic about the products; the lighting is
warm and inviting; furnishings are centered on comfort; and no one can resist the aroma
in the air. As a result, customers are inclined to share their experience with family,
friends, and colleagues. The buzz about Starbucks quickly spread and its popularity grew
as people began to frequent the different locations. Between 1987 and 1992, Starbucks
opened 150 new stores, twenty percent more than the companys original prediction.
Twitter (details of social media marketing will be discussed in a separate section). One of
Nelson. His responsibility is to act as a barista on the Internet to engage with core
customers to uncover reasons for their dissatisfaction with the brand. Starbucks relies on
Nelson to translate the Starbucks experience for the online community (York, 2010, p.
34). This type of interaction suggests that Starbucks is genuinely concerned with and
interested in its customers. The Starbucks brand is further promoted as Twitter users
Product Placement
companies to subtly promote their products through the significant placement of brands
STARBUCKS AND ITS MARKETING STRATEGIES 5
within films or television programs (OGuinn, Allen, Semenik, & Close, 2015, p. 74).
By employing this method, companies are hoping that customers will subconsciously
take note of their products and thereby establish stronger brand equity. There has been
research showing that product placement is most influential with low-involvement goods
and services that require little or no decision-making time from consumers (OGuinn et
al., 2015).
years by its association with major Hollywood films and popular television shows. For
instance, the contestants and the judges of the hit reality show The Voice were seen
holding Starbucks cups with the signature green siren logo whenever they appeared on
camera; Anne Hathaways character was forever running to Starbucks fetching coffee for
her coworkers and her boss in The Devil Wears Prada (20th Century Fox, 2006); and the
main characters from the classic romantic comedy Youve Got Mail (Warner Brothers,
1998) were both habitual Starbucks coffee drinkers. Joe Fox in the movie said: the
whole purpose of places like Starbucks is for people with no decision-making ability
whatsoever to make six decisions just to buy one cup of coffee. Short, tall, light, dark,
caf, decaf, low-fat, non-fat, etc. So people who don't know what the hell they're doing or
who on earth they are can, for only $2.95, get not just a cup of coffee but an absolutely
placement is not limited to the market in the U.S. The entertainment industry has and will
continue to help the Starbucks brand claim its role in popular culture.
In-Store Promotions
STARBUCKS AND ITS MARKETING STRATEGIES 6
Starbucks has always maintained that the customers are the priority. To better
serve the customers, the company has focused on training and retraining employees.
Inside a Starbucks store, the employees are the best advocators from the companys
perspective. Each employee goes through an extensive training process paired with
ongoing evaluations and is encouraged to create a special relationship with each customer
(Talpau & Boscor, 2011). As the two-way relationship develops, customers gain trust in
indoors. Customers can easily browse through the items for sale as they stand in line
positive social image. Combining wide array of the accessories and its social status, the
Starbucks offers free Wi-Fi in all of its locations. It is hoped that customers will
desire to spend more time at a Starbucks store through the free access to the Internet as
well as enjoy other perks of the Starbucks Digital Network. Starbucks partnered with
Yahoo to create the Starbucks Digital Network, a free news and entertainment web portal
to various premium publications such as The Wall Street Journal and The New York
Times; it also offers in-store customers exclusive iTunes downloads (Marketine, 2015).
To further improve the in-store experience, Starbucks worked with Google to provide the
next generation Google Wi-Fi to its customers. In the summer of 2014, Starbucks saw an
18 times increase in download speeds and a six times increase in uploads speeds
(Marketline, 2015).
In todays digital age, the way in which people exchange information has been
collection of online services that supports social interactions among users and allows
them to co-create, find, share, and evaluate the online information repository (p. 239).
Many companies and organizations have shifted their advertising focus from traditional
media channels towards various social media platforms such as Facebook, Twitter,
Instagram, Pinterest, Tumblr and etc. Starbucks has been successfully executing its
Starbucks Facebook page currently has well over 36 million likes. The company
posts to the page to spread knowledge about its products and services and disseminate its
organizational culture. After the company promoted its Frappuccino Happy Hour event
through Facebook, it reported its stores selling one Frappuccino every fifteen seconds on
average (Warren, 2011). On free pastry day in 2009, consumers were informed that
they could download a voucher for free pastry from the Starbucks Facebook page. Chris
Bruzzo, Vice President of content and online, said he was amazed at the number of
people standing in line holding coupons they had printed out; he considered the outcome
Facebook page also surveys customers to help the company better understand customers
garner knowledge about public opinions and feedback regarding the brand.
Starbucks utilizes tweets to promote its latest products, campaigns and events to
more than ten million of its followers on Twitter. It uses Twitter as an apparatus that
helps the brand acquire relevant information from its external public related to customer
STARBUCKS AND ITS MARKETING STRATEGIES 8
expectations, likes and dislikes about the company via tweets (Chua & Banerjee, 2013).
example is my visit to the local Starbucks drive-thru about six weeks ago. I waited in
line for approximately fifteen minutes. When it was finally my turn to pull up to the pick-
up window, I was told that the store was out of soymilk for my order. It was suggested to
me to replace the soymilk with coconut milk. I left latte-less and dissatisfied. I then wrote
encountered. Within minutes, I received a response from the Starbucks team apologizing
for what had transpired and provided me a link to talk to a team member to further
discuss ways that they could improve. The companys reaction to my tweet made me feel
valued as a customer. Twitter is also effective in helping the company to quickly put
rumors to rest and manage any misunderstandings among consumers. Ultimately, Twitter
helps to promote the Starbucks brand in a positive manner by engaging in instant two-
Starbucks Instagram account has over 6.6 million followers still climbing.
According to Nitrogram, an analytics firm that provides statistics on how brands compare
on social apps, Starbucks ranked number two among 150 brands in terms of followers
and posts (OConner, 2014). The company understands the fundamentals behind
Instagram and the artsy aesthetic favored by the users. It succeeds at finding and re-
sharing photos posted by the fans, thus earning the company goodwill (OConner, 2014).
The photos align with the image created for the brand. The pictures function not only as
advertisements for the companys products, but also as a representation of the lifestyle
associated with Starbucks products and services. Additionally, the company also gives
STARBUCKS AND ITS MARKETING STRATEGIES 9
the followers a behind-the-scenes look at what it does, ranging from the harvest of coffee
beans in Panama to the grinding of coffee beans at 6 a.m. in a local Starbucks store. In so
doing Starbucks is able to enhance consumers satisfaction and better connect with them.
consumers could voice frustrations, ask questions, post suggestions, and propose new
ideas. User ideas were categorized into product ideas, experience ideas, and involvement
ideas. Within the first two months of the launch, more than 41,000 ideas were contributed
by the public (York, 2010). Visitors were able to see the number of ideas that had been
submitted, considered, and implemented. The website promoted the concept of design
with customers (Sigala, 2012). Consumer ideas were revealed and evaluated publicly by
other customers; corporate executives would then review the most popular ideas. Ideas
that had been implemented in the past included the introduction of the Starbucks Card
eGifts system and the coconut-flavored blended beverages (Chua & Banerjee, 2013).
MyStarbucksIdea.com gives the consumers the impression that the brand cares greatly
about the customers and their idea contributions, thereby fostering brand loyalty. The site
Wireless/Mobile Marketing
The introduction of smart phones has further emphasized the role of technology in
peoples lives. Starbucks introduced its app for iPhones in 2011. The mobile application
allows customers to access their Starbucks card features, use the mobile payment
capability, and track their rewards (Marketline, 2015). The app also allows users to send
STARBUCKS AND ITS MARKETING STRATEGIES 10
mobile-to-mobile gifts. The company then introduced its app for Android phones,
offering consumers the fastest way to pay as well as manage ones Starbucks card on the
go.
In December 2014, Starbucks launched the Mobile Order and Pay program in
Portland, Oregon. The program lets customers place orders ahead of time and pick them
up at their desired Starbucks locations. Starbucks made the program even more attractive
to consumers by integrating the mobile ordering experience into its mobile app and its
rewards loyalty program (Marketline, 2015). After achieving success in all of the test
markets, the program now operates nationwide. Starbucks use of technology adds new
opportunities for the company to generate revenue, not only promoting itself to an
expanding customer base but also offering both employees and customers a more
Conclusion
Since 1971, Starbucks has become one of the largest, most well-known, and most
respected corporations in the world. The companys efforts to stay away from traditional
media channels as a way of advertising were a big part of its success in the early years.
The brands continued presence in popular culture serves as a constant reminder of the
Starbucks intended brand image. In-store promotional efforts are important in making
direct sales as well as establishing special bonds with customers. Social media platforms
encourage engagement from users to better promote products and events, translate the
Starbucks lifestyle to the public, and set up for instant two-way communication between
the brand and its customers. Starbucks innovative use of technology with its mobile
marketing allows the brand to achieve new heights in expanding customer base and
STARBUCKS AND ITS MARKETING STRATEGIES 11
generating revenue. Finally, the Starbucks marketing strategies are best represented in the
words of CEO Howard Schulz, we are in the people business serving coffee, not the
References
Cobb, C. (2008, June). Wake up and smell the publicity: A look at Starbucks brand
revitalization. Tactics, 18, 26.
Ephron, N. (Director). (1998). Youve got mail. United States: Warner Brothers.
Frankel, D. (Director). (2006). The devil wears Prada. United States: Twentieth Century
Fox Film Corporation.
OConner, C. (2014, February 13). Starbucks and Nike are winning on Instagram (and
your photos are helping). Retrieved from
http://www.forbes.com/sites/clareoconnor/2014/02/13/starbucks-and-nike-are-
winning-instagram-and-your-photos-are-helping/
OGuinn, T. C., Allen, C. T., Semenik, R. J., & Scheinbaum, A. C. (2015). Advertising &
integrated brand promotion. 7th edition. Stamford, CT: Cengage Learning.
Warren, K. (2011, August 2). Starbucks social media strategy. Business Review, 34-43.
York, E. B. (2010). Starbucks gets its business brewing again with social media.
Advertising Age, 81(8), 34.